T H E C E NT E R O N N O N P ROF I T S A N D P H I L A NT H ROP Y
Are There Too Many
Nonprofits?
To set the stage for today’s Forum, “Are there Too Many Nonprofits?” it is im-
Urban Institute
First Tuesday
Event
April 3, 2012
portant to know how many nonprofits there are, where they are located, and other
facts about nonprofit organizations. The following tables and figures are drawn
from The Nonprofit Almanac, 2012 which will be released this summer as an e-book.
ALL NONPROFITS
In 2012, nearly 1.6 million nonprofit organizations were registered with the Internal Revenue Service (IRS). This does not include congregations or their auxiliary
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groups or smaller organizations that earn less than $5,000 in revenue annually.
The Internal Revenue code defines more than 30 different types of tax-exempt enti-
T A BL E 1 . T Y PE S O F T AX - E X E M P T O R G AN I Z AT I O N S , 2 0 1 2
INTERNAL REVENUE CODE
NUMBER
PERCENT
1,057,486
67.9
958,740
61.6
98,746
6.3
501(c)(4) Civic leagues and social welfare organizations
86,916
5.6
501(c)(5) Labor, agriculture, and horticulture organizations
46,812
3.0
501(c)(6) Business leagues, chambers of commerce,
real estate boards and trade boards
63,988
4.1
501(c)(7) Social and recreational clubs
47,210
3.0
501(c)(8) Fraternal beneficiary societies and associations
50,711
3.3
204,187
13.1
1,557,310
100.0
501(c)(3) Religious, charitable, and similar organizations
501(c)(3) Public charities
501(c)(3) Private foundations
501(c)
Total
Other
Source: The Urban Institute, National Center for Charitable Statistics, The Nonprofit Almanac, 2012.
Note: The “Other” category includes employee beneficiaries, cemeteries, trust, charity
risk pools, and all other Internal Revenue Codes. Organizations that had their taxexempt status revoked for failing to file a financial return for three consecutive years
are excluded.
Center on Nonprofits And Philanthropy
Are There Too Many Nonprofits?
ties (table 1). The most common─501(c)(3)─can
organizations. The counties containing the most regis-
receive tax-deductible contributions and consists of
tered nonprofits in 2012 were Los Angeles County, Cali-
private foundations and public charities. The second
fornia with a total of 36,735 groups, followed by Cook
largest category is 501(c)(4) organizations, which
County, Illinois, and New York County, New York, with
includes civic leagues, social welfare organizations,
24,216 and 19,454 nonprofit organizations, respectively.
and lobbying groups.
About 1 percent of counties nationwide have 5,000 or
more registered nonprofits. Counties with smaller popu-
ALL NONPROFITS BY
LOCATION1
lation sizes have fewer nonprofit organizations. Nearly
This vast and varied assembly─about 1 nonprofit
60 percent of counties have fewer than 100 registered
for every 175 Americans─operates all across the
nonprofit organizations.
United States but tends to be located in urban areas
or near cities with higher populations. Large metro-
PUBLIC CHARITIES
politan areas, such as Los Angeles, Chicago, and New
In addition to type and location, nonprofit organizations
York City, have the highest densities of nonprofit
can also be classified by their mission. The National
D EN S I T Y O F N ON P RO F IT S IN T H E N A T IO N ’ S C API T A L , 20 1 2
The District of Columbia is home to
more than 12,700 tax-exempt
organizations. The Dupont Circle area
contains the highest number of
registered nonprofits in the region with a
total of 1,580 groups (12 percent of the
total in DC). The majority of these
organizations are social science research
or social action and advocacy nonprofits.
The neighborhoods with the lowest
number of nonprofits are Congress
Heights and Takoma-Colonial, with 125
and 138 nonprofit organizations,
respectively. The nonprofits located in
these regions are dominated by religious
-related groups, community and
neighborhood associations, and human
service providers.
Source: The Urban Institute, National Center for Charitable Statistics; and the Internal
Revenue Service, Exempt Organization Division, Business Master File, 2012.
FIGURE 1. NUMBER OF NONPROFITS BY COUNTY, 2012
Source: The Urban Institute, National Center for Charitable Statistics, The Nonprofit Almanac, 2012; and the United States Census Bureau, 2010 Census.
Notes: The location is based on the address on file with the IRS and does not include multiple locations or satellite offices. P.O. Boxes are excluded.
FIGURE 2. NONPROFITS PER 10,000 COUNTY RESIDENTS, 2012
Source: The Urban Institute, National Center for Charitable Statistics, The Nonprofit Almanac, 2012; and the United States Census Bureau, 2010 Census.
Notes: The location is based on the address on file with the IRS and does not include multiple locations or satellite offices. P.O. Boxes are excluded.
Center on Nonprofits And Philanthropy
Are There Too Many Nonprofits?
