Research by Author & Topic

Publications by Thomas H. Pollak on Nonprofit Sector

Thomas H. Pollak, coauthor of "Washington-Area Nonprofit Operating Reserves" answers five questions about local nonprofits’ financial health. This first-of-its-kind study looks at the operating reserves of public charities—from soup kitchens to job-training centers to local arts groups—as reported in their 2006 tax filings. The study found that most nonprofits had weak reserves before the downturn, leaving them vulnerable to effects of the recession.

This report, funded by the Meyer Foundation, looks at the operating reserves—the cash and other liquid assets—of public charities in the Washington Metropolitan area. Using IRS Form 990 data, the report found that 57 percent had reserves insufficient to cover three months of expenses, a level that many experts consider the minimum necessary for financial stability. This leaves them especially vulnerable to the rapid declines in revenue or increases in expenses that occur in economic downturns like the present. A substantial perecentage of all types and sizes of organizations lacked adequate reserves.

This study, the first comprehensive look at IRS data on more than 26,000 environmental and conservation organizations – 8,000 of which had revenues of $25,000 or more – reveals a core of prominent national organizations and a larger, more rapidly growing universe of regional, local, and other specialized groups. Taken as a whole, the environmental movement expanded in number of organizations, members, and in total revenues almost every year since 1960. It focused less on advocacy than on projects and education, and was younger, more densely networked, and more dependent upon grants and contributions than was the nonprofit sector in general.

This brief highlights trends from the seventh edition of "The Nonprofit Almanac 2008", prepared by the National Center for Charitable Statistics at the Urban Institute. The Almanac is the latest in the Urban Institute's series of statistical profiles of the nonprofit sector and focuses primarily on 501(c)(3) public charities. We also highlight key findings on private charitable contributions and volunteering, two vital components of the nonprofit sector. This brief includes the most recent available data (2005 and 2006).

America's nonprofit sector continues to grow faster than its business sector or its government. The Nonprofit Almanac 2008 presents data on nonprofits' place in the national economy and trends in wages, employment, private giving, volunteering and finances. The tables and graphics will give scholars, practitioners, and policymakers the data they need at a glance, while the textual analysis will help them plan for the future.

This report summarizes key facts and trends affecting the performing arts sector from 2001 and 2002. The data collected permits managers and observers of nonprofit professional producing companies, and presenters to take a common perspective on how they are financed and operated, to compare organizations of different disciplines and different size, and to explore changes from year to year.

Supporting organizations provide a broad array of services, including grants and other financial benefits, to 501(c)(3) public charities. This study found that nearly 92 percent of the large supporting organizations with no apparent grants in our sample provided significant financial services and benefits to their supported organizations. Complex business and legal factors like those at work in the for-profit world appear to drive such activities in most of these organizations.

Lessons for Boards from the Nonprofit Overhead Cost Project summarizes research findings for board members of nonprofit organizations. Widespread problems with financial reporting and controls suggest that board members should look closely at both as part of fulfilling their fiduciary responsibilities, lest weak organizational infrastructure limit mission effectiveness. The overhead cost project is a collaboration with the Center on Philanthropy at Indiana University.

Special Issues in Nonprofit Financial Reporting: A Guide for Financial Professionals documents significant problems in the reporting of expenses by functional classification in both audited financial statements and Forms 990. The guide encourages greater focus on this area by public accountants. The guide documents special problems raised by accounting for capital and in-kind gifts and offers solutions that are in conformance with generally accepted accounting principles. The information in this guide is based on research findings from the Nonprofit Overhead Cost Project, a major national study conducted in collaboration with the Center on Philanthropy at Indiana University.

Donating to Charity, based on findings from the nonprofit overhead cost project, encourages individuals to consider their own values and check into the operations of various charities before making charitable contributions. Unlike many guides that emphasize quick-fix financial ratios when determining the donation-worthiness of charities, Donating to Charity indicates that these ratios are frequently problematic and are therefore not useful in making giving decisions. The overhead cost project is a collaboration with the Center on Philanthropy at Indiana University.