Part III - Statement of Program Service Accomplishments

A program service is a major (usually ongoing) objective of an organization, such as adoptions, recreation for the elderly, rehabilitation, or publication of journals or newsletters.

Step	Action
1	State the organization's primary exempt purpose.
2	All organizations must describe their exempt purpose achievements for each of their four largest program services (as measured by total expenses incurred). If there were four or fewer of such activities, describe each program service activity.
	· Describe program service accomplishments through measurements such as clients served, days of care, therapy sessions, or publications issued.
	· Describe the activity's objective, for both this time period and the longer-term goal, if the output is intangible, such as in a research activity.
	· Give reasonable estimates for any statistical information if exact figures are not readily available. Indicate that this information is estimated.
	· Be clear, concise, and complete in your description. Avoid adding an attachment.
3	If part of the total expenses of any program service consists of grants and allocations reported on line 22, show the amount of grants and allocations in the space provided and include the grants and allocations in the Expenses column.
	· Section 501(c)(3) and (4) organizations, and section 4947(a)(1) nonexempt charitable trusts, must show the amount of grants and allocations to others and must enter the total expenses for each program service reported.
	· For all other organizations, completing the Expenses column (and the Grants and allocations entry) in Part III is optional.
4	Attach a schedule that lists the organization's other program services.
	· The detailed information required for the four largest services is not necessary for this schedule.
	· Section 501(c)(3) and (4) organizations, and section 4947(a)(1) nonexempt charitable trusts, however, must show the expenses attributable to their program services.
5	The organization may show the amount of any donated services, or use of materials, equipment, or facilities it received or utilized in connection with a specific program service.
	· Disclose the applicable amounts of any donated services, etc., on the lines for the narrative description of the appropriate program service.
	· Do not include these amounts in the expense column in Part III.
	· See the instructions for line 82.

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Part IV - Balance Sheets

All organizations, except those that meet one of the exceptions in General Instruction F, must complete all of Part IV and may not submit a substitute balance sheet. Failure to complete Part IV may result in penalties for filing an incomplete return. See General Instruction K. If there is no amount to report in column (A), Beginning of year, place a zero in that column.

See General Instruction E for details on completing a Form 990, or Form 990-EZ, to be filed with any state or local governmental agency.

When a schedule is required to be attached for any line item in Part IV, it is only for the end-of-year balance sheet figure reported in column (B). Give the end-of-year figures for any receivables or depreciable assets and the related allowances for doubtful accounts or accumulated depreciation reported within the description column.

Line 45 - Cash - non-interest-bearing

Enter the total of non-interest-bearing checking accounts, deposits in transit, change funds, petty cash funds, or any other non-interest-bearing account. Do not include advances to employees or officers or refundable deposits paid to suppliers or others.

Line 46 - Savings and temporary cash investments

Enter the total of interest-bearing checking accounts, savings and temporary cash investments, such as money market funds, commercial paper, certificates of deposit, and U.S. Treasury bills or other governmental obligations that mature in less than 1 year. Report the income from these investments on line 4.

Line 47 - Accounts receivable

Enter the total accounts receivable (reduced by the allowance for doubtful accounts) from the sale of goods and/or the performance of services. Report claims against vendors or refundable deposits with suppliers or others here, if not significant in amount. Otherwise, report them on line 58, Other assets. Report any receivables due from officers, directors, trustees, or key employees on line 50. Report receivables (including loans and advances) due from other employees on line 58.

Line 48 - Pledges receivable

Enter the total pledges receivable recorded as of the beginning and end of the year. Do not include the amount of pledges estimated to be uncollectible.

Line 49 - Grants receivable

Enter the total grants receivable from governmental agencies, foundations, and other organizations as of the beginning and end of the year. Organizations that follow SFAS 116 may report the present value of the grants receivable as of each balance sheet date.

Line 50 - Receivables from officers, directors, trustees, and key employees

Report all receivables due from officers, directors, trustees, and key employees, and all secured and unsecured loans to such persons, on line 50 and in an attached schedule discussed below. Report interest from such receivables on line 11. For a definition of key employee, see the instructions in Part V.

