Scope of the Arizona Nonprofit Sector

Title

Glossary and Sources

Glossary

  Definition Source
Congregation A generic term that refers to all churches and religious organizations. Religious organizations that are not churches typically include nondenominational ministries, interdenominational and ecumenical organizations, and other entities whose principal purpose is the study or advancement of religion. Churches and religious organizations may be legally organized in a variety of ways under state law, such as unincorporated associations, nonprofit corporations, corporations sole, and charitable trusts. IRS tax guide for Churches and Religious Organizations. Publication 1828 (11-2009)
Corporate Grantmaker Corporate grantmakers are those that engage in corporate giving by making charitable investments derived from their business activity. Responsible corporate funders plan their giving strategically to attack root causes of problems that threaten the health of global communities (and therefore the health of the corporations themselves). These social investments can be cash, products, in-kind services, or employee voluntarism. Many companies make charitable contributions through both a company-sponsored foundation and a corporate contributions program. Council on Foundations / Corporate Grantmakers
Corporate Giving Program A charitable giving program operated by a corporation and funded as part of its annual operating budget. A corporate giving program has no independent endowment and its budget is typically administered by a corporate staff, and directed by the CEO or an advisory committee of management staff members. A corporate giving program is not subject to the rules and regulations governing private corporate foundations. United Philanthropy Forum
Community Foundation A community foundation is a tax-exempt, nonprofit, autonomous, publicly supported, nonsectarian philanthropic institution with a long term goal of building permanent, named component funds established by many separate donors to carry out their charitable interests and for the broad-based charitable interest of and for the benefit of residents of a defined geographic area, typically no larger than a state. Council on Foundations / Community Foundations
Donative Organization Donative nonprofits are those charitable organizations that are supported primarily by public contributions and grants.  
Grantmaker The term Grantmaker refers to any organization that is engaged in philanthopic activities by making grants to other charitable organizations. The majority of the grantmakers are private foundations, but some public charities also have grantmaking as their main charitable activity. Read more
NTEE Codes (National Taxonomy of Exempt Entities) The National Taxonomy of Exempt Entities (NTEE) system is used by the IRS and NCCS to classify nonprofit organizations. It is also used by the Foundation Center to classify both grants and grant recipients (typically nonprofits or governments). NCCS and the IRS use the NTEE-CC system, described below, while the Foundation Center uses a slightly different version with more codes, as well as "population/beneficiary" codes to indicate the type of population served and "auspice" codes to indicate religious or governmental affiliation. NCCS
Private Foundation Foundations that derive most of their funding from a single source which can be a family, an individual, or a corporation. According to the IRS: "Every organization that qualifies for tax exemption as an organization described in section 501(c)(3) is a private foundation unless it falls into one of the categories specifically excluded from the definition of that term (referred to in section 509(a))", in which case it will be eligible to be treated as a public charity. IRS / Private Foundations
Private Operating Foundation A private operating foundation is any private foundation that spends at least 85 percent of its adjusted net income or its minimum investment return, whichever is less, directly for the active conduct of its exempt activities (the income test). In addition, the foundation must meet one of the following tests: the assets test, the endowment test, or the support test. IRS / Private Operating Foundations
Private Grantmaking Foundation Also known as Private Non-Operating Foundation or Independent Foundation. According to the IRS, "a private foundation that is neither a private operating foundation nor an exempt operating foundation is sometimes referred to as a grant-making foundation or a private non-operating foundation." IRS / Private Grant-making Foundations
Public Charity

Generally, organizations that are classified as public charities are those that:

  • Are churches, hospitals, qualified medical research organizations affiliated with hospitals, schools, colleges and universities,
  • Have an active program of fundraising and receive contributions from many sources, including the general public, governmental agencies, corporations, private foundations or other public charities,
  • Receive income from the conduct of activities in furtherance of the organization’s exempt purposes, or
  • Actively function in a supporting relationship to one or more existing public charities.
IRS / Public Charities
Public Foundation A public charity whose primary purpose is grantmaking to multiple individuals or organizations and whose sources of support are predominantly private rather than governmental. Different from a community foundation, the public foundations' focus is not a geographic area but instead on a population group (such as ethnic or racial group or gender) or a common affinity - religious, cultural or philosophical. There is however a significant gray area in this definition. For this reason this report presents both Community and Public Foundations combined in one single category. United Philanthropy Forum
Supporting Organization or Single Organization Support Supporting organizations are charities that carry out their exempt purposes by supporting other exempt organizations, usually other public charities. The classification is important because it is one means by which a charity can avoid classification as a private foundation, a status that is subject to a much more restrictive regulatory regime. The key feature of a supporting organization is a strong relationship with an organization it supports. The strong relationship enables the supported organization to oversee the operations of the supporting organization. Therefore, the supporting organization is classified as a public charity, even though it may be funded by a small number of persons in a manner similar to a private foundation. IRS / Supporting Organization

