Cancellations and freezes of federal government funding have caused many nonprofits to lay off staff and reduce vital programs and services this year. Given that nonprofits offer essential supports for individuals and communities, people are eager to understand the prevalence and impact of these changes.
The Form 990 and the National Survey of Nonprofit Trends and Impacts are two sources of nationally representative data on nonprofits that can provide answers. Both data sources include nonprofits that provide programs and services and have a significant impact on national, state, and local economies. While many types of tax-exempt organizations file the Form 990, here we focus on 501(c)(3) public charities that file full Form 990s for comparability with the survey, which is entirely made up of 501(c)(3) public charities. (We refer to these public charities as “nonprofits” throughout.)
As researchers and academics, journalists, nonprofit-sector leaders, and more seek to understand disruptions to nonprofits’ government funding this year, there are four main distinctions about these two data sources that can help people decide which source is best for answering their pressing questions about the sector.
- No data source captures all US nonprofits.
The National Survey of Nonprofit Trends and Impacts, conducted annually by the Urban Institute in collaboration with American University and George Mason University, and the Form 990 are valuable data sources because they both provide representative information on nonprofits. But neither data source includes all nonprofits across the US.
Most nonprofits don’t file the most comprehensive version of the Form 990 from the Internal Revenue Service (IRS), which we refer to as the “full Form 990.” Of the 1.2 million nonprofits registered in 2021, only 323,417 filed the full Form 990. That’s because the IRS allows some nonprofits to file shortened versions of the 990. Nonprofits with less than $200,000 in revenue or less than $500,000 in assets can file the 990-EZ, and those with $50,000 or less in revenue can file the 990-N (“postcard” version). But some of these nonprofits still elect to file the full Form 990. Churches and certain church-related organizations aren’t required to file any version of the Form 990, though some still elect to.
The National Survey of Nonprofit Trends and Impacts includes a sample of nonprofits pulled from organizations that file a full Form 990 or a 990-EZ. Specifically, the survey data include nonprofits with annual expenses and revenues of $50,000 or more. The nonprofits selected for the survey sample engage in a targeted range of activities, including direct service provision, community building, and advocacy, and primarily receive rather than provide funds. Foundations, hospitals, higher education institutions and schools (day cares, preschools, and K–12), churches and other houses of worship, and other nonprofits with unique business models and contexts are excluded. See our methodology (PDF) for more information.
- The full Form 990 provides a high-level view of nonprofits’ government funding, while the National Survey of Nonprofit Trends and Impacts offers a detailed view of different funding types.
On the full Form 990, the IRS asks nonprofits to report the total dollar amount of government contributions to nonprofits as “the total amount of contributions in the form of grants or similar payments” (PDF). It instructs nonprofits to include funding that primarily and directly benefits the general public (PDF) on the “government grants” line. The 990-EZ and 990-N do not ask about “government grants.”
But that excludes forms of government funding that governmental units primarily benefit from, such as a clinic providing vaccines to government employees, as well as Medicare and Medicaid payments. In fact, the IRS definition explicitly excludes Medicare and Medicaid payments from the “government grants” line. Instead, the full Form 990 instructs nonprofits to add those funding sources to the “program service revenue” line. But that line includes a mix of public and nonpublic funding sources, making it impossible to isolate government funding. Full Form 990 data also don’t specify how much of the government funding nonprofits receive comes from grants versus other kinds of contributions.
The National Survey of Nonprofit Trends and Impacts includes questions to help complete the picture. For example, the data allow researchers to calculate the percentages of nonprofits that receive grants, loans, contracts or fee-for-service payments (other than Medicare and Medicaid), fee-for-service payments from Medicare and Medicaid, fee-for-service payments from other government programs, funding from tribal governments, and other government funding. The survey further disaggregates grants, loans, and contracts or fee-for-service payments (other than Medicare and Medicaid) by whether they come from federal, state, or local governments.
By providing the total amount of funding from government grants and similar payments, the full Form 990 shows us the big picture for some, but not all, government funding. But by breaking down those data by funding type, the survey provides a more complete picture of how trends in government funding are changing, which can inform nonprofits’ and nonprofit funders’ strategic decisions.
- The full Form 990 shows the aggregate amount of government funding nonprofits receive, while the National Survey of Nonprofit Trends and Impacts disaggregates government funding by type of government source.
The full Form 990 asks about funding from local, state, federal, and territorial governments as well as foreign governments, but it reports all those sources together in one data point: total dollar amount of government grants.
Because the National Survey of Nonprofit Trends and Impacts asks organizations to report their government funding by type of government, the data include the percentages of nonprofits’ revenue from federal, state, local, and “other” governments. The survey data also specify the percentages of nonprofits that receive funding from each of those government sources.
By disaggregating nonprofits’ government funding contributions by government type, the National Survey of Nonprofit Trends and Impacts allows researchers to analyze current disruptions to specific types of funding, including federal government funding—something that can’t be achieved with the full Form 990 data alone.
- The National Survey of Nonprofit Trends and Impacts offers timely insights as the effects of policies unfold.
It can take several years for the IRS to release Form 990 data for most nonprofits in a given year. But we’re able to conduct the National Survey of Nonprofit Trends and Impacts annually, and we release findings and the anonymized dataset quickly. That makes the survey a crucial resource for journalists, policymakers, funders, and others looking to better understand current conditions in the sector, particularly nonprofits’ needs and opportunities for impact.
Rigorous data and reporting are essential for accurately understanding the nonprofit sector and its contributions to local, state, and national economies
Disruptions to nonprofits’ federal funding this year have made high-quality nonprofit-sector data and analysis more important than ever. The National Survey of Nonprofit Trends and Impacts can illuminate the impact of policy changes on the nonprofit sector. To learn more about the effects of these funding disruptions on nonprofits’ staff and programs, read our analysis of the survey data.
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