Tax Brief: Form 990, What You Need to Know About Schedule G
The IRS Form 990’s Schedule G provides information about a not-for-profit organization’s fundraising activities and events, including benefit dinners and auctions. The schedule also covers gaming activities conducted by the organization, such as bingo, casino nights, or video poker. This article will explore the relevant reporting requirements for each section of Schedule G and the related information that must be tracked in order to be reported.
Part I – Fundraising Activities
Did your organization pay an outside professional fundraising service to help raise funds during the fiscal year? If so, there’s a good chance Part I of Schedule G must be completed. The requirement to complete Part I is triggered if the organization 1) is required to file Form 990 (990-EZ filers are not required to complete Part I) and 2) has reported a total of more than $15,000 of expenses for the outside fundraising services. If both conditions are met, the organization must provide additional information, including the types of activities the organization engaged in to solicit funds (i.e. phone solicitations, mail solicitations, special events, etc.) and information about the outside professional fundraising service provider(s).
Part II – Fundraising Events
The Fundraising Events portion of Schedule G (Part II) is the section that most broadly applies to not-for-profit organizations. Part II is required to be completed if the organization reports more than $15,000 of gross receipts from fundraising events during the fiscal year, regardless of whether the organization is a 990 or 990-EZ filer. Each fundraising event with more than $5,000 of gross receipts during the fiscal year should be tracked separately. The organization must track and report for each event the gross receipts and the amount of contributions/donations included in the gross receipts amount for the fiscal year. Additionally, expense information for each event must be reported, including amounts for cash prizes, non-cash prizes, rent/facility costs, food and beverages, entertainment, and any other direct event expenses. When more than three fundraising events occur during the fiscal year, only the two events with the largest gross receipts are reported individually in Part II. All other remaining fundraising events are aggregated and reported as “Other Events”.
Part III – Gaming
Part III is required to be completed if the organization reports more than $15,000 of gross income from gaming activities. Each type of gaming activity should be tracked and reported separately in Part III. Additionally, expense information for each gaming type must be reported, including cash prizes, non-cash prizes, rent/facility costs, and any other direct expenses. In many cases, gaming is regulated by state and local authorities in the jurisdiction in which the activity occurs. Additionally, gaming that is carried on for profit may be considered an unrelated trade or business activity and trigger unrelated business taxable income. Not-for-profit organizations are strongly advised to research state and local laws and consult a tax advisor before engaging in any type of gaming activity.
The purpose of this article is to summarize the major components and reporting requirements of Schedule G and is not intended to be all encompassing or serve as replacement for the Form’s instructions.
This article is meant to be a resource and provide tools to assist your organization. Please consult your tax advisor regarding your specific tax situation.