Sources

National Center for Charitable Statistics (NCCS)

The following files from the National Center for Charitable Statistics are referenced throughout the report. In all cases the most recent available file is used. In the case of the Core Files there is always a ~2 year lag due to the IRS filing requirements of 990 forms. For more information on the core files read here.

1) The Core Files include financial variables from file 990-series forms for those organizations required to file them. Three files are used:

  • CorePC: 501(c)(3) public charities who file a form 990 or 990-EZ.
  • CorePF: 501(c)(3) private foundations, all of which must file a form 990-PF.
  • Core Others: Other exempt organizations, including social welfare organizations, trade unions, and others, who also file a form 990 or 990-EZ.

2) The IRS Business Master Files (BMF) which contain descriptive information for all active organizations that have registered for tax-exempt status with the IRS. Two BMF datasets are made available twice per year: 501(c)(3) organizations, including public charities and private foundations and other exempt organizations, including social welfare organizations, trade unions, and others.

IRS Charities & Nonprofits

The following files were obtained directly from the IRS to complement NCCS master files. All files are current as per the recent publication, usually updated every 6 months.

1) The form 990-N filers

2) The automatic revocation of tax exemption

3) Recent revocations of 501(c)(3) determinations

American Community Survey

The American Community Survey (ACS) is conducted every year to provide up-to-date information about the social and economic needs of your community. The ACS shows how people live--our education, housing, jobs and more. For example, results may be used to decide where new schools, hospitals, and emergency services are needed. The ACS is a product of the United States Census but it is different from the official census in that the census is conducted once every 10 years to provide an official count of the entire U.S. population to Congress. For this report, the American Community Survey is used for nonprofit employment data. The following tables were used from the American FactFinder tool provided by the U.S. Census Bureau:

  • B24060 OCCUPATION BY CLASS OF WORKER FOR THE CIVILIAN EMPLOYED POPULATION 16 YEARS AND OVER Universe: Civilian employed population 16 years and over - 2010 American Community Survey 1-Year Estimates: Shows managerial, service or technician positions by county by class of worker.
  • B24070 INDUSTRY BY CLASS OF WORKER FOR THE CIVILIAN EMPLOYED POPULATION 16 YEARS AND OVER Universe: Civilian employed population 16 years and over - 2010 American Community Survey 1-Year Estimates: Shows industry type.
  • S2408 CLASS OF WORKER BY SEX AND MEDIAN EARNINGS IN THE PAST 12 MONTHS (IN 2010 INFLATION-ADJUSTED DOLLARS) FOR THE CIVILIAN EMPLOYED POPULATION 16 YEARS AND OVER 2010 American Community Survey 1-Year Estimates: Shows median salaries for male and female.
Arizona Giving & Volunteering A summary of data from a web-based survey conducted by the ASU Lodestar Center to more than 700 Arizona resident households conducted in 2009. The report offers detailed results of the charitable behavior of Arizona residents and also discloses specific charitable behaviors for Arizona’s Hispanic population. Data from a 2016 follow-up report was also utilized.
Giving USA Annual Report on Philanthropy The Giving USA reports are comprehensive reports on the sources and uses of charitable giving in the United States. It is researched and produced by The Indiana University Lilly Family School of Philanthropy.
Volunteering in America A website of the U.S. Government which collects volunteer data "through a supplement to the Current Population Survey (CPS) September Volunteer Supplement. The CPS is a monthly survey of about 60,000 households (approximately 100,000 adults), conducted by the U.S. Census Bureau for the Bureau of Labor Statistics. The Volunteer Supplement collects data on the volunteering activities of adults aged 16 and older. Volunteers are considered individuals who performed unpaid volunteer activities through or for an organization at any point during the 12-month period, from September 1 of the prior year through the survey week in September of the survey year."
Foundation Center

