IRS Projects Sector’s Worth At $2.939 Trillion

March 21, 2014       Zach Halper and Patrick Sullivan      

The nonprofit sector collectively had nearly $3 trillion in assets during 2010, according to the Internal Revenue Service (IRS) Statistics of Income Winter Bulletin. Total assets came in at $2.939 trillion. That’s about 9 percent more than 2009, when total assets added up to $2.673 trillion.

The Statistics of Income Winter Bulletin is based on a sample of 186,417 Forms 990 and 990-EZ out of the total 270,000 forms filed by 501(c)(3) organizations in tax year 2010. Churches, certain other religious organizations and organizations with less than $50,000 in gross receipts do not have to file Form 990 or Form 990-EZ. Data from private foundations, which file Form 990-PF, are also not included in the Winter Bulletin data.

“Of the 1,280,739 active organizations recognized by the IRS under IRC section 501(c)(3), about 21 percent filed Form 990 or Form 990-EZ,” statistician Paul Arnsberger wrote in the bulletin.

The lion’s share of the assets were held by the largest organizations, $50 million or more. Those organizations had combined total assets of $2.393 trillion. Those organizations also had the fewest Form 990s in the sample at 6,508. The most numerous nonprofits by forms filed in the sample were those with assets of between $1 million and $10 million, at 61,536.

Net revenue (revenue less expenses) more than doubled in 2010, from $46.7 billion to $95.5 billion across all asset classes. The smallest classes of nonprofits, those with total assets of less than $100,000 and with between $100,000 and $500,000, had strong gains in net revenue in 2010. Both of those classes saw negative revenue less assets in 2009, at a negative $777 million and negative $531 million. In 2010, both classes were back in black, at $1.4 billion and $622 million respectively.

Organizations with total assets of between $1 million and $10 million was the only class to see a reduction in net assets: $4.8 billion in 2009 to $3.9 billion in 2010. The two largest classes, those with between $10 million and $50 million, and more than $50 million, both had net revenue more than double from 2009 to 2010: $4.8 billion to $10 billion, and $37.9 billion to $78.4 billion.

The biggest gains in assets compared to the previous year were investments in public securities ($691.347 billion), investments in other securities ($514.513 billion), and other assets ($202.413 billion). Those same categories in 2009 were at  $609.991 billion, $444.271 billion, and $162.385 billion. Between January 2, 2009 and December 30, 2011, the Dow Jones Industrial Average jumped from 9,034.69 to 12,217.55, with the nadir of 6,626.94 occurring on March 6, 2009.

Nonprofits brought in about $1.58 trillion in gross revenue, an increase of about 8 percent compared to $1.463 trillion for 2009. The vast amount of 2010 total revenue was from program services — $1.14 trillion. This is consistent with the previous year’s data, where it made up $1.081 trillion of the $1.463 trillion in total revenue.

Total contributions came in at $340.5 billion in 2010, up from $316.9 billion in 2009. That number is about $50 billion higher than Giving USA’s $290.89 billion estimate for 2010. Contributions include federated campaigns, fundraising events, government grants and other contributions. Also included under total revenue is net fundraising income: $1.865 billion, up from $1.726 billion in 2009. IRS officials did not respond to requests for comment on why net fundraising income is broken out separately from total contributions, or why the agency’s estimate for total contributions is higher than other industry estimates.

Expenses were up about 5 percent in 2010 compared to 2009, $1.49 trillion versus $1.417 trillion. Program service expenses grew from $1.231 trillion to $1.294 trillion. Nonprofits spent about $667 million more on fundraising in 2010 than 2009, $15.838 billion compared to $15.17 billion. Management and general expenses grew from $171 billion in 2009 to $180 billion in 2010.

You can see the complete Statistics of Income Winter Bulletin at http://www.irs.gov/pub/irs-soi/14winbul.pdf. The nonprofit report begins on page 74.