Charitable Giving and the Nonprofit Sector: What Tax Data Can Tell Us Paul Arnsberger, Cynthia Belmonte, Heather Parisi, Brian Raub, and Janette Wilson Statistics of Income, IRS

Disclaimer Any opinions expressed here are solely those of the authors and do not represent the position of the Internal Revenue Service or the Department of the Treasury

Administrative Tax Data are an Excellent Source of Information on Charitable Activity Total contributions made by donors reported on tax returns: $211 billion Charitable donations during life (Form 1040) Charitable bequests at death (Form 706) Charitable donations by corporations (Forms 1120, 1120L, and 1120PC) Total contributions received by recipients reported on tax returns: $245 billion Activities of charities (Forms 990 and 990-EZ) Activities of private foundations (Form 990-PF)

Administrative Tax Data on Charitable Activity Have Limitations Thresholds for filing or for capture by SOI E.g. only estates with gross assets of $5 million or more must file Form 706 Coverage issues E.g. churches not required to file Form 990 series returns Reporting issues Other issues? Good news: a significant portion of economic activity covered is still covered by the data

Charitable Sector Activity, Tax Year 2011 Donor Recipient Individual Itemizers (Cash) Individual Itemizers (Noncash) $6.0 billion $32.7 billion $138.6 billion $4.9 billion Charities $199.3 billion Domestic Private Foundations $45.7 billion $? $13.2 billion $9.8 billion $5.6 billion Other Donors Large Corporations Large Estates Other Recipients

Charitable Sector Activity, Tax Year 2011 Donor Recipient Individual Itemizers (Cash) Individual Itemizers (Noncash) $6.0 billion $32.7 billion $138.6 billion $4.9 billion Charities $199.3 billion Domestic Private Foundations $45.7 billion $? $13.2 billion $9.8 billion $5.6 billion Other Donors Large Corporations Large Estates Other Recipients

Less Than 1 Percent of Filers Reported over 40 percent of Individual Noncash Contributions 46.3 million returns $5,664 billion $138.6 billion $43.6 billion AGI

Corporate Stock and Clothing Accounted for Most of the Value of Non-Cash Donations

Large Organizations, Foundations, and Educational Institutions Received 65 Percent of Non-Cash Donations

Charitable Sector Activity, Tax Year 2011 Donor Recipient Individual Itemizers (Cash) Individual Itemizers (Noncash) $6.0 billion $32.7 billion $138.6 billion $4.9 billion Charities $199.3 billion Domestic Private Foundations $45.7 billion $? $13.2 billion $9.8 billion $5.6 billion Other Donors Large Corporations Large Estates Other Recipients

Less than 2 percent of Estates Contributed Nearly Half of Total Bequest Value 9,447 returns $139.1 billion $15.4 billion Gross Estate

Bequests Were Distributed Broadly for the Smallest Estates

Charitable Bequests to Private Foundations “Crowded Out” other Giving for the Largest Estates

Charitable Bequests to Private Foundations “Crowded Out” other Giving for the Largest Estates

Charitable Sector Activity, Tax Year 2011 Donor Recipient Individual Itemizers (Cash) Individual Itemizers (Noncash) $6.0 billion $32.7 billion $138.6 billion $4.9 billion Charities $199.3 billion Domestic Private Foundations $45.7 billion $? $13.2 billion $9.8 billion $5.6 billion Other Donors Large Corporations Large Estates Other Recipients

Corporations with $2.5 Billion or More in Assets, Less than 4 Percent of Filers, Accounted for over 80% of Contributions 45,816 returns $60,709 billion $18,628 billion $13.2 billion Assets

The Manufacturing Sector Made More than One Third of Total Corporate Contributions

Charitable Sector Activity, Tax Year 2011 Donor Recipient Individual Itemizers (Cash) Individual Itemizers (Noncash) $6.0 billion $32.7 billion $138.6 billion $4.9 billion Charities $199.3 billion Domestic Private Foundations $45.7 billion $? $13.2 billion $9.8 billion $5.6 billion Other Donors Large Corporations Large Estates Other Recipients

Charities with $10 Million or More in Assets, 8 Percent of Filers, Dominated Financial Activity 274,287 returns $3,030 billion $199 billion $132 billion Total Assets

Contributions Accounted for Over Half of Total Contributions and Grants Received by Charities $10 billion $21 billion $169 billion

Charitable Contributions as a Percentage of Revenue Varied Significantly by Type of Organization

The Largest Organizations Received Less than 10% of Their Revenue from Contributions Total Assets

Charitable Sector Activity, Tax Year 2011 Donor Recipient Individual Itemizers (Cash) Individual Itemizers (Noncash) $6.0 billion $32.7 billion $138.6 billion $4.9 billion Charities $199.3 billion Domestic Private Foundations $45.7 billion $? $13.2 billion $9.8 billion $5.6 billion Other Donors Large Corporations Large Estates Other Recipients

The Largest Private Foundations Accounted for 7% of Returns But Nearly 80% of Financial Activity Total Assets

Small Foundations Relied More on Contributions Received as their Main Source of Revenue Total Assets

Conclusions Administrative tax data provide valuable information about many aspects of the charitable sector Filing requirements often exclude many smaller filers from the data, but distributions result in inclusion of large portions of economic activity Opportunities may exist to improve tax data for research purposes Special thanks to Clay Moulton, Statistics of Income, for his invaluable work in designing data visualizations

Contact Information Paul.Arnsberger@irs.gov Cynthia.C.Belmonte@irs.gov Heather.D.Parisi@irs.gov Brian.G.Raub@irs.gov Janette.F.Wilson@irs.gov

Statistics of Income www.irs.gov/taxstats Department of the Treasury Internal Revenue Service Statistics of Income www.irs.gov/taxstats