American Red Cross Introduction
The American Red Cross was founded by Clara Barton and a circle of acquaintances on May 21, 1881 in Washington, D.C. Barton was over the American Red Cross for 23 year, in which during that time the organization was in charge of its first overseas disaster relief and domestic efforts. In 1900 the Red Cross received its first congressional charter and received their second one in 1905, which was the year that Clara Barton resigned from the organization. ” This charter –which remains in effect today-set forth the purpose of the organization that include giving relief to and serving as a medium of communication between members of the American armed forces and their families and providing national and international disaster relief and mitigation”(Our History).
Just before the World War, the organization made known their water safety, public health nursing programs, and first aid. Because of the outbreak of the war the Red Cross experienced a tremendous growth. In 1914 there were only 107 chapters the number of chapter grew to 3,864 by 1918 and membership excelled to over 20 million adults and 11 million junior members. Many cities and states contributed over $400 million dollar and materials to help the organization, including civilian refugees, allied forces, and those for Americans. Ambulance companies and hospital were staffed by the Red Cross, along with the organization recruiting 20,000 registered nurses to serve the military (Our History).
The Red Cross is an independent, cost-reimbursement, financially supported by voluntary public contributions, and a volunteer-led organization. The volunteer board consists of 50 governors that lead the organization. The honorary chairman is the president of the United States, which appoints eight governors, including the board chairman. The board will elect a president of the American Red Cross from a group of candidates that is nominated by the chairman. Whoever is elected will be responsible for making sure the policies and programs of the board are carried into effect (Our History).
The Coverage of the General Focus and Intended Users of Form 990
The Form 990, entitled “Return of Organization Exempt From Income Tax,” is a report that must be filed each year with the Internal Revenue Service (IRS) by most organizations exempt from federal income tax under section 501 of the Internal Revenue Code of 1986, as amended, whose annual receipts are normally more than $25,000 a year. Charitable organizations, those exempt from taxation under section 501(c)(3) of the Code, that are required to file the Form 990 itself, must also file Schedule A to Form 990. (FAQs). Today the Form 990, in addition to being the main IRS reporting form for nonprofits, is the basic component of the annual report that must be filed with a large number of state offices that regulate charitable solicitation.
The Form 990 is a six page form (and Schedule A is another six pages) which elicits a great deal of regulatory and financial information about the reporting organization, asks a number of questions that can be answered “yes” or “no,” and elicits some descriptive information as well as the names and addresses of the organization’s directors and key employees. In addition to completing the form, the filer must append a number of schedules and attachments.
The Form 990 serves two essential purposes. First, it provides information that helps government agencies (the IRS and state charity regulators) enforce the laws that govern nonprofits. Second, the Form 990 provides a great deal of financial information about the filing organization’s financial condition, about its financial strength or weakness and about such things as the sources of its income.
An organization’s 990 forms for the past three years must be shown to anyone who wants to see them. In addition, copies of these forms must be given to anyone who requests them either in person or in writing and who pays a fee of $1 for the first page and 15 cents for every page thereafter and postage, if applicable.
Comparison of a 990 and a CCR
IRS Form 990 is an informational tax form that most tax-exempt organizations must file annually. In a nutshell, the form gives the IRS an overview of the organization’s activities, governance and detailed financial information. Form 990 also includes a section for the organization to outline its accomplishments in the previous year to justify maintaining its tax-exempt status. In collecting this information, the IRS wants to ensure that organizations continue to qualify for tax exemption after the status is granted.
The population of potential Form 990 readers includes:
Prospective donors and their legal and financial advisors. There is a high probability that the largest donors will view the Form 990. Some foundations have employees specially trained to analyze the data in Form 990 as it relates to the foundation’s donor specifications.
Members of the general public who are interested in the programs and accomplishments of an organization, or the efficiency with which it operates. In addition, individuals may want to be “in the know” to some of the private information on the return, such as compensation. This can include people who want to know the salary of their neighbor who runs an organization, volunteers or even concerned citizens who want to learn more about what the organization does. The possibilities for scrutiny within the general public are limitless. Therefore, it is important to recognize that it is not possible to identify every potential Form 990 reader.
Members of the news media. This group has great potential to affect an organization via news reports. We have seen the media provide significant positive coverage of many worthy causes. Unfortunately, many times we have seen the media highlight a perceived impropriety within an organization. It is important to stress the word “perceived” in this context. The perception portrayed in a media account may not match the reality. (Form 990)
The Association of Government Accountants (AGA) believes that these reports will make governments more accountable to their citizens, and will help Americans become better educated and better able to participate in government activities. The AGA’s guidelines for content and design of citizen-centric reports are very specific. They call for the first page to present the mission of the jurisdiction and demographic information. Page two should provide performance measures on key mission or service areas, and citizens should be consulted in deciding what service areas should be reported on. Page three is to present the costs of services and the sources of revenue to pay those costs, and page four should present the major challenges for the jurisdiction going forward (Funkhouser). An AGA Citizen-Centric Report aims to summarize and organize the government financial data in an easy-to-understand, nonpartisan document, thus ultimately bringing this information directly to the public.
AGA. (n.d.). Retrieved April 26, 2015, from http://www.agacgfm.org/citizen/
FAQs: Form 990. (n.d.). Retrieved May 1, 2015, from http://www.guidestar.org/rxg/help/faqs/form-990/index.aspx
Form 990 – Identifying Your Target Audience. (n.d.). Retrieved May 1, 2015, from http://www.plantemoran.com/perspectives/articles/2012/Pages/form-990-identifying-your-target-audience.aspx
Funkhouser, M. (2013, February 25). Giving Citizens Numbers They Can Understand. Retrieved April 30, 2015, from http://www.governing.com/gov-institute/col-citizen-centric-financial-reporting-accountability-transparency.html
Our History | American Red Cross History. (n.d.). Retrieved April 25, 2015, from http://www.redcross.org/about-us/history
Swords, P. (n.d.). How to Read the IRS Form 990 & Find Out What it Means. Retrieved April 30, 2015, from http://www.npccny.org/Form_990/990.htm