On the financial structure of the US non-profit sector

Abstract

Chapter 4 of the Nonprofit Almanac concerns financial trends in private foundations and other non-profit organisations, reporting the sources and disposition of annual funds and several measures of organisational wealth. Like the rest of the volume, this chapter reports only financial measures of input and output use. This is regrettable, for the distinctive outputs of the sector are often undervalued at market prices (due to external benefits), and financial aggregates shed no light on the sector's impact on the distribution of income. Many of the data are derived from the organisational tax forms as compiled by the Statistics of Income (SOI) division. Tax-return data may be less 'noisy' than survey data because organisations can be held accountable for what they report, but there are two well-known gaps in this sample: small organisations (those with gross receipts under $25,000) and religious organisations (which, with rare exceptions, do not file tax returns). The authors report adjustments to the data based on specially commissioned surveys to correct for the latter omission; additional surveys will be necessary to adjust for the former omission. Commendably, the authors report adjustments which make the SOI and Independent Sector (IS) universes comparable and remove double-counting when funds flow through charitable intermediaries such as private foundations and United Way agencies. The continuing heroic efforts of IS are progressing nicely towards a complete map of the independent sector. Most of the 'shortcomings' below should not surprise the authors, who will continue to progress through supplemental surveys and improved imputation methodology in future editions. I organise my remarks into two sections: problems with entity-level reporting; and suggestions for presentation of data.