Milestone 3:
Fundraising in the Arts
Your guide to completing Part A (990 Metrics) and Part B (Fundraising Strategies) of your organizational audit. This milestone is about reading financial documents critically and connecting fundraising behavior to organizational mission β not just copying numbers from a tax form.
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Get Expert Help βWhat Is a Form 990 and Why Does It Matter for This Assignment?
Form 990 is the annual federal tax return that nonprofit organizations in the United States must file with the IRS. It is publicly available β meaning anyone can read it β because nonprofits receive tax-exempt status in exchange for financial transparency. For your Milestone 3 audit, the 990 is your primary source of verified financial data. It tells you exactly how much the organization brought in, where that money came from, and how it was spent. No other document will give you this level of reliable financial detail.
The assignment tells you to use ProPublica’s Nonprofit Explorer to find your organization’s 990. This is an excellent tool β ProPublica has digitized and indexed hundreds of thousands of 990 filings, making them searchable by organization name, location, and EIN number. The site displays key figures from each filing in a readable format, and you can download the full PDF of the original document if you need to dig deeper.
There are a few variants of the 990 you might encounter. Most arts organizations file the standard Form 990. Smaller organizations (typically with gross receipts under $200,000 and total assets under $500,000) may file a 990-EZ, which is a shorter version. Very small organizations may file a 990-N, which is an e-postcard with minimal financial detail. If your organization only has a 990-N available, flag this in your submission β it will limit what you can say in Part A.
How to Find Your Organization’s 990 on ProPublica
Go to projects.propublica.org/nonprofits. Type your organization’s name in the search bar. If you get multiple results (common with similarly named organizations), check the address or EIN number to confirm you have the right one.
Search for the organization by name
Use the exact name if you know it, or a key term from the name. If your first search turns up nothing, try removing “the,” “of,” or other common words that sometimes get indexed differently.
Click on the correct listing and select the most recent 990
The assignment specifies the “most recent” filing. On ProPublica, filings are listed with the tax year clearly labeled. Note that 990 filings lag by about a year β a 2023 tax year filing might have been submitted in 2024. Use whichever filing year is the most recent available.
Record the five required financial figures
ProPublica displays total revenue, contributions, program service revenue, total expenses, and revenue less expenses on the organization’s summary page. You can cross-check these against the full 990 PDF, which is also downloadable. The figures appear on Part I of the full 990 form.
Note the fiscal year the numbers represent
Always specify which fiscal year your data is from when you write up Part A. This matters because arts organizations often had unusual financial years during 2020β2022 due to COVID impacts β context your instructor will expect you to acknowledge if the data looks anomalous.
Can’t find your organization on ProPublica?
Try two alternatives. First, search by EIN number rather than name β look up the EIN on the organization’s website (often listed in the footer or on donation pages) and search for it directly. Second, use Charity Navigator or Candid (GuideStar) as backup sources β both host 990 data as well, though some require a free account. If your organization is too small to file a standard 990, note this clearly and explain what that filing type means for what you can and cannot analyze.
Part A: Reading the 990 Metrics β What Each Line Actually Measures
The assignment asks you to report five specific numbers and then explain what they tell you. This is a two-part task. Reporting the numbers takes thirty seconds once you find the document. The harder part β and the part that earns you marks β is the analysis. Let’s break down what each figure actually measures, so you can write about it meaningfully.
