Resource Guide for Non-Profits: Problems with Non-Profit Research

UNLIKE PUBLICLY TRADED CORPATIONS there are many things which you can NOT get your hands on when trying to research any NON-PROFIT organization!

1. There simply are less journal articles & less trade magazine articles published about Non-Profits than the number of articles published about For-Profits.  There are well over 10,000 reputable academic journals & trade magazines in English that focus primarily on research about For-Profit businesses, and less than 100 comparable scholarly publications that primarily focus on research about Non-Profits.  That is a ratio of 100 to 1 -- How do you like those odds?
2. There are over 1,000 subscription based online providers of corporate research data & analysis of publicly traded firms in the USA, versus only 3 such subscription based online providers of researchers looking at Non-Profits.  That is a ratio of 333 to 1 -- How do you like those odds?  Here are those 3 wranglers of non-profit research:
   • GUIDESTAR (sometimes referred to by their parent organization's name, Candid.Org )
   • CHARITY NAVIGATOR (website = CharityNavigator.Org )
   • NONPROFIT EXPLORER BY PROPUBLICA (website = Projects.Propublica.Org/nonprofits/ )
3. Accounting systems are not comparable since there is no shareholder's equity with Non-Profits and there is a very different set of Generally Accepted Accounting Principles (GAAP) because of the presence of Endowment Funds and Annuities.
4. There is no mandatory public access to any Quarterly report about Non-Profits.  That means you only have access to annual data of income / expenses / cash flow / capital outlays / assets / liabilities for Non-Profits.  This therefore leads to a total absence of independently produced quarterly analytical reports that research Non-Profits.  Furthermore, except for special situations regarding political campaigns & lobbying organizations, Non-Profits do NOT have to final any quarterly reports with the IRS, other than ordinary reports about wages, but only if they have any employees.  Sadly, those quarterly reports about wages and payroll deductions are NEVER publicly available for any employer, not even for publicly traded firms!
5. Annual reports are filed with the Internal Revenue Service, rather than the SEC, and the IRS asks very different questions within the annual filings, compared to what publicly traded firms are tasked with answering on an annual basis.
6. For roughly 80% of all Non-Profits, there is virtually no meaningful financial data available because small sized organizations do not have to show precise dollar amounts.  In fact much of financial data that is reported to the IRS is reduced to only Yes/No responses rather than quantitative data.
7. There is no requirement for those small sized Non-Profits to have their financial statements audited by outsiders.
8. Non-Profits are given a longer time frame before the deadline for filing annual reports with the IRS (5.5 months after fiscal year).
9. IRS takes its time before they grant public access to their copies of the annual reports on Form 990, while the SEC provides instantaneous online access for financial reports filed by publicly traded firms.
10. There is no requirement for Non-Profits to file publicly available documents detailing any changes of directors or senior officers, while publicly traded firms are required to quickly report those types of executive & board changes to the SEC.
11. Although both types of organizations are required to hold annual meetings of Members or Shareholders, again, there is no requirement for Non-Profits to quickly & freely distribute the results of any votes cast at their annual meetings, while the SEC has stiff penalties for publicly traded firms that do not report those changes accurately & promptly.
12. There is no federal nor IRS requirement that Non-Profits have to make their membership lists available to the public to view.  Even members do not have an inherent legal right to view membership rosters.  Furthermore, some non-profits have a legal structure where no person is a member -- these are typically organized as Foundations.
13. There is no federal nor IRS requirement that Non-Profits have to make their list of donors available to the public, other than special situations regarding political campaigns or certain types of lobbying groups.
14. When large sized Non-Profits are required to answer the questions on a Form 990, they are not required to use electronic filings, and in fact, they are allowed to submit handwritten responses.  This can greatly delay the turnaround time by the IRS in processing incoming 990 forms.  While publicly traded companies are required to electronically file nearly all of their mandatory documents promptly with the SEC in electronic formats.  And all of the SEC documents are instantly made available to the public over the Internet.
15. Most Non-Profits are essentially invisible on most types of traditional media & on social media.  Since more than 80% of Non-Profits have very little annual revenues, very little expenses, and seldom have any employees, they are for the most part "sliding under the radar" of local, regional & national media outlets.  It can often be impossible to locate any newspaper articles, weblogs, video blogs or websites mentioning a small sized non-profit.
16. The majority of these small sized Non-Profits are run by volunteer officers & volunteer board members.  Their self appointed tasks are clearly not achieving top priority of every volunteer's time and energy throughout the year.  Unlike publicly traded companies, there is no professional back up if a volunteer does not promptly or accurately file a mandatory report with the IRS, or if they do not create eye catching graphics when posting a promotional event to public media.  This lack of various professional skillsets only adds to their invisibility both at the local level, and when conducting research thru online resources.