Real Estate Comparisons: Form 990 and Assessed Values

In January of 2008 we undertook a study of building values reported on the Form 990 (Part IV, line 57c) and assessed values of buildings located in Maryland (assessed values found at Our hope was to gain initial insight into the true asset values of nonprofit organizations (those which include fair market property values).

We selected 30 representative nonprofit organizations located in Maryland (15 with total revenue greater than 10 million, and 15 with total revenue between 1 million and 10 million). We assumed that organizations with less than 1 million in total revenue did not own their building or operated out of a residential property. In order to be included in this initial study the organizations had to have an assessed property value on the MD website and own their own property (meaning that each organization had to be listed as the owner on the MD property website and the type of property had to be listed as exempt).

In the larger organizations, we found that 11 of 15 organizations (73%) had undervalued buildings (ranged from 22% to 100%) on their Form 990s and that 9 of the smaller organizations had undervalued buildings (ranged from 16% to 100%). Of course, this is expected because the figures reported on the 990 are based on book value (typically purchase price) minus accumulated depreciation. We did see some organizations (9 of 30, or 30%) with higher building values reported on their 990 than on the Maryland website. These higher figures look to be primarily due to the organization having multiple locations or substantial investments in equipment (reported on the same Form 990 line as land and buildings). In most organizations, though, we were able to look at the accumulated depreciation schedule attached to the return to the value of the building.

On average for both larger and smaller organizations we found that buildings reported on the 990 were approximately 40% below that of assessed property value. This figure, however, should be used with caution and more research should be done before applying this figure to all orgs. Specifically future research should include:

- Finding the percent of exempt orgs that own property

- Performing similar studies on exempt orgs in different state or regions

Added 01/14/2008 by ablackwood, Modified 05/13/2008 by ablackwood


No comments.

Please login to add your own comments.