When one thinks of ABT, finance is not necessarily the first thing that comes to mind. It is a world away from the stage, the perfectly poised dancers, and the glitz and glamour of galas frequented by those talked about in The New York Times. And yet, it is a crucial part of operating America’s National Ballet Company®, indeed any organization. Like the support beams that beautiful Venetian houses sit on alongside the canals, if forgotten, it could be eroded away leaving the organization sinking!
One of the best things about an internship at ABT is the opportunity to get an insight into the different departments into the organization, through various workshops and talks that occur each Friday. On one recent Friday, Godwin Farrugia, ABT’s Financial Controller, spoke to us about finance and helped us to decipher the various elements of the Form 990. The Form 990 is the annual report that a nonprofit organization, as determined under section 501(c)(3) of the Internal Revenue Code, must submit to the IRS. It provides financial information of the organization’s activities over the preceding year, including its revenue, expenses, assets, details about its endowment (if any), and details of its personnel. These reports are disclosed to the public and are made available on helpful sites like Guidestar. However, like all things published by the IRS, it almost requires a degree to decipher each question, and what it reveals about the organization.
Godwin stepped us through the report, highlighting important questions asked by the IRS, what each section means, and basically why things are the way they are. For example, what’s the rationale of following a calendar year over a June-July fiscal year, the differences between “temporarily restricted” and “permanently restricted” endowment (Hint: one is akin to deferred revenue), and what may sound alarm bells! Reading Form 990s is a crucial skill when working with nonprofits as it gives you important information about a nonprofit organization’s programs, how much revenue is generated from its programs (and how much they cost!), and generally the financial health of an organization. The juicier part is finding out who are the highest paid employees as well.
While Form 990s and finance are about as sexy as a ballerina’s feet after a performance of Giselle, it is nothing to dismiss. Like firm feet can support a dancer en pointe seemingly forever, a ballet company with strong financial health helps to ensure it will continue to operate well into the distant future!
Institutional Support Intern