When receivables should be reported separately. In the required schedule, report each receivable separately even if more than one loan was made to the same person or the same terms apply to all loans. Report salary advances, and other advances for the personal use and benefit of the recipient, and receivables subject to special terms, or arising from nontypical transactions, as separate loans for each officer, director, trustee, and key employee.

When receivables should be reported as a single total. In the required schedule, report receivables that are subject to the same terms and conditions (including credit limits and rate of interest) as receivables due from the general public (occurring in the normal course of the organization's operations) as a single total for all the officers, directors, trustees, and key employees. Report travel advances for official business of the organization as a single total.

Schedule format. For each outstanding loan, or other receivable that must be reported separately, the attached schedule should show the following information (preferably in columnar form):

1. Borrower's name and title,
2. Original amount,
3. Balance due,
4. Date of note,
5. Maturity date,
6. Repayment terms,
7. Interest rate,
8. Security provided by the borrower,
9. Purpose of the loan, and
10. Description and fair market value of the consideration furnished by the lender (e.g., cash - $1,000; or 100 shares of XYZ, Inc., common stock - $9,000).

The above detail is not required for receivables or travel advances that may be reported as a single total. However, report and identify those totals separately on the attachment.

Line 51 - Other notes and loans receivable

Enter the combined total of notes receivable and net loans receivable. For notes and loans that represent program-related investments (defined in the line 2 instructions), report the interest income on line 2. For all other notes and loans receivable included on line 51, report the income on line 11.

Notes receivable. Enter the amount of all notes receivable not listed on line 50 and not acquired as investments. Attach a schedule similar to that called for in the instructions for line 50. The schedule should also identify the relationship of the borrower to any officer, director, trustee, or key employee of the organization.

Notes receivable from loans by a credit union to its members and scholarship loans by a section 501(c)(3) organization do not have to be itemized. However, identify these loans as such on a schedule and indicate the total amount of such loans that are outstanding.

For a note receivable from another organization exempt under the same paragraph of section 501(c) as the filing organization, list only the name of the borrower and the balance due. For example, a section 501(c)(3) organization would have to provide the full details of a loan to a section 501(c)(4) organization but would have to provide only the name of the borrower and the balance due on a note from a loan to another section 501(c)(3) organization.

Loans receivable. Enter the gross amount of loans receivable, less the allowance for doubtful accounts, from the normal activities of the filing organization such as loans by a credit union to its members or scholarship loans by a section 501(c)(3) organization. A schedule of these loans is not required.

Report loans to officers, directors, trustees, and key employees on line 50. Report loans to other employees on line 58.

Line 52 - Inventories for sale or use

Enter the amount of materials, goods, and supplies purchased or manufactured by the organization and held for future sale or use.

Line 53 - Prepaid expenses and deferred charges

Enter the amount of short-term and long-term prepayments of expenses attributable to one or more future accounting periods. Examples include prepayments of rent, insurance, and pension costs, and expenses incurred for a solicitation campaign of a future accounting period.

Line 54 - Investments - securities

Enter the book value, which may be market value, of securities held as investments. Check the appropriate box to indicate whether the securities are reported at cost or fair market value. When valuing securities at fair market value, use commonly accepted valuation methods. (See Regulations section 20.2031-2.) Attach a schedule that lists the securities held at the end of the year. Indicate whether the securities are listed at cost (including the value recorded at the time of receipt in the case of donated securities) or end-of-year market value. Debt securities of the U.S., state, and municipal governments, corporate stocks and bonds, and other publicly traded securities (defined in the instructions for line 8) do not have to be listed individually, except for stock holdings that represent 5% or more of the outstanding shares of stock of the same class. However, show separate totals for each type of security (U.S. Government obligations, corporate stocks, etc.). Do not include amounts reported on line 46. Report dividends and interest from these securities on line 5.

