Form 990

Form 990 is an annual information return that most tax-exempt organizations in the United States are required to file with the IRS (Internal Revenue Service). Think of it as the nonprofit world's version of a public company's annual report, but with a twist. While a corporate 10-K report is designed for shareholders, the Form 990 is designed for the public. Its primary purpose is to provide transparency, allowing anyone to peek under the hood of a non-profit organization—from the local animal shelter to a massive university or hospital system. This form is a treasure trove of data, detailing an organization's mission, programs, and, most importantly, its financial health. It includes detailed statements of revenue and expenses, a balance sheet, and a breakdown of how it spends its money. It also reveals the compensation of its top executives and board members, making it an essential tool for accountability.

At first glance, a tax form for charities might seem irrelevant to a value investor focused on for-profit companies. However, ignoring the Form 990 is a rookie mistake. These documents are a powerful, and often overlooked, source