Over 300,000 Less Charities...all at once

By Gary Snyder

Paul Light in the Washington Post sheds some light (no pun intended) on the shrinkage of the charitable sector.

June produced an initial tally from the Internal Revenue Service’s purge of nonprofits that failed to file the three consecutive years of tax forms needed to maintain their tax-exempt status. All totaled, 275,000 of the nation's roughly 1.6 million charities lost their papers; and of those, 150,000 or so were traditional public charities that help the needy. The purge will continue into the future with as many as 10,000 nonprofits expected to lose their status each month this summer and fall.

No one knows just yet which nonprofits went down. But emerging analysis from both the Urban Institute's National Center for Charitable Statistics and Guidestar has already confirmed that most were small organizations that shut their doors, or never quite existed in the first place. Not all of the now-dead organizations were small, however. According to Guidestar, the top 100 organizations that went under had revenue from $4 million to $400 million – which means these nonprofits must have been lazy, sloppy or just plain ignorant.

The Urban Institute and Guidestar also already know that 25 percent of the revocations involved nonprofits created in the 1990s, and another 25 percent in the 2000s. The rest have been around from time immemorial, many just in a file drawer in someone's basement. Why any of these deceased organizations ever asked for tax-exempt status in the first place is anyone's guess, but the purge leaves the sector lighter and possibly weaker. Moreover, the purge has so far only covered nonprofits that failed to send in their relatively simple tax forms from 2007 to 2009, not yet the ones that may have dropped out as the recession bit even deeper in 2009 and 2010. Expect as many as 50,000 more revocations to come before the end of the calendar year.







Nonprofit Imperative gathers its information principally from public documents...some of which are directly quoted. Virtually all cited are in some phase of criminal proceedings; some have not been charged, however. Cites in various media: Featured in print, broadcast, and online media outlets, including: Vermont Public Radio, Miami Herald, National Public Radio, Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), FOX2, ABC Spotlight on the News, WWJ Radio, Ethics World, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, The Chronicle of Philanthropy, St. Petersburg Times, B, USA Today Topics, , Newsweek.com, Responsive Philanthropy Magazine, New York Times...and many more • Nonprofits: On the Brink (iUniverse, 2006)