Research Results:
Paper Abstracts

Incorporated but Not IRS-Registered:
Exploring the (Dark) Grey Fringes of the Nonprofit Universe

Kirsten A. Grønbjerg, Helen Liu and Thomas Pollak

Nonprofit and Voluntary Sector Quarterly (forthcoming). Revised version of paper presented at Academy of Management Annual Conference, Anaheim, CA., August 10-13, 2008 and under a slightly different title at the Fifth Annual West Coast Nonprofit Data Conference, Phoenix, AZ, April 4-5, 2008.

Abstract

Listings of IRS-registered and state incorporated nonprofits for the same region may differ for a variety of reasons. Using Indiana as a case study, we first describe the distribution of nonprofits across these two listings. We then present findings from a small telephone survey of incorporated nonprofits that are not registered with the IRS for Indiana to explore whether they are excluded from the IRS-listing for statutory, technical, or compliance reasons. We consider several aspects of state incorporation status: date of incorporation and whether active status has been resumed or not. We conclude that researchers need to pay careful attention to the limitations of the IRS registration system when wishing to examine the dimensions of the nonprofit sector at local, state or regional levels. Our finding, that some nonprofits fail to maintain active incorporation status, point to significant problems of nonprofit capacity.

Key Words: Nonprofit; IRS Registration; State Incorporation