Philanthropy

Philanthropy’s Data Revolution

October 18, 2017  • Program on Philanthropy and Social Innovation

A few years ago, the Institute’s Program on Philanthropy and Social Innovation set out to revolutionize nonprofit data with a sharp focus on Form 990—the tax form that nonprofits submit to the IRS. The goal was to show how open data could improve the efficiency and creativity of US nonprofits. Now that vision is closer than ever.

Open data means more speed, accuracy, and innovation

Form 990s reveal the workings of the multitrillion-dollar nonprofit industry, comprising over 10 percent of private-sector employment and over 5 percent of GDP. These public forms are chock full of information on the missions, governance, and finances of the organizations that educate our children, care for the elderly, and respond to natural disasters. But until recently, Form 990s were available and sold by the IRS only as nonsearchable images. That inefficient and costly system led PSI’s Nonprofit Data Project to detail the urgent need for “open Form 990 data” in Information for Impact: Liberating Nonprofit Sector Data. Funded by the Bill & Melinda Gates Foundation, the report detailed the benefits of open data, like increased transparency, improved speed and accuracy, reduced fraud, and new opportunities for innovation.

Following Information for Impact, proposals for open Form 990 data were included in former President Barack Obama’s last four budgets, bipartisan tax bills, and a major report to the IRS. Then, in 2016, following a lawsuit by an open-data activist, the IRS released electronically filed nonprofit tax forms in bulk as public, machine-readable data—for free. These electronic documents comprise 60 percent of Form 990s and are now available on Amazon Web Services.

More work remains. Paper-filed 990s are still unavailable as open data, and the full potential of the Amazon files are not yet realized. Still, PSI is moving nonprofit information into the 21st century. Read about its efforts, including a Datathon to clean and publish e-filed  990s, at aspeninstitute.org/psi.