Nonprofit Organization and Program Classifications - DOC by legalstuff1


Obtaining meaningful information about a group of organizations so diverse yet so vital
to society becomes impossible without a classification system that groups similar entities
by purpose, type, or major function.

Created in the early 1980s, the National Taxonomy of Exempt Entities (NTEE)
provides the definitive classification system for nonprofit organizations recognized as tax
exempt under the Internal Revenue Code. The broad range of their activities includes
health, human services, arts and culture, education, research, and advocacy. The use of
NTEE is key to illuminating the diversity of the nonprofit sector.

NTEE is a hierarchical system so that its more than 600 unique categories can be “rolled
up” into varying summary categories, depending on the needs of the researcher or user.
This approach provides maximum flexibility for both the user needing great detail and for
those who want only a rough statistical portrait of the sector.

We have found that having a strong suite of tools is critical for accurate assignment of
codes and for use of the classification system by researchers and policymakers. To that
end, we have developed a range of tools:
    EON (Exempt Organizations NTEEs) provides an easy-to-use web-based interface
       that displays a wide range of information for expert classifiers. It also provides
       “single click” links to the NTEE Search tool, a Google search, and Form 990
       images for each organization. More than 100,000 organizations have been
       reviewed by NCCS and other researchers using this tool.
    The NCCS NTEE Rules System is a sophisticated web-based tool used for
       automatically assigning NTEE codes. This system incorporates more than 1,500
       rules containing tens of thousands of words and “stopwords” (to prevent
       organizations from being classified in categories where they don’t belong). Using
       a combination of EON and the Rules System, we have classified virtually all of
       the more than two million organizations in our database.
    The NTEE Search Tool provides a Google-like web-based tool for searching our
       detailed NTEE definitions and keywords. These definitions include information
       on types of organizations to include and exclude, examples and “scope notes.” A
       user can click on a code to see the largest organizations in the category and a
       sample of smaller ones. Search terms are automatically highlighted in red so
       users quickly see the connection between their search term and the category.

NTEE codes are used by major national organizations, as well as numerous state and
local researchers to organize data on the sector:
     The IRS adds a NTEE code to each new nonprofit organization. This code is
        included in the IRS Business Master File, the registry of active organizations.
      The IRS Statistics of Income Division (SOI) Exempt Organizations Sample Files,
       especially useful for analysis of large organizations, include NTEEs as the code
       for distinguishing the different types of organizations.
      The Foundation Center uses NTEE codes both to classify the grants given by
       foundations as well as to classify the recipient organizations.
      GuideStar includes the NTEE codes in its publicly available nonprofit reports.
      NCCS uses them throughout its DataWeb system, in its Nonprofit Almanac and in
       most publications.

In addition to the NTEE system, NCCS has developed the Nonprofit Program
Classification System (NPC) to provide a parallel taxonomy for classifying the
programs of nonprofit organizations. The major groups for this taxonomy are the same as
the major groups for the NTEE system, but the specific codes tend to be more narrowly

We have tools for working with NPC codes that are similar to the tools available for
using NTEEs. (The NTEE descriptive information, however, is much richer since this
system dates back many more years.)

Both the NTEE and NPC systems also provide coding systems for classifying programs
and organizations by the population that they serve.

To top