In 2010, there were 1.5 million tax-exempt organizations in the United States with $1.51 trillion in revenues. Through the Form 990 in its several varieties, the Internal Revenue Service (IRS) gathers a large amount of information about tax-exempt organizations. Like other important data collected by governments, information contained in the 990s could potentially be far more useful if it were not only public but “open” data that are available to all, free of charge, in a standard format, published without proprietary conditions, and available online as a bulk download rather than only through single-entry lookup. This report was designed to address whether and how making the Form 990 data truly open in this sense would not only make it easier to use for the organizations that already process it, but would also make it useful to researchers, advocates, entrepreneurs, technologists, and nonprofits that do not have the resources to use the data in its current form.
We argue in this paper that open 990 data may increase transparency for nonprofit organizations, making it easier for state and federal authorities to detect fraud, spur innovation in the nonprofit sector and, above all, help us to understand the potential value of the 990 data. However, as also is the case for the 990s, “liberating” government data from paper-based technologies and processes is neither straightforward nor free. While myriad benefits may justify the costs, there is a need for practical strategies to overcome technical, political, and cultural impediments. In addition to exploring the costs and benefits of strategies for achieving open 990 data, the paper focused on how to build a community willing to examine the quality of 990 data and build innovative tools to create a better understanding of the nonprofit sector than we currently have and that we so desperately need.
As a result in part of the work done in collaboration with and under the auspices of the Aspen Institute to make the case for opening up IRS-held data about the nonprofit sector and to explain why this could be transformative, the IRS issued a statement on June 30, 2015 that: “The IRS has made substantial progress in developing a technology solution that, when perfected, will allow the IRS to provide electronically-filed Forms 990 in a machine-readable format. This solution will ensure that sensitive or personally identifiable information continues to be protected from public distribution. The IRS expects that this technology solution should be in place in early 2016.”