The Foundation Directory Online provides a list of grantmakers and grants, nation-wide. All grantmakers are listed following Foundation Center guidelines, which may defer from the classification provided by the National Center for Charitable Statistics. The grants reported by the Foundation Directory Online are limited to grants greater than $10,000. For this report the following criteria was used:

  • Search Grantmakers: Grantmakers located in Arizona or with a Geographic Focus in Arizona. Both cases were studied separately to understand Arizona Based Grantmakers or Arizona Focused Grantmaking accordingly.
  • Search Grants: Where recipient location is Arizona. The complete list of grants, classified by Subject, was downloaded and reported. Some groupings of subjects were done before issuing the report.
GuideStar An organization whose mission is "To revolutionize philanthropy and nonprofit practice by providing information that advances transparency, enables users to make better decisions, and encourages charitable giving." Its website provides access to the Form 990s of all registered nonprofit organizations. For the Scope of the Sector website we have accessed the Form 990s to make individual analysis of certain organizations.
ReferenceUSA / American Church List

Now part of ReferenceUSA, American Church List provides the list of churches that exist in every county of the state. ReferenceUSA draws this list from local directories. This list is expected to be more comprehensive than the list of churches registered with the IRS.

For this report we included all churches of all affiliations and denominations, all sizes and ministries, and filtered only by county for the state of Arizona.

United Philanthropy Forum A national network that supports and strengthens grantmakers in their promotion of effective philanthropy to improve life in their communities.
Center for Civil Society Studies Salamon, Lester M., Megan A. Haddock, S. Wojciech Sokolowski, and Helen S. Tice, Measuring Civil Society and Volunteering: Initial Findings from Implementation of the UN Handbook on Nonprofit Institutions. Working Paper No. 23. P.9 (Baltimore: Johns Hopkins Center for Civil Society Studies, 2007).
Bureau of Economic Analysis

BEA is an agency of the Department of Commerce. Along with the Census Bureau and STAT-USA, BEA is part of the Department's Economics and Statistics Administration. BEA produces economic accounts statistics that enable government and business decision-makers, researchers, and the American public to follow and understand the performance of the Nation's economy. To do this, BEA collects source data, conducts research and analysis, develops and implements estimation methodologies, and disseminates statistics to the public.

  • Gross Domestic Product by State: GDP for Arizona has been obtained from BEA GDP by State section in a table format for all years from 2001 to the present year.

Methodology

Nonprofit Report

The Nonprofit Report uses two major sources, the NCCS IRS business master files and NCCS Core Files. The total number of active nonprofits is drawn from the IRS master files and financial information is drawn from the Core Files.

Not all nonprofits are required to file a form 990 disclosing their financial information. After 2010, organizations with over $50,000 in gross receipts were required to file the 990 or 990-EZ, and private foundations were required to file the 990-PF. Religious congregations are not required to file a 990 of any kind.

Data for the Nonprofit Report section is gathered as follows:

  • Number of Public Charities vs. Number of Private Foundations: First data source is NCCS Business Master Files filtered by subsection code 03 - Charitable Organizations. Private foundations are identified as the ones that file a form 990PF during the period included in the research. All other 501(c)(3) organizations are assumed to be public charities.
  • Number of Charities by Type of 990 form filed: the number of organizations that filed a form 990PF is obtained from NCCS CorePF file. Organizations that filed a form 990N is obtained from the IRS 990N filers and cross referenced with Business Master Files total organizations. The number of organizations that filed a form 990 or 990EZ is obtained from the NCCS CorePC file.

The list of top public charities has been adjusted to reflect the Arizona based top charities: the Association of Universities for Research in Astronomy and Creative Testing Solutions filed their 990 in Arizona and had higher revenue than Hospice of the Valley and Muscular Dystrophy Association; however the first mentioned organization is not headquartered in Arizona and Creative Testing Solutions is a recently incorporated and newly funded research organization, therefore they were removed from the top list of charities. They are however included in the totals throughout the report and their detailed information is available in the Interactive Charts.

