Previous studies have suggested that U.S. Internal Revenue Service data missed 80 to 90 percent of smaller, grassroots associations. From an economic perspective, given the small scale of these nonprofits, the impact of the omission was considered marginal. However, some argued that the omission presented a distorted view of the nonprofit sector.

But according to a new study, small nonprofits – such as barbershop quartets, Alcoholics Anonymous groups, folk dance societies, and...

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