My earlier analysis of Chicago’s nonprofit formation data looked at where organizations are forming — four geographic clusters, each with a distinct formation pattern. But the IRS Exempt Organizations data contains a second layer of information that I haven’t addressed yet: what kinds of organizations are forming.
Every organization in the IRS database carries an NTEE code — a National Taxonomy of Exempt Entities classification that identifies its primary mission area. Of the 4,212 nonprofits formed in Chicago between 2021 and 2025, 4,088 have NTEE codes — a 97% completion rate that makes this a reliable basis for analysis.
What the subsector data reveals is a city whose nonprofit formation activity is being pulled in very different directions at the same time. Some mission areas are forming at extraordinary rates. One major sector is in structural decline — during the precise moment when its underlying need is most acute. And a surge of formation activity that many in the sector attributed to a permanent shift has already reversed course.
Here is what the data actually shows.
A note on what this data measures. NTEE codes are assigned by organizations themselves when they apply for tax-exempt status, and sometimes updated by the IRS. They classify the primary mission area of an organization, not its full scope of work. Like any self-reported classification system, they are imperfect. What follows is an analysis of formation patterns within those categories, not a census of activity in each sector.
The Surge Sectors
Youth Development: 9.84x Its Own Historical Pace
The single most striking finding in the subsector data is the velocity of Youth Development (NTEE code O).
Before 2000, Chicago had accumulated 25 youth development nonprofits in the IRS database across its entire history. Between 2021 and 2025 alone, 246 new youth development organizations received tax-exempt status — nearly 10 times the pre-2000 baseline in just four years.
The decade-by-decade progression makes clear this isn’t a sudden spike: 44 formations in the 2000s, 196 in the 2010s, and 246 in just the first five years of the 2020s. The acceleration has been building for twenty years, but the current pace represents a genuine step change from even the previous decade.
Geographically, Youth Development is concentrated on the South Side. The South Side cluster produced 91 Youth Development organizations between 2021 and 2025 — more than double the Professional Corridor’s 40. It is the South Side’s second most active formation subsector after Human Services.
Year-over-year, Youth Development grew from 31 formations in 2021 to 64 in 2025, with a notable acceleration in 2024 (67) suggesting continued momentum.
Food, Agriculture & Nutrition: 8.22x
Food and Nutrition (NTEE code K) shows the second-highest velocity of any subsector at 8.22x its pre-2000 baseline. Only 9 food-related nonprofits formed before 2000 appear in Chicago’s IRS data. Between 2021 and 2025, 74 new organizations in this category received tax-exempt status.
The decade pattern here is important context. The 2000s actually produced fewer formations (5) than the pre-2000 baseline suggested — food and nutrition organizing was essentially dormant as a formal sector. Then: 51 formations in the 2010s, and 74 in just the 2021–2025 period. The formalization of food-related organizing in Chicago is a recent and accelerating phenomenon.
The South Side leads with 33 formations in this category; the Professional Corridor produced 10; the North Side 17. The West Side, notably, produced only 6 — low relative to community food security need, though again the data cannot tell us why.
Mental Health & Crisis Intervention: 4.52x
Mental Health (NTEE code F) produced 122 formations between 2021 and 2025 against a pre-2000 baseline of 27 — a velocity of 4.52x. The year-over-year pattern is notable: only 6 formations in 2018, rising to 13 in 2020, jumping to 22 in 2021, and continuing at 19–32 per year through 2025.
The 2020–2021 inflection is visible in the data. Whether that reflects pandemic-related demand, the expansion of telehealth creating new organizational models, or the broader post-2020 cultural shift in mental health awareness is not something the formation data can determine. What it shows is that formal organizational response to mental health need was minimal before 2020 and has been elevated since.
Mental Health formations are roughly evenly distributed across the North Side (34), South Side (34), Professional Corridor (22), and West Side (16) — more geographically dispersed than most other high-growth subsectors.
Recreation & Sports: 5.53x
Recreation & Sports (NTEE code N) at 5.53x velocity may seem surprising — 210 formations against a pre-2000 baseline of 38. Year-over-year growth is clear: 16 formations in 2021 rising to 57–58 in 2024–2025.
The North Side produced 80 of these 210 formations — by far the highest cluster share, and the subsector where the North Side most clearly leads the city. The South Side produced 41, the Professional Corridor 25, and the West Side 28.
The Volume Story: Human Services
Velocity ratios measure momentum relative to history. Volume measures what is actually happening right now.
By volume, Human Services (NTEE code P) is the dominant formation story in Chicago — and it isn’t close.
Human Services produced 654 new organizations between 2021 and 2025, the highest absolute count of any subsector. More notable is the trajectory:
| Year | Human Services Formations |
|---|---|
| 2019 | 62 |
| 2020 | 78 |
| 2021 | 88 |
| 2022 | 102 |
| 2023 | 122 |
| 2024 | 166 |
| 2025 | 176 |
This is unbroken, accelerating growth across six consecutive years. No other subsector shows this pattern. Human Services went from 62 formations in 2019 to 176 in 2025 — nearly tripling in six years without a single year of decline.
Geographically, Human Services is the dominant subsector in three of the four clusters. The South Side leads with 232 formations. The Professional Corridor produced 96. The North Side 110. And the West Side, despite having only 7 ZIP codes compared to the North Side’s 17, produced 123 Human Services formations — a per-ZIP concentration that is among the highest in the city.
The Cluster Signatures
When you look at which subsectors define each geographic cluster, distinct identities emerge from the data.
