Adapted from the website of the National Center for Charitable Statistics.

In late 1998, researchers and representatives from the Research Council of the Association of Fundraising Professionals gathered to discuss the gaps in understanding of nonprofit fundraising and administrative cost reporting.

The Center on Philanthropy at Indiana University and the Center on Nonprofits and Philanthropy at the Urban Institute carried out a broad research project aimed at increased understanding of the issues surrounding overhead costs and informing the nonprofit sector and policymakers.

The project includes four types of data collection.

The first type uses data reported annually by more than 250,000 501(c)(3) public charities on their IRS Form 990 and collected by the National Center for Charitable Statistics. Data on the Forms 990 includes financial information such as the total contributed income, fundraising expenses, and special event revenue and expenses.

The second type gathered responses from 1,500 nonprofit organizations through a survey documenting the accounting practices and the details of their fundraising and administrative expenses.

For the third type, the researchers conducted nine in-depth case studies of representative organizations in order to better understand the dynamics of and thinking about overhead costs and cost accounting in nonprofits.

The final data collection type included the survey responses of 50 professional nonprofit accountants and auditors. The results show their current and future role in accurate cost accounting and reporting.