Line 55 - Investments - land, buildings, and equipment

Enter the book value (cost or other basis less accumulated depreciation) of all land, buildings, and equipment held for investment purposes, such as rental properties. Attach a schedule listing these fixed assets held as investments at the end of the year. Show for each item or category listed, the cost or other basis, accumulated depreciation, and book value. Report the income from these assets on line 6a.

Line 56 - Investments - other

Enter the amount of all other investment holdings not reported on line 54 or 55. Attach a schedule listing and describing each of these investments held at the end of the year. Show the book value for each and indicate whether the investment is listed at cost or end-of-year market value. Report the income from these assets on line 7. Do not include program-related investments. See the instructions for line 58.

Line 57 - Land, buildings, and equipment

Enter the book value (cost or other basis less accumulated depreciation) of all land, buildings, and equipment owned by the organization and not held for investment. This includes any property, plant, and equipment owned and used by the organization in conducting its exempt activities. Attach a schedule listing these fixed assets held at the end of the year and showing, for each item or category listed, the cost or other basis, accumulated depreciation, and book value.

Line 58 - Other assets

List and show the book value of each category of assets not reportable on lines 45 through 57. Attach a separate schedule if more space is needed.

One type of asset reportable on line 58 is program-related investments. These are investments made primarily to accomplish an exempt purpose of the filing organization rather than to produce income.

Line 59 - Total assets

Enter the total of lines 45 through 58. The amounts on line 59 must equal the amounts on line 74 for both the beginning and end of the year.

Line 60 - Accounts payable and accrued expenses

Enter the total of accounts payable to suppliers and others and accrued expenses, such as salaries payable, accrued payroll taxes, and interest payable.

Line 61 - Grants payable

Enter the unpaid portion of grants and awards that the organization has made a commitment to pay other organizations or individuals, whether or not the commitments have been communicated to the grantees.

Line 62 - Deferred revenue

Include revenue that the organization has received but not yet earned as of the balance sheet date under its method of accounting.

Line 63 - Loans from officers, directors, trustees, and key employees

Enter the unpaid balance of loans received from officers, directors, trustees, and key employees. See the instructions for Part V for the definition of key employee. For loans outstanding at the end of the year, attach a schedule that shows, for each loan, the name and title of the lender and the information specified in items 2 through 10 of the instructions for line 50.

Line 64a - Tax-exempt bond liabilities

Enter the amount of tax-exempt bonds (or other obligations) issued by the organization on behalf of a state or local governmental unit, or by a state or local governmental unit on behalf of the organization, and for which the organization has a direct or indirect liability. Tax-exempt bonds include state or local bonds and any obligations, including direct borrowing from a lender, or certificates of participation, the interest on which is excluded from the income of the recipient for Federal income tax purposes under section 103.

For all such bonds and obligations outstanding at any time during the year, attach a schedule showing for each separate issue: (a) the purpose of the issue; (b) the amount of the issue outstanding; and (c) the unexpended bond proceeds, if any. Also indicate whether any portion of any bond-financed facility was used by a third party (other than a governmental unit or section 501(c)(3) organization), and, if so, state the percentage of space used by the third party.

If the tax-exempt bond or obligation is in the form of a mortgage, include the amount of the mortgage on line 64a, and not on line 64b. For such mortgage, include in the above listing, the maturity date of the debt, repayment terms, interest rate, and any security provided by the organization.

Line 64a does not, however, refer to situations where the organization only has a contingent liability, as it would if it were a guarantor of tax-exempt bonds issued by a related entity. Contingent liabilities, such as those that arise from guarantees, should be included as an entry in the separately attached schedule required for line 64a.

Line 64b - Mortgages and other notes payable

Enter the amount of mortgages and other notes payable at the beginning and end of the year. Attach a schedule showing, as of the end of the year, the total amount of all mortgages payable and, for each nonmortgage note payable, the name of the lender and the other information specified in items 2 through 10 of the instructions for line 50. The schedule should also identify the relationship of the lender to any officer, director, trustee, or key employee of the organization.

Line 65 - Other liabilities

List and show the amount of each liability not reportable on lines 60 through 65. Attach a separate schedule if more space is needed.

