Everyone’s arguing about the federal budget
Nobody’s watching this.
U.S. nonprofits handle more revenue than the GDP of the United Kingdom. They are subject to less disclosure than a single publicly traded company.
We processed 4 million IRS 990 filings. The data is public. It’s just that almost nobody looks.
$0T
flows through U.S. nonprofits every year
0M
990 filings processed
0.0M
Registered nonprofits
$0B
To charitable nonprofits
01 / The Money
Where $3 trillion actually goes
$3 trillion flows through U.S. nonprofits every year. That includes hospitals, universities, religious organizations, and charitable nonprofits. The chart below shows how that money moves through the system. From revenue sources to the organizations that spend it.
These aren’t hidden numbers. They come from IRS 990 filings. We processed 4 million of them. The data is public. It’s just that almost nobody looks.
Across all nonprofits, including hospitals and universities, the spending breakdown looks like this. Much of it is operational necessity. But from a donor’s perspective, only 8 cents of every dollar shows up as direct aid and grants. The rest is invisible.
Of the full $3 trillion, roughly $500 billion goes to charitable nonprofits. The ones you think of when you donate. The rest flows through hospitals, universities, and other tax-exempt organizations that operate more like businesses than charities.
Most of this spending isn’t waste. Hospitals need staff. Universities need facilities. Even small charities need people to run programs. The problem isn’t intent. It’s that the reporting system was designed to satisfy the IRS, not to show donors where their money went.
02 / The Reporting Gap
Less disclosure than a single public company
A public company files a 10-K annually, a 10-Q every quarter, and an 8-K whenever something material happens. The SEC requires audited financials, risk disclosures, and executive compensation breakdowns. A large-cap company files within 60 days of its fiscal year end.
A nonprofit files a single Form 990 once a year. It can take 12 to 18 months to appear publicly. It doesn’t require audited financials. GiveWell has noted that the form doesn’t provide sufficient information about what a charity actually does or where it operates. And nonprofits with less than $50,000 in revenue don’t have to file one at all.
Public company (SEC)
- 10-K filed annually
- 10-Q filed every quarter
- 8-K on material events
- Audited financials required
- Filed within 60 days
- Executive comp disclosed
Nonprofit (IRS)
- Single Form 990 per year
- No quarterly reporting
- No material event filing
- No audit requirement
- Appears 12–18 months late
- <$50K exempt from filing
The U.S. has 1.8 million registered nonprofits. Together they handle more revenue than the GDP of the United Kingdom. They are subject to less financial disclosure than a single publicly traded company.
03 / The Trust Crisis
Donors are losing confidence
Of the $500 billion that flows to charitable nonprofits, only $180 billion is categorized as program expenses. That’s 36%. The other $320 billion covers operations, staffing, and overhead. Some of that spending delivers services directly. A social worker’s salary is the program. But donors can’t tell the difference, and the reporting doesn’t help.
64%
36%
Operations & staffing$320B
Program expenses$180B
The consequences are measurable. According to the BBB Wise Giving Alliance donor trust report, 32% of donors trust charities less today than they did five years ago. A Gallup study found that 1 in 3 people worldwide lack confidence in charitable organizations. The top concern donors cite isn’t mission or leadership. It’s how charities spend their money.
0%
Trust charities less
1 in 0
Lack confidence globally
0%
Ended in deficit (2024)
0%
Can pay living wage
Where charitable dollars go
Donor confidence erosion
04 / The Starvation Cycle
Funders cap overhead. Organizations underreport.
The Stanford Social Innovation Review identified a “nonprofit starvation cycle” in which funders cap overhead at 15%, organizations actually spend 31% on administration, and the gap is closed by underreporting or cutting corners.
That concern is justified. In 2024, 36% of surveyed nonprofits ended the year with an operating deficit, the highest rate in a decade of tracking. Only 41% can pay all full-time staff a living wage.
The incentive structure is clear: cap overhead to look responsible, underreport to stay funded, and close the gap by cutting the things donors never see. Maintenance, training, and long-term monitoring.
05 / The Evidence
What happens when nobody checks
When you fund a water well in a remote village, you don’t get information about whether it still works three years later. That’s not hypothetical. A 2017 UK-funded study visited 200 water wells at random in Uganda. 45% were not functional. Only 24% could provide safe and adequate water to the communities they were built for.
Across rural sub-Saharan Africa, roughly 50,000 water supply points have failed, representing between $215 million and $360 million in wasted investment.
0
Wells visited at random
0%
Not functional
0%
Safe & adequate
$0M
Wasted investment
Water well status — Uganda (2017)
The nonprofit starvation cycle
The incentive is to report on the new project, not the maintenance of the last one. So organizations keep building new things, and nobody tracks what happened to the old ones.
06 / The System
Accountability exists. It just isn’t the default.
Form 990s exist. Candid and Charity Navigator do useful work. But the question isn’t whether some nonprofits are transparent. It’s whether the system creates accountability by default. It doesn’t.
Better tracking of outcomes, not just intentions. Financial reporting donors can actually read. A way to follow a dollar from donation to impact. The technology exists. The nonprofit sector just hasn’t had to use it yet.
Outcome Tracking
Follow a dollar from donation to impact. Report on whether the project is working, not just that money was spent.
Real-time, not annual
Readable Financials
Financial reporting that donors can actually understand. Not a 50-page IRS form filed 18 months late.
Donor-facing, not IRS-facing
Continuous Monitoring
Cameras, sensors, satellite imagery. The technology exists. We just haven’t applied it to charity.
Technology already exists
Default Accountability
The question isn’t whether some nonprofits are transparent. It’s whether the system makes accountability automatic.
System-level, not opt-in
07 / The Bottom Line
Three trillion dollars a year
deserves better infrastructure than trust alone.
The data is public. The 990s are filed. The numbers are there. But the system was designed for compliance, not clarity. Donors give because they trust. They stop giving when that trust erodes. And right now, 32% of them already trust less than they did five years ago.
45% of water wells aren’t working. 36% of nonprofits ended last year in deficit. The reporting lag is 18 months. The sector handles $3 trillion. Of the $500 billion that goes to charitable nonprofits, donors can’t trace where $320 billion ends up. And the primary accountability mechanism is a tax form.
We don’t have a generosity problem. We have a visibility problem. The fix isn’t more trust. It’s more signal.