| 990 Line Item | What It Measures | Where It Appears on the 990 | Key Questions to Ask |
|---|---|---|---|
| Total Revenue | Everything the organization brought in that year β donations, grants, ticket sales, fees, investment income, all of it combined | Part I, Line 12 | Is this growing or shrinking year-over-year? How does it compare to the organization’s size? |
| Contributions and Grants | Donated income β individual donations, corporate sponsorships, foundation grants, government grants. This is what fundraising activity generates. | Part I, Line 8 | What percentage of total revenue does this represent? Is the organization heavily dependent on donors? |
| Program Service Revenue | Money earned by delivering the organization’s programs β ticket sales, tuition, performance fees, membership dues, program fees | Part I, Line 9 | Does the organization earn revenue from its mission activities, or is it almost entirely donor-dependent? |
| Total Expenses | Everything the organization spent that year β salaries, rent, programming costs, administrative overhead, fundraising costs | Part I, Line 18 | Are expenses close to revenue (tight budget) or is there significant margin? What’s the expense-to-revenue ratio? |
| Revenue Less Expenses | The year-end surplus or deficit. Positive = surplus (organization spent less than it earned). Negative = deficit. | Part I, Line 19 | Is the organization running sustainably, drawing down reserves, or building reserves? Is a deficit normal for this type of org? |
What Do These Numbers Tell You? (The Analysis Section)
This is where most students leave points on the table. They report the five numbers and then write one vague sentence like “the organization seems financially healthy.” That is not analysis. Your instructor wants you to think about what the relationship between these numbers reveals about the organization’s financial structure, fundraising dependency, and sustainability.
Here are the three main interpretive moves you should be making:
Revenue Mix Analysis
Calculate what percentage of total revenue comes from contributions vs. program service revenue. An organization where 80% of revenue is contributions is structurally dependent on donors β a very different financial position than one where earned income covers most expenses.
Surplus/Deficit Interpretation
A small surplus is generally healthy β it means the organization is building reserves. A large surplus may mean they underspent their programs. A deficit doesn’t automatically mean crisis β it may reflect a planned reserve draw-down or a bad year, but you need to say that explicitly.
Connection to Course Themes
The assignment reminds you to use what you’re learning in Business Issues in the Arts. That means connecting these numbers to concepts from your readings β earned income strategy, subsidy dependency, resource development, and organizational sustainability in the nonprofit arts sector.
COVID-19 and Anomalous Financial Years
If your most recent available 990 covers fiscal years 2020, 2021, or 2022, your numbers may look dramatically different from a typical year. Many arts organizations saw earned revenue collapse entirely while receiving emergency government grants and PPP loans that temporarily inflated contributions figures. If you’re working with data from those years, acknowledge this context. A $500,000 surplus in 2021 that came entirely from PPP loan forgiveness tells a very different story than a $500,000 surplus from ticket sales and individual donors. Look at the notes in the full 990 PDF if you need to understand unusual revenue sources.
Example: Strong Part A Analysis Paragraph
Model ExcerptThe numbers (hypothetical for illustration): Total Revenue: $2,340,000 | Contributions and Grants: $1,680,000 | Program Service Revenue: $490,000 | Total Expenses: $2,195,000 | Revenue Less Expenses: $145,000
Weak analysis: “The organization had total revenue of $2,340,000 and a surplus of $145,000, showing it is financially stable.”
Strong analysis: “The organization’s revenue structure reveals significant donor dependency β 72% of total revenue came from contributions and grants, while program service revenue (largely ticket sales and program fees) accounted for just 21%. This means the organization’s financial position is heavily tied to its ability to attract and retain donors year to year. The $145,000 surplus, while positive, is modest at roughly 6% of total revenue β enough to build a thin financial cushion but not substantial reserves. What these figures suggest, in line with what we’ve discussed about earned income strategy in the nonprofit arts sector, is that this organization would benefit from strategies to grow program service revenue and reduce its vulnerability to donor attrition.”
Part B: Fundraising Strategies β What to Look For and How to Analyze It
Part B asks three specific questions about your organization’s fundraising approach. You’ll need to do some light research on the organization’s website, annual reports (if publicly available), social media, and any donor-facing materials they’ve published. Here’s what each question is really asking and where to find the evidence.
β Online donation page β is there one? Is it prominent?
