IRS Forms 990 as a Research Tool Mark Hager Center on Nonprofits and Philanthropy The Urban Institute - PowerPoint PPT Presentation

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IRS Forms 990 as a Research Tool Mark Hager Center on Nonprofits and Philanthropy The Urban Institute

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Title: IRS Forms 990 as a Research Tool Mark Hager Center on Nonprofits and Philanthropy The Urban Institute


1
IRS Forms 990 as a Research Tool Mark
HagerCenter on Nonprofits and PhilanthropyThe
Urban Institute
2
Form 990
  • Charities with federal charitable exemption must
    file annually.
  • In 1980s, states began to adopt Form 990 as their
    required form as well.
  • Public document. Widespread disclosure and
    legitimacy of form has spurred filing.
  • More than 200,000 public charities filed Form 990
    or Form 990EZ in 2000.
  • Increasingly used by researchers to document and
    understand nonprofit organizations and sector.

3
Not all organizations file
  • Delinquency. Some organizations fail to file, or
    file very late.
  • Small size. No registration if lt 5,000 in gross
    receipts. Not required to file if annual gross
    receipts lt 25,000.
  • Religious focus. Congregations not required to
    file.
  • Entities embedded in larger organizations, or
    Chapters.
  • Unincorporated, or sole proprietorships. If all
    revenues are earned, organizations are not
    motivated to seek charitable exemption.
  • Quasi-governmental. Community action agency or
    mental health clinic, etc., that function as
    govt agencies.

4
Research using Form 990
  • Studies of scope and dimensions of nonprofit
    sector, including local inventories.
  • Subsector analyses.
  • Spatial analyses.
  • Benchmarking of financial variables.
  • Analyses of program services and activities.
  • Sampling frames for primary data collection.

5
Overhead Costs Study
  • Sampling Frame NCCS Core file of circa 2000
    Form 990 filers.
  • Exclusions
  • - Gross receipts lt 100,000
  • - Mutual benefit, pension/retirement
    funds, real estate orgs, named trusts

6
Data Collection
  • 5000 organizations drawn
  • 3782 attempted pre-calls
  • 3114 successful pre-calls
  • 3069 surveys FedExd
  • 1540 surveys returned after four
  • months and multiple prompts
  • 1540 / 3069 50.2

7
Widespread Questions about Financial Reporting
  • Factoid Of nonprofit organizations that report
    at least 5 million in annual contributions,
    about 1 in 4 report no fundraising costs.
  • Factoid Of nonprofit organizations that report
    at least 10 million in annual expenses, about 1
    in 25 report no administrative costs.

8
Research Question
  • How consistent is reporting between IRS Form 990
    and an independent survey of nonprofit financials?

9
Contributions 53 inconsistency
10
Government Grants 32 inconsistency
11
Special Events 39 inconsistency
12
Professional Fundraisers 10 inconsistency
13
Joint Cost Allocations 14 inconsistency
14
DV Consistency Across 5 Measures
15
Functions of Respondents
  • Development Staff (n196)
  • - Fundraising director, other fundraising staff
  • Executive Staff (n819)
  • - Executive or chief operating officer,
    president, administrative staff
  • Accounting Staff (n160)
  • - Financial officer, accounting director,
    accounting staff, bookkeeper, tax professional

16
Do we expect function to matter in consistency of
reporting?
17
Bivariate relationships between function and
reporting consistency
18
Conclusions
  • Form 990 is a valuable source of data on
    nonprofit organizations.
  • Poor reporting on key financials is a big
    challenge to that value.
  • Inaccurate reporting has implications for
    management of individual organizations, public
    policy research, and giving decisions.
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