IRS Data Shows Largest Nonprofits Have Biggest Economic Impact

On a monthly basis the IRS releases a huge file with summary data about all the charities in its Master File of Exempt organizations.  The financial data is limited, but it's enough to show some broad characteristics of charities as economic players.  The National Center for Charitable Statistics in turn makes the IRS master file data available for some standard queries, if you can figure out how to do it.  Their lastest data is from January, 2006, and I've summarized it in a PDF file to download (67.8K). 

The lastest data shows the same pattern:  very large organizations account for most of the economic impact of the nonprofit sector.  Less than 2,000 organizations with gross receipts over $100 million account for 63% of the income of all the organizations combined.  About 11,000 organizations between $10 million and $100 million account for an additional 23%. 

On the other hand, the 178,000 organizations with income under $1 million account for only 3% of the  reported income.  It's a much more pronounced disparity than the typical 80-20 rule: this is closer to an 80-3 rule. 

There's a fundamental misunderstanding of this basic reality of charities.  There's a persistent belief that because small organizations are so numerous, they must have an economic impact in the aggregate.  But it just isn't so. 

And there's Robert Egger, who makes flat out statement in his book Begging for Change that 25% of nonprofits are unnecessary.  When you look at economic impact, 25% is a gross understatement.  More than 90% of nonprofits could go out of business and there wouldn't be a noticeable impact on employment figures. 

Comments

[Jeff Brooks]

I don't think nonprofits are in business to provide employment -- they're here to accomplish their missions. Their impact on the economy, large or small, is a happy side effect. To say a large number of nonprofits don't matter because their impact on employment is small is to miss the point of what nonprofits are all about.

I agree that a large number of nonprofits are unnecessary. But that's because they're ineffective, ineffecient, redundant, or engaged in useless missions -- not just because they happen to be small. If 90% of nonprofits went away, the impact on the economy might be negligible, but the impact on the good works they do would be catastrophic.

[Julius]

Just wanted to say that I agree with Jeff Brooks. The small charities are really important. They might be less effective in raising attention, but they are often effective in achieving their goals.

The problem might be that the small charities need to be more visible and findable. Now they are somewhat 'outshouted' by the big charities, who can afford big marketing efforts.

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[バーバリーマフラー]

複数の政府関係者が明らかにした。外交安全保障政策で助言を得るためとしているが、政府の役職に野党関係者を起用するのは極めて異例だ。国会対策で焦点となる公明党との関係強化を模索する狙いもあるようだが、民主、公明両党間の正式ルートで協議した痕跡はあまり見えず、“民公”接近につながるかどうかは微妙だ。
関係者によると、高野氏の起用は、藤村官房長官が高野氏に「外交機能を強化したい」と打診した。政府高官は３日、「外交関係のアドバイザーだ。国連平和維持活動（ＰＫＯ）の問題も含め、広く意見をうかがう」と説明した。ただ、政府内にも「公明党とのパイプ強化を狙ったものだろう」との見方が強い。

[ティンバーランド]

ティンバーランド堺市北区の象印マホービン元副社長、尾崎宗秀さん（８４）が自宅で襲われ殺害された事件で、尾崎さんが発見される約２時間前、自宅周辺を黒の原付きバイクで往復する不審な男が目撃されていたことが、捜査関係者への取材で分かった。数日前から近所の複数の住民らも目撃しており、大阪府警はこの男が尾崎さん殺害に関与したとみている。

　ティンバーランド捜査関係者によると、尾崎さんは１日午前１０時２０分ごろ、自宅２階の納戸で顔を粘着テープなどで巻かれ、両手足を結束バンドで縛られた状態で発見された。目撃情報は午前８時前後で、通行人が尾崎さん方の周りを走る不審なバイクの男を見ていた。男は黒っぽい服装で、ヘルメットをかぶっていたという。