The Nonprofit Sector in Brief: Public Charities, Giving and Volunteering, 2010

This brief highlights trends in the number and finances of 501(c)(3)public charities as well as key findings on private charitable contribu-tions and volunteering, two vital resources to the nonprofit sector. Itincludes the most recent data available.Current HighlightsOver 1.5 million nonprofits were registered with the InternalRevenue Service (IRS) in 2008. The largest single category—501(c)(3) public charities—included over 950,000 organizationsand accounted for three-fourths of nonprofit revenue and six-tenths of nonprofit assets. In 2009, total private giving was$303.8 billion, down 3.6 percent from the revised estimate for2008. In 2009, 26.8 percent of U.S. adults said they volunteeredthrough an organization. Volunteers contributed a total of 15billion hours during the year, worth $279 billion at averagewages.Size and ScopeInternal Revenue Service regulations define over 30 kinds oftax-exempt organizations, often called nonprofits, or not-for-profits. Over 1.5 million were registered with the IRS in 2008(table 1). This figure does not include all nonprofits: those withless than $5,000 annual revenue and religious congregationsneed not register with the IRS (although many congregationsdo). When most people think of nonprofits, they tend to thinkof public charities, those organizations active in the arts, educa-tion, health care, human services, and other areas to whichdonors can make tax-deductible contributions. The nonprofitPublic Charities, Giving, and Volunteering,2010THE NONPROFIT SECTOR IN BRIEF Kennard T. Wing, Katie L. Roeger, and Thomas H. PollakBrief_#71568:18371_UI_Almanac 9/10/10 9:54 AM Page 1 sector, however, also includes advocacy organiza-tions, labor unions, business and professionalassociations, social and recreational clubs, aswell as a variety of more obscure types.In 2008, 597,307 nonprofits collected morethan $25,000 in gross receipts and filed an infor-mational return with the IRS (“reporting non-profits” in table 1). These organizations reportedover $1.9 trillion in revenue and $4.3 trillion inassets.Table 1 shows the tremendous growth in thenonprofit sector. The number of registered non-profits grew 31 percent from 1998 to 2008(reporting nonprofits grew 47 percent). Afteradjusting for inflation, revenues of reportingnonprofits grew 40 percent, expenses grew 49percent, and assets grew 44 percent. Public charities accounted for 63 percent ofregistered nonprofits in 2008 and 59 percent ofreporting nonprofits. The number of registeredpublic charities grew 61 percent from 1998 to2008, while the number of reporting public char-ities grew 56 percent. Public charities reported $1.4 trillion in rev-enue and $2.6 trillion in assets in 2008 (table 2).Hospitals and primary care facilities account forthe largest percentage of total revenue and totalassets, 47.7 and 30.6 percent, respectively.Higher education follows with 11.7 percent oftotal revenue and 21.5 percent of total assets.These and other large organizations also accountfor the majority of expenditures.About three-fourths of charities report lessthan $500,000 in annual expenses. In 2008, 45The Nonprofit Sector in Brief2Source: Urban Institute, National Center for Charitable Statistics, Core Files (1998–2008); the Internal Revenue Service Business Master Files, Exempt Organizations(1998–2008).Notes: Reporting public charities include only organizations that both reported (filed IRS Forms 990) and were required to do so. The following were excluded: for-eign organizations, government-associated organizations, and organizations without state identifiers. All amounts are in current dollars and are not adjusted forinflation.–– = not applicableTable 1. Size and Financial Scope of the Nonprofit Sector, 1998─2008% change,% change, 1998–20081998200320081998–2008(inflation adjusted)All nonprofits1.16 million1.37 million1.51 million30.7─Reporting nonprofits405,744515,876597,30747.2─Revenues ($)1.04 trillion1.36 trillion1.92 trillion84.239.5Expenses ($)923 billion1.30 trillion1.81 trillion96.248.5Assets ($)2.29 trillion3.07 trillion4.34 trillion90.143.9Public charities, 501(c)(3)597,236783,820958,39860.5─Reporting public charities226,493287,259353,48956.1─Revenues ($)765 billion974 billion1.44 trillion88.642.8Expenses ($)697 billion940 billion1.34 trillion92.645.8Assets ($)1.43 trillion1.75 trillion2.62 trillion83.338.8Brief_#71568:18371_UI_Almanac 9/10/10 9:54 AM Page 2 percent of public charities reported less than $100,000 in expenses and 28.9 reported between $100,000 and $499,999 in expenses (figure 1). Yet, these small charities account for only 2.3 percent of all spending by reporting public chari-ties. At the other end of the scale, nonprofits reporting annual expenses of $10 million or more account for just 3.9 percent of charities, but 84.8 percent of all reporting public charity spending. The largest source of revenue across all reporting public charities is fees from the sale of goods and services, such as pa