β Membership programs β tiers, benefits, pricing
β Annual fund campaigns β year-end appeals, Giving Tuesday
β Major gifts and planned giving programs
β Events β galas, benefits, auctions
β Recurring giving / sustainer programs
QUESTION 2: Are donors publicly acknowledged?
β Donor recognition walls (physical or web)
β Named tiers in annual report or program book
β Website donor listing pages
β Social media shoutouts
β Physical naming rights (spaces, programs)
QUESTION 3: How are fundraising messages tied to mission or impact?
β Do donation asks lead with mission language or financial need?
β Are specific program outcomes cited as reasons to give?
β Are donor dollars tied to concrete impact (e.g., “$50 funds one student’s workshop”)?
β Is there a coherent case for support, or is it generic?
Donor Acknowledgment: More Than a Name on a List
When you look at how the organization acknowledges donors, don’t just note whether they do it. Think about what the acknowledgment strategy signals about the organization’s donor relationships and its values.
Some organizations use tiered naming systems β “Benefactors,” “Patrons,” “Friends” β with different benefit levels at each tier. This is a standard major gifts strategy. It creates incentives for donors to give more and signals that the organization has a structured development operation. Other organizations publish simple donor lists without tiers, which may reflect a smaller development capacity or a philosophical choice to treat all donors as equally valued. Neither is inherently better, but both tell you something about the organization.
Look specifically at whether the acknowledgment language connects giving to the organization’s work. A donor list that just says “Thank you to our supporters” is functionally transactional. One that says “The following individuals make our community education programs possible” connects donor recognition to mission impact β and that’s a more sophisticated fundraising posture.
Where to find donor acknowledgment information
Check the organization’s annual report first β most arts organizations publish these as downloadable PDFs on their website. Annual reports typically include full donor lists organized by giving level. If there’s no annual report available, check the website’s “Support Us” or “Giving” section for membership benefit descriptions, the “About” section for donor walls or named spaces, and program books if the organization lists PDFs from recent performances or exhibitions.
Mission-Tied Messaging: The Core of Part B Analysis
This is the most conceptually demanding question in Milestone 3, and it’s where your analysis should do the most work. The question isn’t just “does the organization mention its mission when asking for money?” It’s whether the fundraising communication strategy builds a coherent, compelling case that giving to this organization makes a meaningful difference.
Read the donation page, any appeal letters or email newsletters you can find, and the language around membership tiers. Ask yourself: does this organization tell you what your money will do, or does it just ask for money? Does it show impact evidence β numbers of people served, programs delivered, students taught, performances presented β or is it entirely emotive? Does the messaging feel like it came from the same organizational voice as the rest of the website, or does it feel like a separate fundraising template dropped in?
The most effective arts fundraising doesn’t sell the organization’s financial need. It sells the audience on what is possible when the organization is well-resourced β and makes the donor feel like a stakeholder in that possibility.
β A core principle in mission-driven development communicationsCommon Mistakes Students Make on Milestone 3 β and How to Avoid Them
Part A Mistakes
- Reporting numbers without any analysis of what they mean
- Not specifying the fiscal year the data is from
- Confusing contributions with total revenue
- Missing that program service revenue and earned income are the same thing
- Calling a deficit “bad” or a surplus “good” without contextual reasoning
- Not connecting financial structure to course concepts
- Using a 990 from the wrong year (not the most recent)
- Failing to mention COVID context if data is from 2020β2022
Part B Mistakes
- Listing fundraising methods without analyzing how effective or sophisticated they appear
- Only describing what the organization does, not evaluating how well it does it
- Saying “donors are publicly acknowledged on their website” with no detail
- Ignoring the mission-messaging question entirely or giving a one-sentence answer
- Not citing specific evidence from the organization’s actual materials
- Conflating donor recognition strategy with donor acquisition strategy
- Making claims you can’t substantiate from publicly available information
The “no AI” instruction on this assignment
Your assignment explicitly prohibits AI use. This page is designed to help you understand how to approach the work β the structure, the analytical moves, and where to find information β but the actual 990 lookup, the financial figures, and the evaluation of your specific organization’s fundraising materials must come from your own research and analysis. Submitting AI-written analysis of financial data you haven’t personally looked up is both an academic integrity violation and practically counterproductive β the whole point of this assignment is developing your own capacity to read and interpret nonprofit financial documents.
