Giving Compass' Take:
- Progress on digital tools and platforms to make data more accessible has been slow and creates barriers for nonprofit organizations.
- How can donors help increase data accessibility and invest in more equitable data systems?
- Learn more on how to support new grantmaking systems.
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For decades, the nonprofit sector has lagged behind its for-profit and government sector peers across both public and private data sources. Want to know how many car dealers are in your area? Even dating back to the 1980s — 40 years ago! — interested parties could purchase lists from private data providers or access lists of licensed auto dealers from state government sources in both paper and electronic form, and in paper form for multiple prior decades.
Want to know how many private foundations are in your area, or how many nonprofits focus on environmental issues? Good luck. Unless you have a massive computer system or are willing to pay hundreds or thousands of dollars for extracts from a very small number of providers, it is just as difficult to answer these questions today as it was in the 1980s.
To date, progress has been slow but steady. While the Foundation Center started publishing data in print about private foundations across the nation in 1960 (Enterline Fekeci, n.d.), it wasn’t until the early 1980s that a similar effort cataloged data on nonprofits: the National Center for Charitable Statistics (NCCS) was created as a research division of Independent Sector in 1982 (Urban Institute, 1999).
The tools and platforms now predominantly exist to make nonprofit sector data more accessible and useful to everyone. However, our progress as a field is under threat, primarily due to mounting delays in the IRS’ release of the most recent batches of Forms 990.
Prior to 2020, nonprofits already experienced a 14- to 18-month delay between when they filed their Form 990 (due approximately five months after the close of a fiscal year) and when the IRS was able to fully process and release it to the public. However, due to inadequate staffing and resources within the IRS itself, and the aftermath of the pandemic, additional delays are mounting. In September 2022, Candid reported that for 990s filed for tax year 2019 and later, the processing delay for most organizations is now well over 36 months (Clerkin & Koob).
This lengthening delay, the limitations of the Form 990 itself, and other challenges in our data ecosystem highlight critical gaps in our knowledge that are only worsening as time goes by.
- Forms 990 are primarily financial forms, so detailed information about nonprofit service areas or populations of interest is missing or woefully inadequate. For example, 990s cannot tell us whether a nonprofit operates in a single location or many locations, nor what populations the nonprofit serves.
- Many federally collected data sets do not collect, or report, data on nonprofit organizations. All state labor departments, as well as the federal government, report on both employment and unemployment by industrial sector on a monthly or quarterly basis. However, nonprofit employment is not broken out as a separate sector in these regular reports. This creates a massive hole in nonprofit data — one of the largest sectors of the economy.
- Detailed information about foundations and nonprofits relies on a web of independent actors, with very little redundancy. The most comprehensive data about charitable giving comes from the annual Giving USA report, with more concentrated views from projects such as the Association of Fundraising Professionals’ Fundraising Effectiveness Project or the Blackbaud Institute Index quarterly update.
Read the full article about data barriers for nonprofits by Jeff Williams and Alexandra Akaakar at Johnson Center.