How do you read Form 990 for a grant review?

Read a nonprofit’s Form 990 by confirming the organization and tax year, checking the relevant financial and governance disclosures, and recording the source of each finding. Use the filing to identify questions for review. It is not an independent audit, a current financial dashboard or proof that a particular grant was used correctly.

By Sopact Academy · Reviewed September 12, 2026. This lesson combines cited public guidance with practical workflow recommendations. Figures and teaching scenarios are illustrative unless explicitly identified as a published case.

First distinguish the filing from the audit

Form 990 and Form 990-PF are different returns. Do not apply a Form 990 checklist to a private foundation’s return without checking the appropriate form and instructions. The IRS describes Form 990-PF as reporting private-foundation activities and charitable distributions, as well as calculating tax based on investment income.

An audit report accompanies financial statements and expresses the auditor’s opinion within its stated scope. A management letter, where available, is a separate communication. Neither is interchangeable with a tax return. If your question concerns an auditor’s finding, read the relevant audit material rather than asking an assistant to infer it from a filing.

1. Confirm identity, year and completeness

Match the legal name and EIN to the organization you intend to review. Check the tax period, whether the return is amended and whether the supplied schedules are complete. Keep the filing separate from a draft supplied during preparation.

The IRS Tax Exempt Organization Search provides access to exemption information, returns and other records. Record which dataset you checked and when. A tax return in a folder and a current status check answer different questions.

If you cannot find a filing, do not immediately label the organization noncompliant. Check identity, the applicable filing requirement and the period first. Some organizations use different forms or have exceptions; consult the IRS instructions and obtain qualified advice where the requirement is unclear.

2. Read the relevant sections with their explanations

For the 2025 Form 990, a useful starting route is Part III for program accomplishments, Part VI for governance, Part VII for compensation, Parts VIII–X for revenue, expenses and balance-sheet information, and Part XII for financial-statement reporting. Read the linked schedules and explanations with the answers.

Part XII asks about the accounting method and whether financial statements were compiled, reviewed or audited. A checked box is not the auditor’s report. Request the document when its contents matter to your decision.

Use the instructions for the year being reviewed. Section labels and requirements should be checked against that version, especially when comparing older filings.

3. Separate a reported fact from a conclusion

“The filing reports $900,000 of total expenses” is a source statement. “The organization used our grant correctly” is a conclusion requiring different evidence. Keeping those statements separate prevents a tidy summary from becoming an unsupported assurance.

For each entry, save the document name, period, section or page, value, units and reviewer note. Check extracted figures against the actual page, particularly scanned tables, negative values and columns for different years.

A blank field, an unreadable scan and an explicit zero are different. Record which condition you found. An AI extraction that cannot read the source should leave the result unresolved.

4. Work through a fictional review

Suppose a fictional organization supplies a return reporting total expenses of $900,000, with $720,000 assigned to program services. Your grant was $50,000. The packet includes no grant-specific expenditure schedule and no auditor’s report.

The reported program-service share is $720,000 ÷ $900,000 = 80%. That calculation describes these reported expense categories. It does not measure program impact or show how the $50,000 grant was spent.

The appropriate output is a review with two supported figures and two unresolved questions. It is not a red judgment about the organization, nor a green compliance certificate.

5. Make follow-up proportionate

Name the question that remains unresolved and request the smallest useful piece of evidence. If a grant expenditure schedule answers it, do not ask for an entire accounting archive without a reason.

Route financial or tax interpretations to the appropriate qualified person. Keep the reviewer’s decision, rationale and date with the source. A resolved question may reveal a concern rather than clear one; the objective is an accurate record, not moving every status to green.

Use statuses such as “source verified,” “clarification requested” and “reviewer decision recorded.” If your team uses colors, define their meaning in words. Missing evidence and confirmed noncompliance must not share an unexplained red label.

6. Use AI to prepare the evidence sheet

In a configured Sopact workflow, associate each document with the relevant organization, period and grant where applicable. Specify which authorized sources the assistant should read. A persistent organization record helps preserve context, but the filing still needs its own document type and date.

Use this instruction after replacing the bracketed fields and supplying the actual records:

Check the output against the source before relying on it. Do not assume a generated citation points to the correct year, column or organization merely because it looks precise.

7. Keep the history and access appropriate

Use the related lesson’s comparison checks when looking across years. An amended filing, changed accounting method or different organizational scope can affect the comparison. Preserve the earlier version and explain the change.

A public filing may sit beside confidential financial records or correspondence in the same review. Set access for the combined report accordingly. Do not automatically publish the whole evidence packet because one source is public.

For the review summary, state what was examined, what remains unresolved and who owns the next decision. Keep the relevant evidence available to authorized reviewers without requiring them to reconstruct the analysis from scattered files.

The video explains the broader reporting workflow; it is not tax-filing or audit training.

Practice: catch an unsupported conclusion

Give a colleague the fictional figures above and this sentence: “The organization spends 80% on programs, so our grant is compliant.” Ask them to separate the calculation from the unsupported conclusion and name the additional evidence they would need.

Then supply a newer return with a different reporting period. Check whether the reviewer notices before calculating a year-over-year change.

Pass condition: each finding has a source and period, calculations are reproducible, and missing evidence remains visible. No one has inferred an audit opinion or a grant-use conclusion from the filing alone.

Frequently asked questions

Is Form 990 an audit?

No. It is a tax information return. Read the auditor’s report and accompanying financial statements when you need the auditor’s opinion and its scope.

Are Form 990 and Form 990-PF interchangeable?

No. They are different returns. Identify the organization and form before applying a review checklist, and use the instructions for the relevant year.

Does a program-expense percentage show impact?

No. It describes an expense allocation based on the reported figures. It does not establish program outcomes or how a particular grant was used.

What should happen when an audit report is missing?

Record that it is absent from the supplied packet. Confirm whether it exists and is needed for the review; do not invent an auditor’s finding or infer wrongdoing.

Can AI read a filing for a grant review?

AI can help extract and organize information from authorized sources in a configured workflow. Verify the document type, year, figures and citations, and leave financial or legal conclusions to qualified reviewers.

Should the review be shared publicly?

Not automatically. A summary may combine a public filing with confidential supporting records. Apply access appropriate to the combined information.

Continue with the grant record

Bring the verified findings and unresolved questions into the linked lesson on asking questions across the grant round. Keep the difference between a reported fact and a reviewer’s decision visible as the evidence grows.

For presenting findings clearly, use the impact report writing ebook and example reports. Return to the course overview for the complete sequence.