February 3, 2005 | Read Time: 2 minutes
Charitable spending by foundations fell in 2001 for the first time in at least 16 years, according to a new report from the Internal Revenue Service.
In 2001, 70,787 private foundations spent a total of $27.4-billion on grants and other charitable activities, a 0.7-percent decrease over the previous year’s expenditures. In 2000, 66,738 foundations spent a total of $27.6-billion. The decline in 2001 is the first since the IRS began keeping track in 1985, said a spokesman for the tax agency. According to the IRS, foundations’ charitable spending increased by 21 percent from 1999 to 2000 and by 17 percent from 1998 to 1999.
The reduction in foundation expenditures in 2001 followed the stock-market decline that began in 2000, which reduced the value of many assets held by foundations. Over all, foundations’ assets fell to $455.4-trillion in 2001 from $471.7-trillion in 2000, a drop of 3.4 percent.
Meanwhile, another new IRS report shows that the number of charities that filed Form 990 and Form 990-EZ informational tax returns with the federal government rose from 230,159 in 2000 to 240,569 in 2001, an increase of 4.5 percent. The number of charities filing returns increased 8.8 percent from 1999 to 2000 and 2.1 percent from 1998 to 1999.
The IRS noted that another 472,719 active charities did not file returns in 2001. Many groups are exempt from the filing requirement, including churches and other religious organizations, as well as nonprofit groups with annual gross receipts totaling less than $25,000. (The new IRS figures do not count private foundations, which file Form 990-PF returns.)
Total revenue reported to the IRS by charities on their tax returns was $897-billion in 2001, an increase of 3.6 percent from $866.2-billion reported the previous year. Total assets of charities were $1.63-trillion in 2001, or 4.4 percent greater than the $1.56-trillion reported in 2000.
Total liabilities of charities were $611.4-billion in 2001, an increase of 13.4 percent from the $539.4-billion reported in 2000.
The Internal Revenue Service reports on foundations and charities appear in the agency’s Statistics of Income Bulletin for fall 2004. Copies of the reports may be obtained online at http://www.irs.gov/taxstats/article/0,,id=133785,00.html. Copies of the bulletin may be purchased for $39 from the Superintendent of Documents, U.S. Government Printing Office, P.O. Box 371954, Pittsburgh, Pa. 15250-7954.