Lines 67 through 69 - Net assets

The Financial Accounting Standards Board issued Financial Statements of Not-for-Profit Organizations (SFAS 117). SFAS 117 provides standards for external financial statements certified by an independent accountant for certain types of nonprofit organizations. SFAS 117 does not apply to credit unions, voluntary employees' beneficiary associations, supplemental unemployment benefit trusts, section 501(c)(12) cooperatives, and other member benefit or mutual benefit organizations.

While some states may require reporting in accordance with SFAS 117, IRS does not (see General Instruction E). However, a Form 990, or Form 990-EZ, return prepared in accordance with SFAS 117 will be acceptable to IRS.

Organizations that follow SFAS 117. If the organization follows SFAS 117, check the box above line 67. Classify and report net assets in three groups - unrestricted, temporarily restricted, and permanently restricted - based on the existence or absence of donor-imposed restrictions and the nature of those restrictions. Show the sum of the three classes of net assets on line 73. On line 74, add the amounts on lines 66 and 73 to show total liabilities and net assets. This figure should be the same as the figure for Total assets on line 59.

Line 67 - Unrestricted

Enter the balances per books of the unrestricted class of net assets. Unrestricted net assets are neither permanently restricted nor temporarily restricted by donor-imposed stipulations. All funds without donor-imposed restrictions must be classified as unrestricted, regardless of the existence of any board designations or appropriations.

Line 68 - Temporarily restricted

Enter the balance per books for the temporarily restricted class of net assets. Donors' temporary restrictions may require that resources be used in a later period or after a specified date (time restrictions), or that resources be used for a specified purpose (purpose restrictions), or both.

Line 69 - Permanently restricted

Enter the total of the balances for the permanently restricted class of net assets. Permanently restricted net assets are (a) assets, such as land or works of art, donated with stipulations that they be used for a specified purpose, be preserved, and not be sold or (b) assets donated with stipulations that they be invested to provide a permanent source of income. The latter result from gifts and bequests that create permanent endowment funds.

Organizations that do not follow SFAS 117. If the organization does not follow SFAS 117, check the box above line 70 and report account balances on lines 70 through 72. Report net assets or fund balances on line 73. Complete line 74 to report the sum of the total liabilities and net assets.

Some states that accept Form 990, or Form 990-EZ, as their basic reporting form may require a separate statement of changes in net assets/fund balances. See General Instruction E.

Line 70 - Capital stock, trust principal, or current funds

For corporations, enter the balance per books for capital stock accounts. Show par or stated value (or for stock with no par or stated value, total amount received upon issuance) of all classes of stock issued and, as yet, uncancelled. For trusts, enter the amount in the trust principal or corpus account. For organizations continuing to use the fund method of accounting, enter the fund balances for the organization's current restricted and unrestricted funds.

Line 71 - Paid-in or capital surplus, or land, bldg., and equipment fund

Enter the balance per books for all paid-in capital in excess of par or stated value for all stock issued and uncancelled. If stockholders or others gave donations that the organization records as paid-in capital, include them here. Report any current-year donations you included on line 71 in Part I, line 1. Enter the fund balance for the land, building, and equipment fund on this line.

Line 72 - Retained earnings or accumulated income, endowment, or other funds

For corporations, enter the balance in the retained earnings, or similar account, minus the cost of any corporate treasury stock. For trusts, enter the balance per books in the accumulated income or similar account. For those organizations using fund accounting, enter the total of the fund balances for the permanent and term endowment funds as well as balances of any other funds not reported on lines 70 and 71.

Line 73 - Total net assets or fund balances

For organizations that follow SFAS 117, enter the total of lines 67 through 69. For all other organizations, enter the total of lines 70 through 72. Enter the beginning-of-the-year figure on line 73, column (A), in Part I, line 19. The end-of-the-year figure on line 73, column (B) must agree with the figure on line 21 of Part I.

Line 74 - Total liabilities and net assets/fund balances

Enter the total of lines 66 and 73. This amount must equal the amount for total assets reported on line 59 for both the beginning and end of the year.

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