By Noelle Barton in Chronicle of Philanthropy
The number of charities and foundations registered with the Internal Revenue Service fell by 16 percent in 2011, mostly because more than 272,000 organizations lost their tax-exempt status after failing to follow the law by filing informational tax forms.
New figures released by the tax agency show that the number of groups classified under Section 501(c)(3) of the Internal Revenue Code totaled nearly 1.1 million in 2011, down from nearly 1.3 million in 2010.
Even without the IRS’s action to strip so many groups of tax-exempt status, however, the latest figures signal a continued slowing in the number of charities created in the United States.
The tax agency said 55,319 groups applied for charity status in 2011, down 7.7 percent from 2010 and 35 percent from 2007, when 85,771 groups applied.
The drop followed years of rapid growth. The number of charities more than doubled from 1995 to 2010, increasing from 626,000 to nearly 1.3 million. From 2001 to 2010, the number of charities grew by more than 48 percent, from 865,096.