Methodology

Quarterly Census of Employment and Wages (QCEW)

The data on tax exempt entities under the IRS Section 501c(3) come from the Quarterly Census of Employment and Wages (QCEW), which is administered by state Labor Market Information agencies (e.g., the Department of Labor in New York or Maryland Department of Labor, Licensing, and Regulation) and at the federal level by the Bureau of Labor Statistics (BLS). QCEW is an administrative dataset collected by states as a part of the federal Unemployment Insurance (UI) program and draws on the quarterly surveys of workplaces that state employment security offices have conducted since the 1930s. QCEW accounts for approximately 97%  of all wage and salary civilian employment nationally (however, the program does not cover self-employed and family workers). Under federal law, all nonprofit places of employment with four or more employees are required to participate in the unemployment insurance system. However, 22 states also extend this requirement to places of employment with one or more employees.

 

The principal exclusions from the QCEW dataset vary by state and include employees of religious organizations, railroad workers, small-scale agriculture workers, domestic service workers, crew members on small vessels, state and local government elected officials, and insurance and real estate agents who receive payment solely by commission. However, QCEW data encompass approximately 97% of nonfarm employment—providing a virtual census of employees and their wages as well as the most complete universe of employment and wage data, by industry, at the State, regional, and county levels. In terms of nonprofit employment, the exclusion of religious organizations as well as entities with less than four employees is the most significant; however, religious organizations may elect to be covered by the unemployment insurance program and those that do are covered in the data. At this time the exact number of employees in tax-exempt establishments not covered by QCEW is not known, but we estimate it to be no more than 3% of total employment in the nonprofit sector.

Finding Nonprofits in the QCEW

While nonprofit places of employment have long been covered by the QCEW surveys, the data generated by these surveys have never broken out the nonprofit employment separate from the for-profit employment. As a consequence, the nonprofit sector has essentially been buried in the data. The Johns Hopkins Center for Civil Society Studies’ Nonprofit Economic Data Project developed a methodology of identifying nonprofit employers in the QCEW microdata by record matching with the publicly available register of tax exempt entities maintained by the Internal Revenue Service (IRS). The nonprofit microdata were subsequently aggregated by county and fields of activity to meet the federal disclosure rules, mandated by law to protect the confidentiality of company specific information. The result is the most accurate and up-to-date picture of nonprofit employment yet available.

 

In 2014, BLS started releasing nonprofit data at the national, state, county, and, in 2018, Metro Statistical Area (MSA) levels following a similar methodology of record matching. However, BLS improved that methodology by adding organizations called “reimbursables” that were not included in the IRS business register. Reimbursables are organizations that under state unemployment laws are not required to pay unemployment insurance contributions each quarter, but rather are allowed to reimburse the unemployment insurance system when a claim is made. Most states will restrict such units to 501(c)3 nonprofits. The QCEW microdata include information on reimbursables. More information, including the full downloadable data tables for 2013-2022, is available here.

 

The data available on this website combine the sets assembled by the JHU researchers with those produced by the BLS. Specifically, the national- and state- level aggregates by industry between years 2007-2012 and national-, state-, county-, and MSA-level aggregates for 2013-2022 have been produced by the BLS, whereas all the remaining aggregates were produced by the Center for Civil Society Studies.

The primary limitation of the nonprofit employment and wage data come from the federally mandated disclosure rules that require suppression of statistical information that allows the identification of single institutional units. This suppression is applied at the industry level. In practice, this suppression can take two forms. First, the so-called “primary suppression” is applied when aggregates contain fewer than 3 units or when a single unit exceeds 80 percent of the aggregate total. Due to the large number of nonprofit aggregates on this website, the primary suppression rules that guided the data assembly by JHU researchers are somewhat stricter and require at least 10 units per aggregate and maximum 75% of the aggregate total per single unit. Second, the so-called “secondary suppression” must be applied if the value of the non-disclosable aggregate can be calculated from the disclosed values (e.g. by subtraction); when this is the case, the disclosure of additional aggregates must also be suppressed to eliminate this possibility.

 

The second limitation that applies to the nonprofit data arises from the fact that access to microdata is restricted in some states. As a result, the JHU research team could only produce aggregates for the following five states: Massachusetts, Mississippi, New Hampshire, Oregon, and Wyoming. The data for these states covering years 2007-2011 are therefore available only from the 2014 BLS data release that does not include county-level breakdowns of these data. As a result of this limitation, national-level data for years prior to 2007 are not available.