Cancellations and freezes of federal government funding have caused many nonprofits to lay off staff and reduce vital programs and services this year, fundamentally reshaping nonprofit capacity. Given that nonprofits offer essential supports for individuals and communities, people are eager to understand the prevalence and impact of these changes.

The Form 990 and the National Survey of Nonprofit Trends and Impacts are two sources of nationally representative data on nonprofits that can provide answers. Both data sources include nonprofits that provide programs and services and have a significant impact on national, state, and local economies. While many types of tax-exempt organizations file the Form 990, here we focus on 501(c)(3) public charities that file full Form 990s for comparability with the survey, which is entirely made up of 501(c)(3) public charities. (We refer to these public charities as “nonprofits” throughout.)

As researchers and academics, journalists, nonprofit-sector leaders, and more seek to understand disruptions to nonprofits’ government funding this year, there are four main distinctions about these two data sources that can help people decide which source is best for answering their pressing questions about the sector.

  1. No data source captures all US nonprofits.

The National Survey of Nonprofit Trends and Impacts, conducted annually by the Urban Institute in collaboration with American University and George Mason University, and the Form 990 are valuable data sources because they both provide representative information on nonprofits and how federal cuts are reshaping nonprofit capacity. But neither data source includes all nonprofits across the US.

Most nonprofits don’t file the most comprehensive version of the Form 990 from the Internal Revenue Service (IRS), which we refer to as the “full Form 990.” Of the 1.2 million nonprofits registered in 2021, only 323,417 filed the full Form 990. That’s because the IRS allows some nonprofits to file shortened versions of the 990. Nonprofits with less than $200,000 in revenue or less than $500,000 in assets can file the 990-EZ, and those with $50,000 or less in revenue can file the 990-N (“postcard” version). But some of these nonprofits still elect to file the full Form 990. Churches and certain church-related organizations aren’t required to file any version of the Form 990, though some still elect to.

Read the full article about federal cuts reshaping nonprofit capacity by Hannah Martin and Laura Tomasko at Urban Institute.