Today, as government, civic and business leaders address a wide range of serious challenges, many will reach out to nonprofit groups for help only to find themselves hampered by a lack of up-to-date information on this important sector in our society.

Those needing to understand and track trends in nonprofit revenue, spending, service provision, employment, volunteering and other critical aspects of philanthropic activity will find that most of this information, when available at all, is two-years-old or more. This is too late to deal with problems as they arise, or to signal to communities and policymakers that new challenges are emerging.  What’s more, information that is available is sometimes inaccurate, due to problems with misclassification, inconsistent reporting and other data errors. In short, despite employing nearly 10% of our nation’s workforce and contributing at least 5% to the nation’s Gross Domestic Product, the nonprofit sector sorely lacks timely and accurate data.

Since 2007, the Aspen Institute Program on Philanthropy and Social Innovation has convened leading figures in the field of nonprofit research and data to discuss and assess our nation's nonprofit data collection system. These meetings have provided a unique and neutral forum for discussion, deliberation, information-sharing and consensus-building.

Primary participants include representatives from GuideStar, the National Center for Charitable Statistics at the Urban Institute, the Foundation Center, the Center on Philanthropy at Indiana University, and the Center for Civil Society Studies at Johns Hopkins University. Together these groups play a critical role in informing our society of the size and scope of the nonprofit sector, the level of charitable giving and volunteering, the contribution of the sector to the nation’s economy, the level of employment in the nonprofit sector, nonprofit performance, and other important aspects of social sector activity.  

The project is currently working on the following:

1. Nonprofit Employment Data: The Bureau of Labor Statistics (BLS) regularly collects and releases employment statistics on major industries in the United States. Even though nonprofit groups participate in this data collection, they are not categorized separately; as a result, critical data on nonprofit employment trends are not easily accessible. In response to outreach by the Nonprofit Data Project, the Division of Administrative Statistics and Labor Turnover at BLS, working with Johns Hopkins University, is engaged in a pilot program to test the best and most accurate ways to breakdown Quarterly Census of Employment and Wages information for the nonprofit sector. The goal is to publish up-to-date nonprofit wage and employment information, data that are currently not readily available or accessible to researchers and the public.
2. Federal Grant and Contractor Data: The federal government is a major source of nonprofit revenue, yet it is extremely difficult to get accurate, up-to-date information on federal grants and contracts to the nonprofit sector. According to a 2009 Government Accountability Office study, “the data presently collected provide an incomplete, unreliable picture of the federal government’s funds reaching the nonprofit sector through various mechanisms, although they suggest that these funds were significant.” The Nonprofit Data Project has made recommendations to improve www.USAspending.gov, a website of the US Government that tracks all federal grant and contracts, including those provided to nonprofit organizations.  The project is now monitoring a newly-created body, the Government Accountability and Transparency Board, which is charged with recommending new and better ways of tracking government spending data.
3. The Form 990: Timely public access to the Form 990 is crucial to understanding the size and scope of the nonprofit sector, its role in our economy and trends in private and public sector giving.  Public availability of these forms also leads to greater compliance with the law, improved form accuracy and better accountability, as donors, prospective donors, and regulators all make use of this information.  In short, the efficient, timely, and accurate submission of Forms 990 is of paramount importance to non-profit organizations, the public, researchers, and policymakers at all levels.
   
   Several years ago, the IRS began requiring electronic filing, or e-filing, of Forms 990 and 990-PF for certain classes of tax-exempt organizations; it also made e-filing an option for all filers. Though increasing numbers of nonprofits are taking advantage of electronic filing (which should improve access to the form) in fact, public access to the Form 990 is often delayed by several years. In addition, even when the IRS does release 990s, only images of the forms are provided.  This means that the nonprofit organizations and state charity offices making these forms and data available to the general public must spend millions of dollars re-digitizing the information received from the IRS, delaying public access to this information even further and increasing the potential for errors and omissions.
   
   The Nonprofit Data Project is also working to make improvements to the Form itself.  For example, the new Form 990 obscures government funding to the nonprofit sector by, among other things, failing to separately and clearly report on Medicare and Medicaid vouchers.  Because these vouchers account for such a large portion of nonprofit income, the government revenue data that often emerges from the 990s is not correct. The Nonprofit Data Project recently submitted comments to the IRS seeking to address this and other issues, and is reaching out to many within the sector to explore ways to create a more timely, efficient and accurate Form 990 system.
   
   For more information on the Nonprofit Data Project, contact Cinthia Schuman Ottinger at cschuman@aspeninst.org.