How to Use Form 990 to Strengthen Donor Trust and Funding Opportunities

For many nonprofit leaders, Form 990 is just one more box to check during tax season. But for experienced fundraisers and development professionals, it’s much more than that. It’s a powerful tool that communicates your mission, financial integrity, and operational transparency—not just to the IRS, but to grantmakers, donors, watchdogs, and the general public.



At Presti & Naegele, we work with nonprofit organizations across the country to ensure their Form 990 preparation and filing not only meets IRS standards, but also reinforces the trust and confidence that funders expect. This guide explores how your organization can turn Form 990 into a strategic asset to build donor trust and unlock new funding opportunities.

Why Donors Are Paying Attention to Form 990

For many nonprofits, the assumption is that Form 990 is for the IRS and accountants. But a growing number of donors—especially major donors, grantmaking foundations, and institutional funders—are reviewing these filings as part of their due diligence process.

Why? Because Form 990 answers key questions:

• Is the organization well-managed?
• Is donor money being spent effectively?
• Are the programs making a measurable impact?
• Are compensation and overhead levels reasonable?
• Are governance practices in place and transparent?

In an age where trust is everything, a clean and strategic Form 990 offers reassurance. It shows you have your house in order.

At Presti & Naegele, we understand how to prepare Form 990 filings that check both the compliance and credibility boxes.

Key Form 990 Sections That Influence Donor Confidence

Not every donor will read your Form 990 line by line—but many institutional funders will. Even individual donors are becoming more sophisticated. These are the areas they tend to focus on:

Part I – Summary and Mission Statement

Your mission should be stated clearly and concisely. A vague or outdated mission statement sends the wrong signal. This section also offers a snapshot of revenue, expenses, and program service accomplishments.

Part III – Program Service Accomplishments

This is where your work shines. Instead of general descriptions, this is your chance to demonstrate impact—how many people you served, what changed, what outcomes were achieved. Clear, outcome-oriented language here builds credibility.

Part VI – Governance, Management, and Disclosure

This section covers conflict of interest policies, board oversight, and financial controls. Donors want to know you’re responsibly managed. Leaving this incomplete—or answering “No” to key policy questions—can raise concerns.

Part VII – Compensation of Key Staff

This section lists the salaries of leadership and key employees. Donors don’t necessarily expect nonprofit leaders to work for free—but they do want transparency and proportionality.

Schedule A – Public Support Test

This schedule helps determine if you qualify as a public charity. Donors look to this to assess whether you're truly community-funded or reliant on a few large contributors.

A filing prepared by Presti & Naegele ensures all sections are clear, consistent, and aligned with how your nonprofit wants to be seen by the public and your supporters.

How to Improve Your Form 990 for Fundraising Purposes

If you treat Form 990 as a communication tool—rather than just a tax form—it can reinforce the story you’re telling in donor conversations, annual reports, and grant applications.

Here’s how to use Form 990 to your fundraising advantage:

1. Write Better Program Descriptions

Avoid jargon and generic statements. Focus on accomplishments, numbers served, outcomes achieved, and real impact. For example, instead of “We provide after-school programs,” write “We provided 2,400 hours of after-school academic tutoring to 180 students, resulting in a 30% increase in reading proficiency scores.”

2. Make Compensation Justifiable and Transparent

Explain leadership salaries in a context that shows value. If salaries seem high, but your organization is complex or large in scale, provide that context in narrative fields or supporting documentation.

3. Keep Governance Information Clear and Up to Date

Ensure policies such as conflict of interest, whistleblower, and document retention are adopted—and reflected in the filing. This reassures funders that your organization follows best practices.

4. Be Consistent Year Over Year

Inconsistencies between years—sudden jumps in expenses, gaps in programs, or erratic governance reporting—raise red flags. If there are major changes, offer a clear explanation.

5. Tie Your Numbers to Your Narrative

If your program description claims major accomplishments, your expenses should reflect it. The budget and the story should reinforce each other.

At Presti & Naegele, we guide clients in framing these sections strategically, ensuring that the language used reflects both impact and transparency.

Using Form 990 in Grant Applications and Donor Relations

Form 990 can either support or stall your funding efforts. Many grant applications require submission of your most recent Form 990—and the strength of that filing can influence a grant reviewer’s confidence in your organization.

Here’s how Form 990 supports fundraising:

• Grants: Funders often evaluate your 990 to assess your organizational health and program scope.
• Major Gifts: Donor-advised fund sponsors and philanthropic advisors often research your 990 before making a recommendation.
• Corporate Support: Companies may review your governance and spending before offering sponsorships or partnerships.
• Foundation Matching: Foundations that match gifts often check Form 990 to confirm your status and legitimacy.
• Annual Giving Campaigns: Including references to your transparent financials and linking to your 990 can boost donor confidence.

To make this possible, your 990 must be polished and accurate. That’s where Presti & Naegele comes in. We prepare forms that funders can rely on—and that nonprofits are proud to share.

Common Mistakes That Undermine Donor Trust

Even small mistakes on Form 990 can undermine your credibility. Here are the most common issues that erode donor trust:

1. Vague or Incomplete Program Descriptions

Donors want to know what you did and why it mattered. Too many nonprofits submit brief or outdated descriptions that fail to show impact.

2. Unjustified Executive Compensation

If compensation is reported but not explained in context, it may appear excessive—even if it’s justified. Form 990 allows space to provide that context.

3. Missing Required Schedules

Schedules like Schedule B (donor disclosure), Schedule A (public support), and Schedule G (fundraising) are often overlooked or filed incorrectly.

4. No Governance Policies

Answering “No” to questions about written policies—like conflict of interest or document retention—can suggest weak internal controls.

5. Inconsistent Financial Reporting

If expenses don’t align with your mission or vary dramatically from previous years, funders may start asking questions.

With professional Form 990 preparation and filing by Presti & Naegele, these errors are caught and corrected before they become public.

Long-Term Benefits of Getting It Right Every Year

Improving your Form 990 doesn’t just benefit this year’s fundraising—it strengthens your foundation for the long term. A clear, well-prepared filing makes every aspect of donor engagement smoother.

Benefits include:

• Increased eligibility for competitive grants
• Higher donor retention due to perceived transparency
• Stronger public ratings (e.g., GuideStar, Charity Navigator)
• Board confidence through accurate reporting
• Greater ease in producing donor reports and appeals

Each year you file a clean, strategic Form 990, you reinforce the trust of your supporters and build new opportunities for growth. Partnering with Presti & Naegele ensures your organization is filing at the highest level—accurately, consistently, and with confidence.

Conclusion: Let Form 990 Work for Your Fundraising Goals

Form 990 has always been a compliance requirement—but now more than ever, it’s also a tool for visibility, legitimacy, and fundraising success.

When filed with care, it communicates accountability, impact, and sound management. When treated like a formality, it can cast doubt and raise questions.

Don’t let your Form 990 be a missed opportunity. With over 40 years of experience supporting mission-driven organizations, Presti & Naegele helps nonprofits file smarter—producing Form 990s that support your funding strategy and reinforce donor trust.

Ready to take your Form 990 from a requirement to a strategic advantage?
Contact Presti & Naegele today to learn how we can help.