Nonprofit community-based development organizations, or CBDOs, work in low-income communities and communities of color to implement development projects, such as affordable housing and community facilities, and provide programs and activities that meet community needs. They need financial resiliency and sustainability to ensure they can continue to serve their missions in their communities.
To better understand the financial characteristics and health of the nonprofit CBDO sector today and over time, this study is the first to link CBDOs to their financial data reported to the Internal Revenue Service to maintain their tax-exempt status. It examines sector funding flows, leverage, and liquidity by organizational size, geographic region, and real estate holdings.
This technical report covers the steps taken to create the study universe, describes the data sources and financial health metric construction, and provides full tables of descriptive statistics.
We checked for bias or skew in the extraneous filings using t-tests. The means ratios, financial characteristics, and financial metrics for the extraneous records did not vary significantly from the final unique 2018 CBDO filings except in the donation, self-sufficiency, and current ratios, and even then the difference in means altered the final mean by at most 1 percent for any variable. Given the even distribution of extraneous filings across CBDO types, analysis exempting the extraneous filings did not significantly change financial metrics and ratios for any of the categories of analysis (size, region, or real estate holdings). For both original tax filing data used in the 2018 analysis and an additional dataset with extraneous filings removed, see the Grounding Values dataset page on Urban’s Data Catalog.
We added language on page 2, in the first paragraph of step 2, and in the bulleted list on page 8 to clarify the unit of analysis.
