IRS Not Certain How Many Charities Are Active, Dormant or Defunct

Posted by Fundraising Pro on May 22, 2009

 What will the nonprofit world look like when the economy stabilizes? Part of what makes that a challenge is that even today, experts don’t have a viable estimate of how many charities are operating as opposed to those existing merely in the files of the Internal Revenue Service (IRS). Some charities go dormant during difficult times only to reemerge later.

The IRS recently reported that nearly 1.2 million charities and nonprofit foundations are registered in the United States. But more than two-thirds of those have less than $25,000 in revenue. Many of these charities - perhaps tens or even hundreds of thousands – may no longer exist.

Predictions that 100,000 charities will fail during the recession need to be tempered, experts say, with the fact that the U.S. added about 500,000 charities in the past decade alone. The pervading thought seems to be that losing 100,000 would not be catastrophic.

Meanwhile, some of the best-positioned charities to ride out the downturn may be food pantries and homeless shelters, which are gaining greater donor interest as the economy takes its toll on the country’s poorest citizens.

And charities that serve a so-called protected population, such as foster-care providers, should continue to see ample state support.

But many types of charities – including arts organizations and providers of after-school and job-training programs- are struggling. If your nonprofit organization needs a new fast and easy funding source, sell the Samaritan Card. Your group earns and your donors save by using the card. It’s a win-win.