How to Vet a Charity Using Its IRS Form 990 — Salaries, Program Spend, Red Flags

Before you donate, you can read a charity's own tax return free — and see exactly where the money goes, who gets paid, and what they'd rather you skip.

You get the email with the sad photo, the progress bar, the "only $40 left to go." Your thumb hovers over the donate button. The part you feel in that moment isn't generosity — it's doubt. Does this money actually reach anyone, or does it vanish into a glossy office and a CEO's salary? You're not being cynical. You're being careful, and there's a public record that answers the question for free.

Almost every U.S. nonprofit has to file an annual tax return called the Form 990 with the IRS, and by law most of it is open to the public. It's the charity's own numbers, in the charity's own words, signed under penalty of perjury. The fundraising email is spin. The 990 is the record.

Where to read it free

You never need to pay a "charity rating" subscription to see the underlying document. Three reliable, free sources:

• ProPublica's Nonprofit Explorer (projects.propublica.org/nonprofits) — search by name or EIN, read multiple years of 990s as PDFs, and see headline figures pulled out for you.
• Candid / GuideStar (guidestar.org) — free account lets you view filed 990s; it's the database most other sites draw from.
• The IRS Tax Exempt Organization Search (apps.irs.gov/app/eos) — the primary government source. Confirms the group is actually a registered tax-exempt org and whether its status was ever revoked.

Start at the IRS search just to confirm the charity is real and currently exempt. Then read the actual return on ProPublica. If a group claims to be a charity but you can't find any 990, that's your first red flag — ask them directly why.

The difference between a 990, a 990-EZ, and a 990-N

Size changes what you can see. Large organizations file the full Form 990, which is detailed. Smaller ones file the shorter 990-EZ. The very smallest file a 990-N "e-postcard" that contains almost no financial detail — just proof they exist. And here's a key gap most donors don't know: churches and many faith-based organizations are not required to file a 990 at all. Their absence from these databases isn't necessarily suspicious — it can just mean they're exempt from filing. For everyone else, a missing return is worth a question.

What to actually look at

You don't need to be an accountant. Focus on a handful of lines.

Program spend vs. overhead. Page 1 of the full 990 and the functional-expense section (Part IX) break spending into three buckets: program services (the actual mission), management/general, and fundraising. Roughly, you want to see the bulk of spending going to program services. A common rule of thumb is that a healthy charity puts most of its money toward programs — but treat ratios as a starting question, not a verdict. A young charity, or one building long-term capacity, can have higher overhead for honest reasons. The ratio tells you what to ask, not who to trust.

Compensation. Part VII lists officers, directors, and the highest-paid employees with their reported pay. Part IX, and Schedule J on larger filers, gives more detail on executive compensation, bonuses, first-class travel, and perks. A six-figure salary at a large, complex national charity may be completely reasonable. The same salary at a tiny local group pulling in modest donations is a flag. Compare pay to the size of the organization and the scope of the work.

Revenue and reserves. Look at total revenue versus total expenses over a few years. Is the group spending what it raises on its mission, or quietly stockpiling? Some reserves are prudent. A massive, growing surplus alongside constant emergency fundraising appeals is a contradiction worth noticing.

The red flags that should slow you down

• Insider transactions. Schedule L discloses business deals with officers, directors, or their family — the charity renting a building from a board member, paying a relative's company, or making loans to insiders. Self-dealing isn't always illegal, but it's exactly where money leaks.
• Fundraising that eats the donations. If the fundraising-expense line is large relative to what's raised, a lot of your dollar is paying to ask for the next dollar. Professional-fundraiser arrangements (Schedule G) can be especially lopsided.
• Names that copy famous charities. Scam operations deliberately pick names a hair away from well-known groups. Confirm the EIN, not just the name.
• No filings, revoked status, or huge gaps. The IRS automatically revokes exemption after three consecutive years of non-filing. If status was revoked or returns simply stop, find out why before giving.
• Vague mission language and empty Schedule O. Schedule O is where organizations explain themselves in plain English. A thin, boilerplate, or missing narrative on a group that raises real money is a tell.

A five-minute donor checklist

Before you give to an unfamiliar group:

1. Confirm it's real and exempt on the IRS search (by EIN).
2. Pull the last two or three 990s on ProPublica.
3. Glance at program vs. fundraising/overhead spending.
4. Scan Part VII / Schedule J for compensation that fits the org's size.
5. Check Schedule L for insider deals and Schedule O for a real explanation.

Where the record stops

Be honest with yourself about the limits. A 990 is mostly self-reported and unaudited by the IRS, and it lands months after the year it covers — so it's a rear-view mirror, not a live feed. It can show you that money was spent on programs; it can't prove those programs actually worked. A clean 990 means the books look orderly, not that lives were changed.

But that's still enormously more than the fundraising email gave you. The numbers exist, they're free, and they're the charity's own. Read them before you decide — and when a group's story and its filing don't match, believe the filing.