When determining alignment, there are 3 sections of a 990 you’ll want to pay special attention to:

1. Basic Information (Part I-III)

• Mission and Purpose:
  Found in Part I, this will give you the foundation’s basic information such as name, address, and EIN. It will also give you the foundation’s mission statement. For example, “We exist to serve disadvantaged families’ reach their full potential through education and empowerment”. Mission statements can often be broad, so it’s important to delve deeper.
• Revenue & Expenses:
  This will tell you how much money came into the organization and also what money went out. This is important because it will help you determine the financial health of the foundation and their capacity for giving.

2. Governance and Management (Part VII)

• Board of Directors & Key Employees:
  This section will tell you the names and contact information for the Board of Directors, the Executive Director, and other key employees. If you’re new to this foundation, this is a great way to know who to contact to start building a relationship with the organization.

3. Grants and Contributions Paid (XIV)

This section will list grants that the foundation has given out that year. You will see the name, address, purpose the funds were given, and award amount. This is probably the most important section because it allows you to see if nonprofits like yours are being funded and if they are being funded in your geographic area. You will also note what a typical grant size is, which will help you determine an appropriate request amount when the time comes to submit your grant proposal.

Turning 990 Data Into Strategic Funding Opportunities

Now that you have collected this data from a 990, how do you effectively use it to determine alignment and increase your chances of being funded? A great place to start is by identifying patterns in the foundation’s grantmaking. Look for trends such as recurring grants to the same organizations or consistent funding of specific program types, as this can help gauge their commitment to certain causes. Next, evaluate compatibility by asking critical questions: Does the foundation’s mission align with yours? Are they funding organizations of similar size? Do their grant amounts match your funding needs? Once you identify a promising foundation, prepare for outreach by tailoring your pitch to reflect their priorities. It can be helpful to reference past grants they’ve made to similar organizations or programs to demonstrate alignment and build credibility.

To maximize your research, keep a database of potential funders, noting their priorities, average grant sizes, and application deadlines. Leverage your network by reaching out to mutual connections if you recognize familiar names on the board. Even if the foundation doesn’t accept unsolicited proposals, focus on building relationships with their staff or board members, as this can open doors for future funding opportunities.

Another way to find potential donors is to study the 990’s of other nonprofit organizations like yours. If you are a nonprofit doing work in the animal welfare space, see who is funding other organizations doing similar work. You can also use this as a way to identify gaps in your community. What services does your organization offer that others don’t, and how would a grant from these foundations bolster animal welfare efforts in your area?

Conclusion

Reading a 990 can feel overwhelming at first, but with practice, it becomes a valuable skill for any nonprofit organization. By focusing on the right sections, you can identify foundations that align with your mission and make informed decisions about where to direct your fundraising efforts!