How to Read a 990-PF Like a Grant Strategist (Not an Accountant)

Why Fundraisers Should Care About 990-PFs

Every private foundation in the United States must file IRS Form 990-PF annually, and every filing is a public record. That means you have free, legal access to a detailed financial portrait of any foundation you're considering approaching — their grant recipients, total giving, assets, board members, and more.

The problem? The 990-PF is a tax document. It's 13 parts and dozens of pages of dense IRS formatting. Most fundraisers either skip it entirely or open it, feel overwhelmed, and close it again.

That's a missed opportunity. You don't need to understand the whole form. As a grant strategist, five sections contain nearly everything you need to assess whether a foundation is worth pursuing. This guide walks through each one, explains what to look for, and gives you a framework to evaluate any foundation in about 10 minutes.

Part XV: Grants — The Core Intelligence

If you only read one section, make it this one. Part XV lists every grant the foundation awarded during the tax year: the recipient organization, the amount, and a brief description of the grant's purpose.

Here's how to read it strategically:

• Look for organizations like yours. Do they fund nonprofits with a similar mission, size, or geography? If three youth mentoring organizations appear in the list, that's a strong signal for another youth mentoring nonprofit.
• Note the grant size range. If every grant is between $5,000 and $25,000, don't submit a proposal for $200,000. Match your ask to their pattern.
• Check for repeat recipients. Compare Part XV across 2–3 years of filings. Foundations that fund the same organizations repeatedly may have less room for new grantees — or they may be deeply committed to a sector and looking to expand within it.
• Read the purpose descriptions. These short phrases reveal what the foundation actually cares about. "General operating support" signals flexibility. "For construction of new facility" signals a preference for capital projects. Vague or boilerplate descriptions like "charitable purposes" tell you less but still confirm the relationship.
• Count the grants. A foundation awarding 200 grants per year has a very different decision-making process than one awarding 10. More grants typically means a more formal application process; fewer grants often means relationships and board connections drive decisions.

Part I: Financial Summary — Follow the Money

Part I is the foundation's income statement. For grant strategists, three lines matter most:

• Line 25 — Total grants paid: The bottom line on how much the foundation actually distributed. This is your clearest measure of giving scale. A foundation with $100M in assets but only $3M in grants paid is distributing at the legal minimum.
• Line 1 — Contributions received: Is the foundation receiving new money (from a living donor, for example), or is it spending down an existing endowment? Foundations receiving ongoing contributions have a longer time horizon and growing capacity.
• Revenue vs. expenses: If total revenue consistently exceeds total expenses, the foundation is growing. If expenses exceed revenue year after year, the endowment is being drawn down — which isn't necessarily bad, but it affects their long-term giving capacity.

A useful quick ratio: grants paid ÷ total assets. By law, most private foundations must distribute at least 5% of net investment assets annually. Foundations distributing well above 5% are more generous relative to their size. Those hovering at exactly 5% are doing the legal minimum — not a red flag per se, but worth noting.

Part II: Balance Sheet — Size and Trajectory

Part II shows the foundation's assets and liabilities at the end of the tax year. The key number is total assets (end of year) — this is the foundation's overall size and long-term giving capacity.

But the single number is less useful than the trend. Compare total assets across 2–3 filings:

• Growing assets mean the endowment's investment returns are outpacing distributions. The foundation has increasing capacity and a long time horizon.
• Flat assets mean the foundation is distributing roughly what it earns — sustainable, but not expanding.
• Declining assets could mean poor investment returns, a deliberate spend-down strategy, or a major one-time distribution. Check Part I for context.

A counterintuitive insight: a $50M foundation with assets growing 10% per year is often a better long-term prospect than a $500M foundation with shrinking assets. The smaller foundation has increasing capacity and likely a living donor who's engaged. The larger one may be coasting on legacy assets with a board that meets twice a year.

Part VIII: Officers, Directors, and Trustees

Part VIII lists every officer, director, and trustee of the foundation — their names, titles, addresses, hours worked, and compensation. For fundraisers, this is relationship intelligence.