How to Structure Your Milestone 3 Submission
Milestones in organizational audit courses are typically fairly concise β this isn’t a research paper. But they do expect clear organization, evidence-backed claims, and genuine analysis. Here’s a structure that works:
Suggested Submission Structure for Milestone 3
TemplatePart A: 990 Metrics
Open with a one-sentence identification of the organization and the 990 filing year you’re analyzing. Then report the five required figures clearly β you can list them or present them in a short table. Follow immediately with your analysis. Don’t bury your interpretation at the end. Write two to three analytical paragraphs that address: (1) the revenue mix and what it signals about fundraising dependency; (2) what the surplus or deficit tells you about the organization’s financial trajectory; and (3) how these financial patterns connect to what you’ve studied about organizational sustainability in the arts sector.
Part B: Fundraising Strategies
Address each of the three questions in the prompt, in order. For each one, cite specific evidence from the organization’s materials β not general observations. Quote actual language from the donation page if you’re analyzing the mission-messaging question. Name specific donor programs or recognition mechanisms if you’re describing acknowledgment practices. Your analysis should evaluate not just what the organization does but how strategically and effectively it does it, and whether the approach aligns with what you’d expect given its financial profile from Part A.
Closing Synthesis (Optional but Strong)
A short closing paragraph that connects Part A and Part B is not required but often earns higher marks. The link between financial structure and fundraising strategy is direct β an organization with 75% of revenue from contributions should have a more developed fundraising operation than one with 20%. If your Part A and Part B findings are coherent with each other, say so. If they seem contradictory (e.g., heavily donor-dependent but minimal donor cultivation infrastructure), that tension is worth noting explicitly.
ProPublica Nonprofits
Your primary source for 990 data. Search by name or EIN at projects.propublica.org/nonprofits.
Organization’s Website
Check “Support Us,” “Donate,” “Annual Report,” and “About” pages for Part B evidence.
Annual Report PDF
Most mid-size and large arts organizations publish these. Best source for donor lists, impact statements, and program data.
Email Newsletter Archive
Some organizations archive email appeals. These reveal how fundraising messages are actually written to donors.
Connecting Milestone 3 to Earlier Milestones
This is your third milestone in a cumulative semester project. Your instructor will be looking for whether your analysis in Milestone 3 builds on and is consistent with what you’ve established in earlier milestones. If Milestone 1 identified this as a mid-size regional theater with a community education focus, your Part B analysis of fundraising strategy should reference that mission context. If Milestone 2 identified governance or leadership issues, consider whether those might explain anything unusual in the financial data. The organizational audit is meant to build an integrated picture β each milestone should reinforce the others, not exist in isolation.
FAQs: Milestone 3 Questions Answered
Milestone 3 Is About Financial Literacy, Not Just Number Lookup
The five numbers in Part A are easy to find. What takes skill is knowing what they mean β understanding how the ratio of donations to earned income shapes an arts organization’s vulnerability and resilience, and being able to articulate that in writing with evidence to back it up.
Part B asks you to think like a fundraising strategist for a few minutes. Look at your organization’s donor-facing materials as a professional would: are they persuasive? Specific? Tied to mission in a way that makes donors feel their money is doing real work? Or are they generic? Thin? Disconnected from the programs that make the organization worth supporting?
Both parts ultimately ask the same underlying question: does this organization understand what it takes to sustain itself financially, and is it acting on that understanding? The 990 is your evidence for financial reality. The fundraising materials are your evidence for strategic intent. Your job is to connect the two.
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