3 data sites to help benchmark your revenues

In our consulting practice, we like to help our clients understand how they stack up against colleague organizations – a practice known as benchmarking.

A frequently requested subject for benchmarking is an organization’s revenue profile.

Finding good revenue data on other nonprofits can be a real challenge. It can be frustrating as well as it’s not always possible to compare apples to apples given the differences in reporting and interpretation of data.

The only really good way to get the level of data you might be looking for is to call a colleague at another organization and ask if they’ll share detailed information about their revenue streams – if they have it. Not everyone may be willing to do that. But we’ve found that many in our sector can be quite generous in their willingness to help a colleague – especially if they don’t feel that sharing the information threatens their vitality  or if you are ready to exchange your own information with them.

Before you start making those phone calls, however, it is a good idea to start your search by looking for data that is already readily available to you. This can help you narrow your focus to the most useful organizations. And, should you decide to call, you’ll already have done some homework and can ask more informed questions.

Here are three public places to start looking for information:

1.       Form 990. The form 990 is the annual reporting form many US tax-exempt organizations must file with the Internal Revenue Service. It includes financial, mission, program and governance information.

Where to find it:  You can find the most recently filed 990 for an organization you are interested in at Guidestar.org. To review the 990 there, you will have to create an account with them (registration is free). Hopefully you are already very familiar with Guidestar because you are keeping your own organization’s information up to date.  If for some reason you don’t want to register, an alternative site is the Foundation Center’s 990 Finder, which doesn’t require registration to use.  (There are other places to find 990s, but I find these two particularly handy).

What’s available: If you are investigating revenues in the 990, you’ll want to look in a few places. The first page of the 990 lists total revenue broken into the big functional categories. You can find more useful revenue breakdowns deeper in the form in Part VIII: Statement of Revenue. There you’ll  find breakouts of contributions, program service and other revenues, such as what the organization receives  in membership dues, from federated campaigns or types of fee for service income. If you scroll through the 990 to Schedule G, you can find more detailed information about fundraising events and other revenues such as gaming income.  There are lots of other goodies in the 990, but this should get you started.

Limitations: Though the 990 establishes particular categories for reporting, not every organization observes them in filling out the form. And for areas where there is wide discretion in breaking out the numbers, like the program services category, you may find similar types of organizations classify their income in totally different categories. Unfortunately, you can’t find out from the 990 how much was received in grants vs contributions from individuals or corporations.

2.    Audited Financial Statements. Organizations of a certain size may be required by state or federal regulations to obtain an annual financial audit that reports their financial condition according to a common set of standards by the Financial Standards Accounting Board.

Where to find it: You may or may not be able to find these online for the organization you are looking for. One place to start is to look on the organization’s own web site to see if they share their audited financial statements. More and more organizations, in the spirit of full transparency, are making this information available to the public.

If you can’t find the audit there, it might be available through a state database. Many states require organizations that solicit for funds in that state or receive state funding to register and file certain documents with the state. Those documents usually include the audit and the 990, among others. For example, you can find New York’s database at http://www.charitiesnys.com/RegistrySearch/search_charities.jsp. Massachusetts can be found at http://www.charities.ago.state.ma.us/. You may need to scroll deep within the filing to find the audit if all the materials are assembled in one file. (And be prepared to download new software as there does not seem to be a convention on what’s needed to read these documents.)

Information available: The audited financial statements may provide an entirely different look at revenues from the 990. Look for the Statement of Activities. On it you’ll find that some organizations will break out giving from individuals, from corporations or from grants. Remember to look through the notes as you may find additional helpful information there as well.

Limitations: Again, you are dependent on how that particular auditor and organization decides to break out their revenues. Also, not all organizations have to register for charitable solicitation and not all registered organizations will meet the threshold for an audit.

3.  Aggregated data. You may find it helpful to see how you stack up on average against a number of organizations in your industry category, income range or state. In this case, you’ll find the Table Wizard at the Urban Institute’s National Center for Charitable Statistics is a handy tool. http://nccsweb.urban.org/tablewiz/bmf.php

Information available: You can find aggregated information on revenue sources, asset levels and revenue levels for US nonprofits. The data is compiled from 990s. You can break that data by state and you can also look more specifically at categories of organizations like health, the environment, etc. You can even break those broad categories into more specific ones such as Environment: land resources conservation.

I urge you to play with the tool to get familiar with the types of information you can find. For example, you could look at 501(c)3 public charities, by revenue source, by expense level, by category arts culture and humanities and by the state of Wyoming.  Or, you might be wondering just how many other organizations in your state are at your same revenue or asset size or larger.  Have fun, play with the wizard.

Limitations: For now, the Table Wizard doesn’t break out revenues beyond the five general categories of contributions, gifts and grants; program service revenues; net special events; investment income; and dues, net sales and other income. And the NTEE codes may not be used in the same way by the types of organizations you are looking for. But this can give you a rough estimate of what’s happening in your sector across these broad categories.

What do you use to benchmark revenues?

Please share other tools and helpful sites that you use to find revenue data for benchmarking.  For example, there may be a very specific database compiled just for your sector, like the database of the Cultural Data Project for arts and cultural organizations. Years ago when I was Director of Development at an international child sponsorship organization, a number of the similar organizations arranged with a third party to serve as the compiler of data they were interested in benchmarking against.