• Cross-reference with your own board. Does anyone on your board know someone on theirs? Shared professional networks, alma maters, or geographic ties can open doors that cold outreach never will.
• Check compensation. A foundation with zero-compensated trustees (common for family foundations) operates very differently from one with a paid executive director and program officers. Paid staff usually means a more formal application process; unpaid family boards usually mean relationship-driven decisions.
• Look for turnover. New trustees appearing in recent filings may signal shifting priorities. A longtime family foundation bringing on outside board members may be professionalizing — and opening up to new grantees.

The Sections You Can Skip

The 990-PF has 13 parts. As a grant strategist, you can safely skip most of them:

• Parts III–VII cover excise tax calculations, undistributed income, and private operating foundation tests. These are compliance details for the foundation's accountant.
• Parts IX–XIV deal with minimum investment return, distributable amount, and excess distributions. Important for tax planning, irrelevant for prospect research.

One exception: If you're researching an operating foundation (one that runs its own programs rather than making grants), check Part IX-A — it summarizes the foundation's direct charitable activities and can tell you whether they fund external organizations at all.

Quick-Reference Cheat Sheet

Section	What It Tells You	Strategic Question
Part XV	Every grant recipient, amount, and purpose	Do they fund organizations like mine?
Part I, Line 25	Total grants paid this year	How much do they actually give?
Part I, Line 1	New contributions received	Are they receiving new money or spending down?
Part II	Total assets and balance sheet	Is the foundation growing, flat, or shrinking?
Part VIII	Officers, directors, trustees	Do I know anyone — or know someone who does?
Part IX-A	Direct charitable activities (operating foundations only)	Do they even make external grants?

Red Flags and Green Flags

After reviewing dozens of 990-PFs, you'll start to see patterns. Here's what to watch for:

Green Flags	Red Flags
New grantees added each year	Grants only to "pre-selected organizations"
Grant purposes match your mission area	All grants labeled "charitable purposes" with no detail
Assets growing or stable over 3+ years	Assets declining for 3+ consecutive years
Grants paid well above the 5% minimum	Grants paid at exactly 5% of assets
Mix of grant sizes (some large, some small)	Only very large grants ($500K+) to established institutions
New trustees or staff appearing in Part VIII	Same 2–3 family members with no outside board members
Contributions received (Line 1 > $0)	Zero contributions received and declining assets

No single red flag is disqualifying — a family foundation that only funds pre-selected organizations might still add your nonprofit if you have the right board connection. But stacking multiple red flags together is a strong signal to deprioritize and move on to better prospects.

Putting It All Together: A 10-Minute Foundation Assessment

Here's a rapid triage workflow you can use to evaluate any foundation in about 10 minutes:

1. Open Part XV first. Scan the grant list. Are there organizations similar to yours? If not, stop here — this foundation isn't a fit regardless of their assets or stated mission.
2. Check Part I, Line 25. How much did they give last year? Is it enough to be worth your time? A foundation giving $50,000 total may not justify a multi-month cultivation effort.
3. Compare Part II across 2–3 years. Are assets growing, flat, or declining? This tells you about their future capacity and time horizon.
4. Scan Part VIII. Who's on the board? Do you recognize any names? Does anyone on your board have a connection?
5. Make a call: Based on mission fit (Part XV), giving capacity (Part I), financial trajectory (Part II), and relationship potential (Part VIII) — is this foundation worth deeper research and outreach, or should you move on?

Repeat this for each foundation on your prospect list. In an hour, you can triage a dozen foundations and focus your limited time on the 3–4 that are the strongest fit.

Or, skip the manual work entirely — Signal990 runs this analysis across 215K+ foundations automatically, matching you to funders based on mission alignment, giving patterns, and network connections.

Getting Started

The 990-PF is one of the most underused tools in nonprofit fundraising. Now that you know which sections to read and what to look for, you can evaluate any private foundation faster and more strategically than most development teams.

Ready to put this into practice? Create a free Signal990 account to search foundations, see parsed 990-PF data, and discover connection paths to funders through your board. Or browse our foundation directory and nonprofit directory to start exploring.

For the full reverse-lookup method — starting with similar nonprofits and working backward to their funders — see our guide on how to research foundation funders using IRS 990 data.