Giving Report

The giving research reports on Arizonans' individual, foundation and corporate giving in Arizona and it gathers information from different sources and different, but comparable, time periods.

Information on individual giving was gathered from a survey conducted by the ASU Lodestar Center in 2016. Individual giving consists of private financial contributions to charitable organizations. Survey respondents understand as charitable organizations all those religious or secular entities, registered or not registered with the IRS, which are designed to help the needy, or that serve and support the public interest.

Foundation giving reports the grants and charitable contributions reported by individual or family foundations in 2015. Corporate giving includes corporate foundation's charitable contributions in 2015. In both cases, data was gathered from NCCS, IRS files and Guidestar.

Volunteering Report The volunteering report includes research conducted by Volunteering in America, filtering by Arizona.
Grantmaking Report The grantmakers report was developed by the ASU Lodestar Center. Using NCCS and the Foundation Center as initial sources of information, the final list of active grantmakers in Arizona has been defined by the ASU Lodestar Center following the definition of a Grantmaker.
Economic Contribution

The Economic Contribution of Nonprofits presents several different analysis: contribution to GDP, growth of the nonprofit sector, the variation in sources of revenue used by nonprofits, and employment in the nonprofit sector. Each of these sections use different sources of data:

  • Arizona Nonprofits Contribution to GDP: Gross Domestic Product information was obtained from the Bureau of Economic Analysis. Reports from the BEA presents the GDP information in two sectors: Private and Government. The Nonprofit sector is assumed to be included in the Private sector of such report. In order to estimate the GDP contribution of nonprofit organizations alone, and separate such amount from the Private sector reported by the BEA, the following calculation was performed: Using NCCS, the total amount of nonprofit expenses is gathered. Assuming that at least 66 percent of such expenses go to employee compensation (following national estimates), a dollar amount for a rough estimate of nonprofits contribution to GDP is estimated. It is a assumed that nonprofit organizations contribute to the State's Gross Domestic Product mainly through compensation to their workers. Data for other contribution such as rental value of assets owned, operating surplus, capital consumption and others is not avaialbe. The final amount, 66 percent of nonprofit expenses, is substracted from the BEA information about Private Industries contribution to GDP and presented separately.
  • Growth of the Nonprofit Sector: Historical data sourced from NCCS is used for this study. Circa years are used to represent total amounts per year. A limitation of this study is the fact that "circa files" from NCCS include the latest 990 form available at the time that data was extracted in a given year, forms that may not necessarily reflect the year being reported. Another option to generate this report would be to use the "fiscal year files" from NCCS, the ones guarantee that only the 990 form corresponding to a specific year is included. However in this latter case the limitation is that not all nonprofit organizations necessarily file every single year, in which case a significant amount of nonprofits may be missing from the report. For such reason we have decided to use the "NCCS circa files", instead of the "fiscal year files", as it is assumed to be a better estimation of the complete nonprofit sector in a given year.
  • Employment: Nonprofit employment data is obtained from the American Community Survey. The following reports have been extracted and presented accordingly:
    • B24060 OCCUPATION BY CLASS OF WORKER FOR THE CIVILIAN EMPLOYED POPULATION 16 YEARS AND OVER Universe: Civilian employed population 16 years and over - 2010 American Community Survey 1-Year Estimates: Shows managerial, service or technician positions by county by class of worker.
    • B24070 INDUSTRY BY CLASS OF WORKER FOR THE CIVILIAN EMPLOYED POPULATION 16 YEARS AND OVER Universe: Civilian employed population 16 years and over - 2010 American Community Survey 1-Year Estimates: Shows industry type.
    • S2408 CLASS OF WORKER BY SEX AND MEDIAN EARNINGS IN THE PAST 12 MONTHS (IN 2010 INFLATION-ADJUSTED DOLLARS) FOR THE CIVILIAN EMPLOYED POPULATION 16 YEARS AND OVER 2010 American Community Survey 1-Year Estimates: Shows median salaries for male and female.
Compensation Report

This report, compiled every three years by the ASU Lodestar Center for Philanthropy and Nonprofit Innovation, provides valuable compensation data across 50+ nonprofit job positions, as well as findings on employee retirement, insurance, paid time off, and other benefits. This Scope update utilizes the 2019 edition.