Taxonomy of Exempt Entities (NTEE), was de-
Human service providers account for the largest catego-
signed by the National Center for Charitable Statis-
ry of nonprofits and range from job training and home-
tics (NCCS) to group tax-exempt entities by prima-
less shelters to youth development and sports and recre-
ry purpose, activity, type, and major function.
ation. The second largest category is “Other education”
which includes PTAs, PTOs, elementary and secondary
There are over 600 distinct NTEE codes including
schools, fraternities, scholarships and alumni associa-
opera groups, charter schools, AIDS research, job
tions.
training, parks and playgrounds, international agriculture development, women’s studies, and insur-
In 2010, public charities collected $1.52 trillion in reve-
ance providers. The codes are grouped into 12 ma-
nue, reported $1.47 trillion in expenses, and $2.7 trillion
jor categories as shown in table 2, along with the
in assets. The driving forces in the sector are health care
number and finances of public charities that report
and education, specifically hospitals and higher educa-
financial information to the IRS in each category.
tion. Health organizations accounted for 60 percent of
T A BL E 2 . O R G AN I Z A TIO N S , R E VE N U E , E X P EN S E S , AN D A S S E T S , 2 01 0 1
$, BILLIONS
ALL PUBLIC CHARITIES
NUMBER
% REVENUES EXPENSES
PERCENT (%)
ASSETS REVENUES EXPENSES
ASSETS
Arts, culture, and humanities
39,537
10.8
31.0
29.5
98.9
2.0
2.0
3.7
Environment and animal-related
16,380
4.5
13.7
12.8
35.1
0.9
0.9
1.3
Education
66,768
18.2
247.9
241.4
806.1
16.4
16.6
29.8
Higher education
2,129
0.6
159.3
155.7
505.4
10.5
10.7
18.7
Other education
64,639
17.7
88.6
85.8
300.7
5.8
5.9
11.1
44,128
12.1
907.7
869.8
1,141.8
59.9
59.7
42.2
4,173
1.1
661.7
629.1
871.9
43.7
43.2
32.2
Other health
39,995
10.9
246.0
240.7
269.9
16.2
16.5
10.0
Human services
124,350
34.0
196.4
189.9
297.3
13.0
13.0
11.0
42,423
11.6
71.2
67.8
252.3
4.7
4.7
9.3
7,538
2.1
31.4
29.6
31.7
2.1
2.0
1.2
Religion-related
23,502
6.4
13.0
12.2
29.2
0.9
0.8
1.1
Mutual benefit2
912
0.2
2.9
2.7
15.5
0.2
0.2
0.6
Unknown or unclassified
536
0.1
0.3
0.3
0.4
< .01
< 0.1
< 0.1
366,074
100.0
1,515
1,456
2,708
100.0
100.0
100.0
Health
Hospitals
Other public and societal benefit
International
Total
Source: The Urban Institute, National Center for Charitable Statistics, The Nonprofit Almanac, 2012.
1.Due to lags in filing and processing the Form 990, financial information on nonprofit organizations is two years behind the registration information
shown in table 1.
2.Mutual benefit organizations include insurance providers, pension and retirement funds, and cemeteries. Other public and societal benefit include civil
rights groups, community and neighborhood development, social science, telecommunications, and public utilities.
Center on Nonprofits And Philanthropy
Are There Too Many Nonprofits?
revenues, 60 percent of expenses and
F I G UR E 3 . N U MBER AN D E X PEN S ES O F P U BLI C C H A RI T I ES , 2 0 10
42 percent of assets. Education, the second-largest subsector, accounted for
16 percent of expenses and 30 percent
85.7%
$10 million or more
4.0%
of total assets. These and other large
organizations also account for the ma-
4.5%
2.5%
$5 million to $9.99 million
jority of expenses.
About three-fourths of charities report
6.2%
11.0%
$1 million to $4.99 million
less than $500,000 in annual expenses
in 2010 (figure 3). Yet, these small char-
1.5%
8.2%
$500,000 to $999,999
ities account for only 2.2 percent of all
spending by reporting public charities.
1.7%
$100,000 to $499,999
29.0%
At the other end of the scale, nonprofits
reporting annual expenditures of $10
million or more account for just 4.0 per-
Under $100,000
0.5%
45.3%
cent of charities, but 85.7 percent of all
reporting public charity spending.
Excluded from these financial figures
Expenses
Number
Source: The Urban Institute, National Center for Charitable Statistics, The Nonprofit Almanac, 2012.
are the more than 400,000 organizations that file the Form 990-N annually.
The Form 990-N, also known as the e-
The Urban Institute’s Center on Nonprofits and Philanthropy conducts research on
Postcard, was designed for smaller or-
the nonprofit sector to inform decisionmakers in government, nonprofits, founda-
ganizations─those with $50,000 or less
tions and business. Our mission is to create an objective picture of the nonprofit
in revenue─and asks basic questions
about the organization’s location and
officers. Starting in 2006, organizations
sector, advance transparency and accountability, and assess consequences of
public policies on the sector through rigorous research. We facilitate dialogue on
pressing issues by hosting policy briefings and by disseminating findings widely.
Our publications are available on the Urban Institute web site, at
http://www.urban.org/center/cnp/.
that failed to file a tax return with the
IRS for three consecutive years auto-
Through the National Center for Charitable Statistics (NCCS) we create and main-
matically have their tax-exempt status
tain the National Nonprofit Data System, a research-quality data source on the
revoked. To date, over 428,000 groups
have lost their tax-exempt status.
nonprofit sector. NCCS translates data on the sector’s size, scope, and financial
trends into accessible information for local, state, and national policymakers and
provides data and technical assistance to scholars and the public. NCCS databases can be accessed at http://www.nccs.urban.org.
1. The location is based on the address on file with the
IRS and does not include multiple locations or satellite
offices. Nonprofits with P.O. Boxes are also excluded.