News and analysis
April 05, 2013

IRS Takes Step to Make Charity Data More Accessible

The Internal Revenue Service took a major step this week toward making financial data about the nonprofit world more broadly accessible to the public.

The tax agency has come under pressure in recent years by open-government advocates who wanted the information available in a format that is easy to put in a spreadsheet and analyze. Until now, the IRS has released this kind of data only to a few research groups; everybody else could obtain only a set of DVDs that allowed readers to look one by one at each charity’s informational tax return, but made large-scale analysis tough to do.

The data released by the IRS doesn’t include everything on the informational returns filed by charities and foundations. Mostly it includes figures on sources of financial support, total assets and revenue, spending on overhead and programs, and compensation paid to a group’s top-paid officials. It also lacks the names and locations of the organizations, instead just offering a federal employee identification number for each group’s form.

Still, nonprofit advocates applauded the wider release of the information.

Said Tom Pollak, program director of the National Center for Charitable Statistics at the Urban Institute: “We really appreciate the IRS taking this major step forward to make a lot of data available on a timely basis, and we are very hopeful that in future years the IRS will be able to expand on what they include in the file.”

The center plans to post the IRS data on its Web site by early next week in a format that makes it easier for people to search and manipulate the data by an organization’s name and its state. Additionally, the center will work to consolidate documents in cases in which nonprofits file more than one tax form in a year or make revisions to their forms.

Seeking Improvements

The release of the data comes two months after an Aspen Institute report called on the IRS and others to take steps to make the information on nonprofit tax returns easier for the public to use and review.

Cinthia Schuman Ottinger, a deputy director at the Aspen Institute, said the IRS move was a “positive step” but she hoped the agency would do more to make all information on the forms available and make them available in a format that is more easily shared and more efficient for computer programmers and developers to use.

Even those experts who were pleased to see the data released say more needs to be done to improve the information available to nonprofits, donors, governments, and others with a stake in how charities operate.

Said Victoria Vrana, a senior program officer at the Bill & Melinda Gates Foundation: “The 990 forms aren’t an end in and of themselves. It’s up to those inside and outside the sector to work to improve the data and to move us to the next level in order to increase effectiveness. It’s not just about the data, but the next level of information we can put to use.”

The Gates foundation is now trying to encourage the gathering of such information by holding a competition that will offer $100,000 grants to projects that help nonprofits and donors pull together information on a wide variety of sources, such as data that would show a nonprofit program’s results, what beneficiaries and grant makers thought about the project, and what other experts say about its value.

The competition, which will finance several projects, expects to receive at least 1,000 applications. Details about how to apply are available at www.grandchallenges.org. [Editor's note: The previous sentence has been revised to note that the foundation plans to name several winners in this competition; a total of 80 grants are expected for challenges on this topic and others.]