The American nonprofit and philanthropic community plays a crucial role in lives across the country and around the world. In 2013, more than 1.41 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 2013. 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 more than one 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 312,373 religious congregations in the United States as of May 2016 that are not required to file with the IRS, though many of them do.
- Over 275,000 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 doubled from 45,289 in 2013 to 92,653 in 2015.
- The number of newly approved 501(c)3s was 86,915 in 2015, an 8% decrease from the previous year.
- There are 105,030 private foundations registered with the IRS.
- In 2013, 82,197 501(c)4 organizations (civic leagues, social welfare organizations, etc.).
- Two social enterprise models, B Corporations and L3Cs, while still comparatively few, continue to grow in numbers. As of February 2016, the latest tally by interSector Partners lists 1,326, up from 188 in 2008. These companies exist in 9 states and one Oglala Sioux and Navajo tribes. As of January 2014, North Carolina no longer authorizes L3Cs, but current L3Cs can continue to use the designation.
- B Lab reports that there are more than 800 certified B Corporations in 30 states and the District of Columbia. Globally, there are over 1,700 B Corporations in 50 countries.
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 2012, 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. National Center for Charitable Statistics: Number of Nonprofit Organizations in the United States, 2003 – 2013. [View Source]
2. National Center for Charitable Statistics. [View Source]
3. 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, pages 1-2.
4. Internal Revenue Service Data Book, 2015. Publication 55B. Washington, DC. March 2016.
5. Here's The Latest L3C Tally. interSectorPartners, L3C. February 2016. [View Source]
6. B Lab Corporation, 2016. [View Source]
7. National Center for Charitable Statistics: Number of 501(c)(3) Public Charities by Expense Level. [View Source].