March 24, 2009

IRS Says Number of Charities and Foundations Hit 1.2 Million

The number of charities and private foundations registered with the Internal Revenue Service has increased by more than 5 percent in each of the past two years, according to figures released by the tax agency, and reached a total of nearly 1.2 million last year.

The IRS reported that the number of groups classified under Section 501(c)(3) of the Internal Revenue Code rose from 2007 to 2008 by 58,548, or 5.2 percent — one of the highest percentage increases in recent years.

In 2008, a total of 1,186,915 charities and foundations were registered with the federal government, compared with 1,128,367 registered in 2007.

The number of groups classified under Section 501(c)(3) has increased by 81 percent since 1996, when the IRS counted a total of 654,186 of them.

The number of all charitable organizations increased by 6 percent from 2006 to 2007; 1.7 percent from 2005 to 2006; 3.5 percent from 2004 to 2005; 4.8 percent from 2003 to 2004; and 6 percent from 2002 to 2003.

High Approval Rate

In 2008, 79,236 groups applied to the tax agency for charity status. The IRS approved 54,969 applications and denied 1,221. The remaining 23,046 applications fell through for a variety of reasons. Some organizations, for example, withdrew their applications or failed to furnish required information.

The IRS acknowledges that an unknown number of the groups classified under Section 501(c)(3) of the tax code are still on the agency’s books, even though they have shut down.

The IRS’s statistics show that the total number of tax-exempt organizations classified under all parts of Section 501(c) of the Internal Revenue Code rose by 62,261, or 3.8 percent, from 2007 to 2008.

The statistics were published in the Internal Revenue Service’s Data Book for 2008, in Tables 24 and 25.