Nonprofits in Washington: 2004

Section 1 - Broad Patterns in Growth and Finances

Since the early 1990s, there has been steady and substantial growth in both the number of nonprofit organizations in Washington and in the measures of nonprofit finances.

There are three key sources of information on Washington's nonprofits - the files of the Washington Secretary of State, reports from the Internal Revenue Service, and data about nonprofit employers. They cover different kinds of organizations within the broad field, but the overall pattern of change over the past decade is consistent among them.

Washington Secretary of State

The nonprofit corporations files provide the broadest measure available of the scope of nonprofit activities. Included are a wide variety of associations and charities located in communities across the state. In addition, cooperatives, guilds, business leagues and many specifically chartered groups are counted in this total. Over the past decade, the number of nonprofit corporations registered with the Secretary of State has increased by nearly 50%, to more than 47,000. This increase reflects an even greater rate of formation of new nonprofits; a certain - but uncounted - number of nonprofits cease operations every year. (An estimate of the number of federally recognized nonprofits closing by year since 1950 is in an Appendix.)

(The Secretary of State's website with information for and about Washington nonprofits is at http://www.secstate.wa.gov/charities.)

Internal Revenue Service

In the same period, the number of organizations in Washington recognized as exempt from corporate income taxes by the IRS has grown by nearly two-thirds; the total assets they hold have increased by 362%. The increase in total assets reflects both appreciation in the value of buildings and other property held by nonprofits and the creation of many new foundations in the state - most notably the Bill and Melinda Gates Foundation, now the largest philanthropic organization in the country.

(The Internal Revenue Service offers advice, information and background on exempt organizations through a section of its website at http://www.irs.gov/eo.  Detailed statistics about Washington nonprofits for this report came from the National Center for Charitable Statistics at the Urban Institute, which offers, through an arrangement with the IRS, online access to edited and reformatted versions of the publicly accessible data provided by exempt organizations on IRS Form 990 and in other ways. Summaries of the information in the NCCS "dataweb" can be found online at http://nccs.urban.org/)

Nonprofit employers

The records of the Washington Department of Employment Security identify some em-ployers as nonprofit organizations; many fewer are identified in this way than recorded by the Secretary of State and the IRS. There is no practical way to match the three lists to examine the different patterns of coverage.

In 2003, there were 3,618 employers in Washington state who were identified in the files at Washington State Department of Employment Security as nonprofits. The 234,000 employees who worked for them amounted to about 9% of the Washington state workforce. The number of employers grew by 48% over the decade. In the same period, the wages reported by these employers have grown from nearly four billion dollars to more than $5.7 billion, an increase of 45%.

(The Employment Security Department provides information about the labor market in Washington at http://www.workforceexplorer.com.)

IRS payroll expense data collected in 2001 (the most recent year available) show a total of 3,252 501(c)(3) public charities that paid wages to one or more employees; the total amount paid came to $6.4 billion dollars. Statistics from these disparate sources are included because none is complete by itself while the broadly consistent patterns provide reassurance that an accurate impression is being conveyed.

(The NCCS "core data" includes payroll information for public charities but not private foundations; 2001 is the most recent reporting year for which core data files are published.)

Online publication of Nonprofits in Washington:2004 is supported by Clark Nuber