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Brief

A quarter of large nonprofits have no classification, and the gap is not random

American Factbook Research

Published

Data retrieved

Every category page on this site is built from one column of the IRS's organization file: a National Taxonomy of Exempt Entities code, assigned when an organization is recognized. It is how you can ask what a nonprofit does.

58.6% of organizations recognized in the 1950s have no code; 2.5% of those from the 2000s

The share of the organizations this brief covers with no National Taxonomy of Exempt Entities code, by the decade the IRS recognized them.

Source: The IRS

About this chart

The figures

58.6% of organizations recognized in the 1950s have no code; 2.5% of those from the 2000s. The share of the organizations this brief covers with no National Taxonomy of Exempt Entities code, by the decade the IRS recognized them.
Recognized inNo classification codeWithout a codeOrganizations
1950s58.6%4,1247,036
1960s54.4%6,04711,106
1970s46.0%7,64216,617
1980s46.3%9,74621,030
1990s24.6%6,79627,667
2000s2.5%67227,288
2010s2.6%72928,148
2020s4.7%67714,488

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For 44,869 organizations — 26.9% of the 166,855 organizations this brief covers — that column is empty. They are not classified as "other". They are not classified at all, and no category page can see them.

The gap falls on one part of the file

Among organizations recognized under 501(c)(3), the charitable subsection, 17.5% carry no code. Among everything else — trade associations, labour organizations, social clubs, fraternal societies, veterans' posts — it is 74.5%.

So the taxonomy describes charities reasonably well and barely touches the rest of the exempt universe. A reader who takes the category pages as a map of American nonprofits is looking at a map of American charities with three-quarters of the non-charitable world left blank.

And it falls on one period

Sorting by the decade the IRS granted the exemption shows where the blanks sit.

Of organizations recognized in the 1950s, 58.6% have no code. The share falls through the following decades and is still 24.6% for the 1990s. For organizations recognized in the 2000s it is 2.5%.

That is not a gradual improvement. It is a step, and it sits where the IRS says it adopted the taxonomy: 1995. Organizations recognized after that were coded as a matter of course. Organizations recognized before it were coded only if someone went back and did it, and for most of them nobody did.

The IRS assigns a code once, at recognition, and changing one requires a written request. So the blanks are not a backlog being worked through. They are permanent unless an organization asks.

One thing the pattern does not explain: the share ticks back up to 4.7% for organizations recognized in the 2020s. These rows do not say why.

What this means for the pages built on it

Category pages here cover the organizations that carry a code. That is most charities and a minority of everything else, and the pages say so. The alternative — inferring a category from an organization's name or its filings — would produce a complete-looking dataset whose completeness we had manufactured, and this site does not do that.

It also means a count of organizations in a category is a count of classified organizations in that category, and comparisons between categories are sound while comparisons between a category and the whole file are not.

What this brief cannot show

It describes organizations in the $1,000,000-and-above income brackets, which are the organizations this site keeps from the IRS file — not all 1.97 million recognized organizations. It says when codes are missing, not why: the 1995 explanation comes from the IRS's account of its own practice, not from these rows. And an organization's code describes what it said it would do when it registered, which for a body recognized in the 1950s may have little to do with what it does now.

What this cannot show

  • The figures describe the organizations this site keeps from the IRS file — those the IRS places in an income bracket of $1,000,000 or more — and not all 1.97 million recognized organizations. The pattern is similar across the whole file but the percentages are not.
  • An organization with no NTEE code has not been classified by the IRS. It has not been classified as "other", and nothing here says what it does.
  • The decade is the year the IRS granted the exemption, which is not the year an organization was founded or the year it was last looked at.
  • This brief describes when codes are missing. It does not establish why, and the explanation offered — that the IRS began assigning codes in the mid-1990s — is the publisher's account of its own practice, not something these rows prove.

Sources

Every figure above is the recorded result of a query checked into the repository alongside this text. Continuous integration re-runs those queries and refuses the change if a number here and a number there disagree. Read the methodology, or the datasets behind it.

Published by American Factbook LLC. An independent publication.