How many 501(c)(3) organizations have 501(c)(4) affiliates and are they created for advocacy purposes? (FAQ)

Part VII of Schedule A of the Form 990 and 990-EZ collects a variety of information on transactions and

relationships with "noncharitable exempt organizations" such as 501(c)(4) organizations. However, this data is not

collected on any of the available databases of nonprofit organization data.

NCCS is aware of no comprehensive research providing a quantitative answer to the question. The OMB Watch-Tufts

University study of nonprofit advocacy activities provides the most comprehensive look at the subject. However,

none of the publicly available research from the study appears to deal with this issue. (See


A review of IRS Forms 990 from 30 randomly selected organizations found that 30 of the 31 either explicitly marked

"no" or "n/a" to the questions about affiliated exempt organizations. Of these, seven simply left the page or

question 52 blank. Given the small size of those leaving the page blank (the largest had a total revenue of

$684,000), we expect that these organizations do NOT have affiliates.

The only organization reporting affiliated organizations in this small sample was a workers' compensation trust

that reported South Providence Realty Corp. and the Hospital Properties, Inc. as sharing common parents. It is

highly unlikely that the affiliated organizations are intended as the "advocacy" arms for the 501(c)(3)


A sample of this size provides a confidence interval of +/-18% at a 95% level of confidence. Thus, we can say with

a high degree of confidence that the percentage of public charities with related exempt organizations is almost

certainly less than 21% (1 out of 31 organizations = 3%. 3% + 18% = 21%) and seems likely to be much smaller.

One should keep in mind that this sample was randomly selected from ALL public charities filing IRS Form 990s or

990-EZs; a sample drawn only from larger organizations might well yield a higher percentage of related

organizations, as we find when we look at taxable subsidiaries and organizational complexity in general.


Added 09/03/2002 by tpollak, Modified 04/07/2010 by asblackwood


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