The American nonprofit and philanthropic community plays a crucial role in lives across the country and around the world.
In 2011, over 1.6 million tax-exempt organizations of all kinds (various 501(c) subsectors) were registered with the IRS
501(c)(3)s make up a majority of tax-exempt organizations, numbering close to 1.1 million organizations in 2011. This number includes public charities, private foundations, and religious organizations.
Composition of the Sector
- The total number of public charities (listed by the IRS, including private foundations) was close to 1.1 million organizations. Whereas other types of nonprofit organizations benefit the private, social, or economic interests of their members, 501(c)(3) organizations must benefit the broad public interest. In recognition of this service, Congress has provided that contributions made to 501(c)(3) nonprofits are tax-deductible. In addition, there are an estimated 327,000 religious congregations who are not required to file with the IRS, though many of them do.
- Over 272,000 public charities lost their tax-exempt status in 2011 because of their failure to comply with new IRS regulations that required nonprofits with less than $25,000 in annual gross receipts to file a new Form 990-N or risk losing their tax-exempt status.
- Over 50% of organizations that lost their tax-exemptions were either human service type organizations (31.2%) or public and societal benefit groups.
- The number of applications to form new charities in 2011 was down to 55,319 – the last time the number of applications was this low was in 1995 when the IRS received 56,408 applications.
- The number of newly approved 501(c)3s declined from a high of 68,278 in 2007 to 49,677 in 2011 (a 27% decline).
- In 2010, there were 120,810 private foundations registered with the IRS.
- In 2011, there were 97,382 501(c)4 organizations (civic leagues, social welfare orgs, etc.)
- Two social enterprise models, B Corporations and L3Cs, while still comparatively few, continue to grow in numbers. As of July 2012, the latest tally by interSector Partners lists 591 L3Cs in 9 states, up from 188 in 2008 (up 212%). L3C legislation is pending in 15 additional states.
- B Lab reports that there are over 520 certified B Corporations in 7 states, up from 125 in 2008 (up 317%) with legislation pending in 7 more states.
Very small nonprofit organizations (those with less than $5,000 in annual revenues) are not required to register with the IRS and, if counted, would increase the number of nonprofits even further.
- Most nonprofits are small. In 2010, three quarters of charities had annual expenses of less than $500,000. Four percent of charitable organizations had annual expenses over $10 million.
What is most impressive about America’s charitable community is the variety of programs it offers. The 501(c)(3) organizations in this network fall into ten major categories (more information on the nonprofit NTEE taxonomy
- Arts, culture, and humanities, such as museums, symphonies and orchestras, and community theatres;
- Education and research, such as private colleges and universities, independent elementary and secondary schools, and noncommercial research institutions;
- Environmental and animals, such as zoos, bird sanctuaries, wildlife organizations, and land protection groups;
- Health services, such as hospitals, public clinics, and nursing facilities;
- Human services, such as housing and shelter, organizers of sport and recreation programs, and youth programs;
- International and foreign affairs, such as overseas relief and development assistance;
- Public and societal benefit, such as private and community foundations, civil rights organizations, civic, social, and fraternal organizations;
- Religion, such as houses of worship and their related auxiliary services
- Mutual/Membership Benefit, such as professional societies and associations, fraternal societies, and pension and retirement funds; and
- Unknown, Unclassified
1. This number is the sum of the
number of organizations registered with the IRS and an estimation of the number
of religious congregations that are not required to file with the IRS.
2. Blackwood, Amy S., Katie l. Roeger, and Srah L. Pettijohn, The Nonprofit Sector in Brief: Public Charities, Giving, and Volunteering, 2012, Urban Institute, 2012: 2.
3. How many religious congregations are there in the U.S.?
National Center for Charitable Statistics at the Urban Institute. [View Source]
4. Blackwood, Amy S and Katie L Roeger. “Revoked: A Snapshot of Organizations That
Lost Their Tax-Exempt Status.” Urban Institute: Center on Nonprofits and
Philanthropy. August 2011, page 1.
Internal Revenue Service, Annual Data Book, Publication 55B.
7. National Center for Charitable Statistics, [View Source].
8. Number of Nonprofit Organizations in the United
States, 1999 - 2009. National Center for Charitable Statistics at the
Urban Institute. [View Source]
9. Here's The Latest L3C Tally. interSectorPartners, L3C. July 5, 2012. [View Source]
10. “B Lab Progress Summary.” B Corporation Annual Report, 2011. Page 6-7. [View Source]