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How do you define a nonprofit’s size?

small, medium, large nesting dolls

Visitors sometimes ask us if there are industry standards for “large”, “medium”, or “small” nonprofits. They often ask in the context of a funder’s eligibility requirements or a released report.

The simple answer: No standardized scale for “nonprofit size” exists. However, some individuals and organizations have their own working definitions. For example:

National Center for Charitable Statistics’ Table Wizard, which uses data from IRS’s Exempt Organizations Business Master File, generates statistical tables based on total assets or revenue, broken into eight categories, with cutoff points at $100K, $250K, $500K, $1M, $5M, $10M, $100M, greater than $100M.

IRS’s Tax Stats area classifies balance sheet and income statement Items for 501(c)(3) organizations by size of total assets, with cutoffs at $100K, $500K, $1M, $10M, $50M, greater than $50M.

The Nonprofit Times published an annual nonprofit salary survey, which it broke into seven sizes based on operating budget, with cutoffs at $500K, $1M, $2.5M, $5M, $10M, $25M, $50M, greater than $50M.  

In response to being asked about nonprofit size several times, Karen Zapp, who helps nonprofits with marketing and communications, proposed a similar five-category scale based on annual gross receipts, with cutoff points at $500K, $10M, $50M, $100M, greater than $100M.

U.S. Small Business Administration (SBA)'s definition of a small business may be the most useful model for nonprofits. SBA’s definition is in terms of the average number of employees over the past 12 months, or average annual receipts over the past three years, but the limits vary by industry.

The SBA’s model is the most complicated set of scales, but it also makes the most sense, considering that the assets, revenue, budget, and/or staff needed to treat and monitor 10 kids with cholera for 10 days will probably be very different from those needed to give 10 kids extra math lessons after school for 10 days.

Why does this info help you become a better grantseeker? Now that you know that no sector/industry standard exists for nonprofit size, if you encounter “large”, “medium”, “small”, or similarly vague terms in funder eligibility guidelines or research reports, dig deeper to find the author’s definitions for these categories. In addition, avoid using them yourself. If you must use them, define them.

Richard Hallman

Richard Hallman
Librarian
Foundation Center Atlanta & Online Librarian team

 

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