This report addresses the challenges to obtaining better, more usable data about the nonprofit sector to match the sector’s growing importance. In 2010, there were 1.5 million tax-exempt organizations in the United States with $1.51 trillion in revenues. Through the Form 990 in its several varieties, the Internal Revenue Service (IRS) gathers and publishes a large amount of information about tax-exempt organizations. Over time, versions of the Form 990 have evolved that collect information on governance, investments, and other factors not directly related to an organization’s tax calculations or qualifications for tax exemption. Copies of these returns are available one at a time from the filers or from other sources. The IRS creates image files of Form 990 returns and sells compilationsof them to the subscribing public for a fee. Several institutions, particularly GuideStar, the Foundation Center, and the National Center for Charitable Statistics (NCCS) at the Urban Institute, use this IRS data to analyze and present information about individual nonprofits and about the sector as a whole.
Like other important data collected by governments, information contained in the 990s could potentially be far more useful if it were not only public but “open” data. Open data are data that are available to all, free of charge, in a standard format, published without proprietary conditions, and available online as a bulk download rather than only through single-entry lookup. Making the Form 990 data truly open in this sense would not only make it easier to use for the organizations that already process it, but would also make it useful to researchers, advocates, entrepreneurs, technologists, and nonprofits that do not have the resources to use the data in its current form. We argue that open 990 data may increase transparency for nonprofit organizations, making it easier for state and federal authorities to detect fraud, spur innovation in the nonprofit sector and, above all, help us to understand the potential value of the 990 data.