Methodology

The data on tax exempt entities under the IRS Section 501c(3) come from the Quarterly Census of Employment and Wages (QCEW), which is administered by state Labor Market Information agencies (e.g., the Department of Labor in New York) and the Bureau of Labor Statistics. QCEW is an administrative dataset collected by states as a part of the federal Unemployment Insurance (UI) program. QCEW draws on the quarterly surveys of workplaces that state employment security offices have conducted since the 1930s and accounts for approximately 98 percent of all wage and salary civilian employment nationally (the program does not cover self-employed and family workers). Under federal law, all nonprofit places of employment with four or more employees are required to participate in the unemployment insurance system. However, 22 states extend this requirement to places of employment with one or more employees.

The principal exclusions from the QCEW dataset vary by state and include employees of religious organizations, railroad workers, small-scale agriculture workers, domestic service workers, crew members on small vessels, state and local government elected officials, and insurance and real estate agents who receive payment solely by commission. QCEW data encompass approximately 97 percent of nonfarm employment, providing a virtual census of employees and their wages as well as the most complete universe of employment and wage data, by industry, at the State, regional and county levels. In terms of nonprofit employment, the exclusion of religious organizations as well as entities with less than four employees is the most significant; however, religious organizations may elect to be covered by the unemployment insurance program and those that do are covered in the data. At this time the exact number of employees in tax-exempt establishments not covered by QCEW is not known, but we estimate it to be no more than 3 percent of total employment in the nonprofit sector in New York.

While nonprofit places of employment have long been covered by the QCEW surveys, the data generated by these surveys have never broken out the nonprofit employment separate from the for-profit employment. As a consequence, the nonprofit sector has essentially been buried in the data. The JHU Center for Civil Society Studies has developed a methodology of identifying nonprofit employers in the QCEW micro-data by record matching with the publicly available register of tax exempt entities maintained by the Internal Revenue Service (IRS). The nonprofit micro-data were subsequently aggregated by county and fields of activity to meet the federal disclosure rules, mandated by law to protect the confidentiality of company specific information. The result is the most accurate and up-to-date picture of nonprofit employment yet available.

In 2014, BLS started releasing nonprofit data at the national and state level but not the county level, following a similar methodology of record matching. However, BLS improved that methodology by adding organizations called “reimbursables” that were not included in the IRS business register. Reimbursables are organizations that under state unemployment laws are not required to pay unemployment insurance contributions each quarter, but rather are allowed to reimburse the unemployment insurance system when a claim is made. Most states will restrict such units to 501(c)3 nonprofits. The QCEW micro data include information on reimbursables. More information is available here.

The data available on this website combine the sets assembled by the JHU researchers with those produced by the BLS. Specifically, the national- and state- level aggregates by industry between years 2007 and 2012 have been produced by the BLS whereas all the remaining aggregates have been produced by JHU/CCSS.