Reporting Endowment Funds with Form 990
On Part IV, Line 10 of IRS Form 990, you must answer if your exempt organization held any assets in temporarily restricted endowments, permanent endowments, or quasi-endowments – the ownership of these funds are either directly with your tax-exempt group or a through a related organization.
Endowment Assets
The IRS requires you to enter the amounts of current and prior year contributions, grants, administrative expenses, and asset transfers to the organization’s endowment funds. List your estimated percentage of total endowment funds along with any information on other grants that aren’t in your group’s possession.
Types of Endowment Funds
The IRS breaks down endowment funds into three categories – the funds you report will fit either one or all of these classifications:
- Temporarily Restricted Endowments – Donor-restricted gifts that provide an income source for a specified amount of time or until a particular event occurs.
- Permanent Endowments – Donor-restricted gifts that provide an ongoing source of revenue and includes the stipulation that invests and retains the principal.
- Quasi-Endowments – Also known as Board-Designated Endowments, these are funds established within the organization from either unrestricted donations or organizational funds.
Even though there are different types of endowments, you report them all together as a lump sum for the current and prior years and then provide a percentage amount of the current year-end balance for each classification.
Possession of Funds
You need to indicate whether or not there are any endowment funds owned by unrelated organizations or any related organizations. If funds are in possession of a related organization, you have to confirm whether or not those groups are listed on a Schedule R. Finally, the IRS requests you describe the intended uses of the organization’s endowment funds in Part XIII of the Schedule D.
With ExpressTaxExempt.com, you can enter all your information regarding endowment funds on a single screen, and we automatically generate it correctly on your Schedule D.
Contact our U.S. – based support team for any other questions or concerns about reporting endowment funds – we’re available at 704.839.2321, Monday through Friday from 9 a.m. to 6 p.m. EST or send a message at your convenience with [email protected].
