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The Nonprofit Sector in the US

Nonprofit organizations are an eclectic group of organizations whose main purpose is benefit society, communities, or their own members by offering services to individuals or other organizations, or by undertaking a range of other activities. Nonprofits include professional organizations, churches, schools, amateur sports leagues and charities. As of 2005 there were 1.4 million registered with IRS. This count excludes most congregations, small grassroots organizations, and some other nonprofits. Based on the information collected as part of this project, we estimate that the inclusion of all of these types of organizations would bring the total to more than 2.5 million nationally.

The Nonprofit Sector in the US

Many organizations (National Center for Charitable Statistics, 2006)

  • 1.4 million registed with IRS as tax-exempt entities (2005)
    • 845,200 public charities
    • 103,900 private charitable foundations
    • 464,600 other nonprofits
  • 377,600 congregations
  • Unknown number of nonprofits are not registered with the IRS because they are not equired to do so or are not registered for other reasons.

Large Amounts of Revenues (National Center for Charitable Statistics, 2006)

  • Estimate for IRS-registered tax-exempt entities that file Form 990 financial information (2004 estimates)
    • Total revenues in excess of $1.36 trillion
    • This constitutes 5.2% of GDP (plus share for those excluded from estimate)
    • Equivalent to 59% of federal outlays in 2004 (plus shares for those excluded from estimates)
    • 2/5 or more accounted for by universities and hospitals
  • Estimate excludes volunteer-only & small nonprofits with less than $25,000 in revenues

Major source of employment (Center for Civil Society Studies, 2006)

  • Employees working for IRS-registered charities (2004 estimates)
    • 9.4 mill. paid employees (plus those excluded from estimate)
    • Account for 7.2% of paid employees, equivalent to 69% of local government workers
    • Receive $312 billion in total payroll, about 6.6% of total U.S. payroll (plus payrolls for employees working for nonprofits excluded from estimates)
    • Another 4.7 mill. volunteers (plus those in nonprofits excluded from estimates)
  • Estimate excludes employees in congregations, mutual benefit, and social welfare nonprofits and others not registered with the IRS as tax-exempt entities.

Major Types of Nonprofit Organizations

Churches, Congregations, Temples, and Similar Religious Charities

  • Not required to register as tax-exempt entities with the IRS

Other charities

  • Exempt under section 501(c)(3) of IRS code
  • Eligible to receive tax-deductible donations
  • Restrictions on types and amount of political activities
  • Includes both public charities and private foundations, depending on whether the organization meets a specified test of public support or has one of the pre-defined public charitable purposes. Public charities offer more tax-advantages for donors, have less demanding reporting and administrative requirements, and are not subject to excise tax on assets. Private foundations include both grant-making foundations and operating foundations that carry out their own program activities.

Social welfare/advocacy nonprofits

  • Exempt under section 501(c)(4) of IRS code
  • Restrictions on certain types of political activities

Mutual benefit nonprofits - exempt under other sections of IRS code

  • Business, labor, agricultural, horticultural, employee organizations
  • Social and recreational clubs
  • Fraternal societies, veterans organizations
  • Cemeteries, credit unions, cooperatives, mutual insurance, crop finance
  • Nonprofit title-holding organizations
  • Political organizations
  • Other – homeowners, state tuition programs

Major Nonprofit Fields of Activity

For information on the types of organizations included under the various nonprofit fields listed below, please see listing available at National Center for Charitable Statistics.

Arts and culture

Education

Environment and animals

  • Environmental quality/protection/beautification
  • Animals

Health

  • General/rehabilitative
  • Diseases/disorders/disciplines
  • Mental health/crisis intervention
  • Medical research

Human services

  • Crime/legal
  • Employment/jobs
  • Food/agriculture/ nutrition
  • Housing/shelter
  • Public safety/disaster
  • Recreation/sports/leisure
  • Youth development
  • Human services

International, foreign affairs, national security

Public and societal benefit

  • Civil rights/social action/advocacy
  • Community improvement/capacity building
  • Philanthropy/volunteerism
  • Research and Science
  • Social Science

Religion and spiritual development

Mutual/membership benefit

Sector Involvement by Individuals

Individual Donations (IU Center on Philanthropy estimate)

  • $223 billion in 2006 (76% of total charitable giving of $295 billion), according to Giving USA
  • 67% of households donate (2002)
  • Households that donate on average give $1,872 (2002), 2-3% of income

Volunteering (Bureau of Labor Statistics estimates)

  • 28-29% of adults (2002, 2004, 2006)
  • Average person volunteers one hour per week

Membership in Associations (AARP study, 1999)

  • 86% are members of at least one voluntary association
  • Average person involved in 3.3 different types of associations
  • Average person involved in 4.2 different associations