The Number of Nonprofits Continue To Grow

In my book, Cardinal Principles of Governance, published in 2007, I pointed out that the number of nonprofit organizations in the United States was growing exponentially. Nonprofit organizations in the U.S. include burial societies, farmer's Granger's and the Greenbay Packers. An article that appeared on the front page of the Sunday New York Times points out that charitable organizations, the section of the nonprofit sector that solicits donations, grew by more than 60% in the past decade. There are now 1.1 million charitable organizations in the U.S. Of those organizations seeking tax-exempt status and a 501 (C)(3) status, which allows them to accept donations, 99% of them were approved. The IRS defines public charities as organizations that are "religious, educational, charitable, scientific, literary, testing for public safety, to foster national or international amateur sports competition or prevention of cruelty to animals." Approximately $300 billion was donated to charities last year. The IRS estimates that these charities cost the government $50 billion dollars. Given the importance of the public charity sector of the nonprofit world, the question that needs to be addressed is whether the other kinds of nonprofits such as chambers of commerce, the National Rifle Association, private golf clubs, etc. as well as some of those named above should continue to be given tax exemption. Where are the state and federal regulators? Perhaps they are experiencing difficulty trying to stay on top of their case load.