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Nonprofits in Washington: 2004 Characteristics There are a few large nonprofits organizations. Most are small. In Washington state, only 53 out of 21,000 501(c)(3)s (one quarter of one percent) report assets over $10 million. The overwhelming bulk of reported assets belong to the largest organizations; total assets for the largest 10% are nearly $50 billion. As the chart shows, 90% of Washington nonprofits report total assets of $800,000 or less to the IRS. (If the largest organization, which has over $20 billion in assets, were shown on a chart at the same scale, the top bar would reach more than 925 yards to the right!) Excluding the assets of foundations would mean that these contrasts were much less sharp.
As might be expected, Washington's nonprofits are concentrated in the urbanized areas of the state.
Data from three official sources confirm and map this concentration. The Secretary of State's count of active 'standard' nonprofit corporations totals nearly 40,000; 38% of them have addresses near Seattle. The tally of 501(c)(3) organizations on file with the IRS is nearly 21,000, with 41% in the Seattle area. Similarly, 41% of the smaller number of employing units identified by Employment Security as nonprofit are in the Seattle area; they employ 106,420 people, 45% of the total for the state. Using the IRS records, which include a county identifier, this geographic concentration can be illustrated in another way. As the charts below show, two thirds of the state's 501(c)(3) organizations are found in King, Pierce, Spokane, Snohomish and Clark counties. When resources are measured, the contrast is even sharper. The 21,000 organizations in those five counties receive 87% of total revenues and hold 92% of the assets.
These distributions reflect the concentration in metropolitan areas of the larger institutions - universities, hospitals and foundations. These organizations have built up, and rely upon, substantial assets to serve populations throughout the state and, for that matter, the world. They own complexes of buildings, manage large endowments, and their employees use complex and expensive equipment.
Fields of Service Nonprofits work in many fields. Healthcare organizations receive the most revenue. Philanthropies hold almost half of all the assets. It is not possible to discern from the available data anything about the characteristics of the populations being served in the reported areas of activity. One of the significant contributions nonprofits make to our state is to maintain an ability to work effectively with people from communities of color, recent immigrants, and victims of discrimination. Those forms of cultural competency are not reflected, however, in any official statistics.
The range of nonprofit activities is huge. One way of addressing the challenge of summarizing such diversity is the National Taxonomy of Exempt Entities. There are 26 categories in the NTEE, but only a few of them include significant numbers of organizations. 75% are in the seven shown in the charts; these seven report 85% of total revenues and 92% of assets. Key financial information for public charities in each Washington county tallied by NTEE code is available online in the County Appendix.
Exemptions from Washington state taxes are based on specific provisions of state law reflecting independent policy choices made by the legislature since territorial days. When all 26 NTEE codes are considered, as in the graph, some broad similarities can be seen, and some pronounced differences. There is a much larger state count for organizations coded 'religion related' because most churches do not report to the IRS while specific application is required for state property tax exemption. More organizations report to the IRS in arts, education, recreation and philanthropy; these organizations characteristically do not own property and hence most do not benefit from a state property tax exemption. About the same number appears in both graphs for human services and in the other categories where both sets of numbers are small. The state data in the chart come from the Washington Department of Revenue's published study Tax Exemptions 2004. This study estimates that exemptions of all types reduced the taxes paid by nonprofit organizations by $663 million, allowing them to put that money to use serving their communities. While substantial, that sum represents less than 4% of the revenues reported by 501(c)(3)s to the IRS, and less than 1% of the total estimated reductions in taxes that have been authorized by the legislature for all taxpayers combined.
Online publication of Nonprofits in Washington:2004 is supported by Clark Nuber
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