Overview and Sampling

The data are based on a sample of 1994 Forms 990, Return of Organization Exempt from
Income Tax, and Forms 990-EZ, Short Form Return of Organization Exempt from Income
Tax.  Organizations used the 1994 forms when their accounting periods ended during the
time period December 31, 1994, through November 30, 1995.  The sample did not
include private foundations, which were required to file on a separate return form.  Most
churches and other religious organizations were also excluded from the sample because
they were not required to file a Form 990 or a Form 990-EZ.  However, some of these
organizations filed returns voluntarily.  The sample included only those returns with
receipts of more than $25,000, the filing threshold.

     The sample design was split into two parts:  the first part included returns of
organizations exempt under section 501(c)(3), and the second part included organizations
exempt under sections 501(c)(4) through (9).  Returns of organizations exempt under
other sections were not included in the study.  Each part of the sample was classified into 
strata based on size of total assets, with each stratum sampled at a different rate.  For
section 501(c)(3) organizations, a sample of 11,131  returns was selected from a
population of 176,621.  Sampling rates ranged from 0.5 percent for small asset classes to
100 percent for organizations with assets of $10,000,000 or more.  For organizations
filing under sections 501(c)(4) through (9), a sample of 8,526 returns was selected from a
population of 104,140.  Sampling rates ranged from 0.2 percent for the small asset classes
to 100 percent for organizations with assets of $10,000,000 or more. 

     The populations for these organizations included some returns of terminated
organizations, returns of inactive organizations, duplicate returns, and returns of
organizations filed prior to 1994.  These returns were not included in the samples, nor in
the estimated population counts.  For a small number of large organizations whose returns
for the 1994 Reporting Year were unavailable for the statistics, data were estimated using
prior-year returns.

     The data were obtained from returns as originally filed with the Internal Revenue
Service.  They were subjected to comprehensive testing and correction procedures in
order to improve statistical reliability and validity.  However, in most cases, changes
made to the original return as a result of either administrative processing or taxpayer
amendment were not incorporated into the data base.