The Professional Corridor is defined by Philanthropy and Grantmaking. This cluster produced 184 Philanthropy/Grantmaking organizations (NTEE code T) between 2021 and 2025 — more than the South Side (32), West Side (16), and North Side (66) combined. These are fiscal sponsors, private foundations, donor advised fund vehicles, and grantmaking organizations. They account for a significant share of the Professional Corridor’s high absolute formation count and reflect the concentration of wealth management, finance, and legal infrastructure in the downtown ZIP codes.
The South Side is defined by Human Services and Youth Development. 232 Human Services formations and 91 Youth Development formations — both the highest counts of any cluster in their respective subsectors.
The North Side is defined by Arts, Culture & Humanities. With 215 Arts formations between 2021 and 2025, the North Side is the leading cluster for this subsector by a significant margin — more than double the Professional Corridor’s 93, and more than any other cluster.
The West Side is defined by the concentration of its Human Services formation relative to its geographic footprint. With only 7 ZIP codes, the West Side produced 123 Human Services formations — a per-ZIP rate that rivals or exceeds the larger clusters.
| Subsector | Prof Corridor | South Side | West Side | North Side |
|---|---|---|---|---|
| Human Services | 96 | 232 | 123 | 110 |
| Education | 133 | 156 | 54 | 147 |
| Arts, Culture & Humanities | 93 | 104 | 61 | 215 |
| Community Improvement | 73 | 110 | 62 | 43 |
| Philanthropy / Grantmaking | 184 | 32 | 16 | 66 |
| Religion-Related | 28 | 66 | 45 | 109 |
| Youth Development | 40 | 91 | 42 | 26 |
| Recreation & Sports | 25 | 41 | 28 | 80 |
The Decline Stories
Housing & Shelter: The Only Sector Below Its Own Historical Baseline
Housing & Shelter (NTEE code L) is the only major subsector in Chicago forming below its pre-2000 pace — at a velocity of 0.67x.
The numbers across decades:
| Period | Housing & Shelter Formations |
|---|---|
| Pre-2000 | 99 |
| 2000–2009 | 57 |
| 2010–2020 | 71 |
| 2021–2025 | 66 |
Each decade has produced fewer housing organizations than the one before it. And the 2021–2025 period — during what is broadly recognized as a severe and sustained affordable housing crisis in Chicago — produced only 66 new housing nonprofits. That is fewer than the city formed before 2000, and fewer than any other recent period.
The data cannot explain this pattern. Possible interpretations include: consolidation of existing housing organizations rather than formation of new ones; high capital and regulatory barriers to entry that suppress new formation; or a shift in how housing work is being organized that doesn’t produce independent 501(c)(3) entities. What the data establishes is the pattern itself: housing need and housing nonprofit formation are moving in opposite directions.
Philanthropy & Grantmaking: A 2020 Peak That Has Not Returned
The formation of philanthropic organizations — foundations, giving vehicles, fiscal sponsors — peaked in 2020 at 83 formations, the highest single-year count in this subsector in Chicago’s IRS history. Since then, the numbers have declined every year:
| Year | Philanthropy / Grantmaking |
|---|---|
| 2019 | 57 |
| 2020 | 83 |
| 2021 | 65 |
| 2022 | 81 |
| 2023 | 62 |
| 2024 | 59 |
| 2025 | 52 |
The 2020 peak is consistent with the surge of philanthropic activity that followed that year’s racial justice and public health crises. The data shows a sector that responded to a moment by formalizing new giving and grantmaking structures — and has since returned toward its prior pace.
Religion-Related: Structural Decline
Religion-related organizations (NTEE code X) are forming at 0.84x their pre-2000 pace. More telling is the decade pattern: 338 formations before 2000, 658 in the 2000s, 634 in the 2010s, and 285 in the 2021–2025 period alone. The 2000s and 2010s were actually periods of elevated religious nonprofit formation; the current period represents a significant pullback.
Year-over-year, the pattern is erratic — 84 formations in 2019, dropping to 37 in 2021, recovering to 74–77 in 2022 and 2025 — suggesting volatility rather than smooth decline. But the overall trajectory is below the historical baseline and well below the peak decade of the 2000s.
What the Subsector Data Cannot Tell Us
The NTEE codes classify mission areas, not organizational quality, sustainability, or community impact. A formation counted here is an organization that received IRS tax-exempt status — not necessarily an organization that is currently active, well-funded, or effectively governed. High formation velocity in a subsector tells us that people are organizing around a mission area at elevated rates. It does not tell us whether those organizations have what they need to last.
That gap — between formal incorporation and organizational sustainability — is consistent across every subsector, every cluster, and every mission area in this data. The legal requirements for starting a nonprofit in Youth Development are identical to those in Housing, Arts, or Human Services. The financial systems, governance structures, and funding fundamentals that determine whether a new organization survives its first five years do not vary by NTEE code.
What I’m Doing About It
90 Days to a New Nonprofit is built for founders across every subsector represented in this data.
Whether you’re starting a Youth Development organization on the South Side, a food access nonprofit in Austin, a mental health initiative in Rogers Park, or a grantmaking vehicle in the West Loop — the structural requirements are the same. The IRS does not issue different forms based on your mission area.
What I do is walk you through all of it in 90 days: legal formation done correctly, financial systems built from the start, a board that actually functions, and a funding strategy grounded in how philanthropy actually works.Course opens March 2, 2026 Join the Waitlist →
Data Sources
IRS Exempt Organizations Business Master File (eo_il.csv, November 2025 update), available at irs.gov/pub/irs-soi/eo_il.csv. NTEE classification system developed by the National Center for Charitable Statistics. Of 4,212 Chicago formations identified for 2021–2025, 4,088 (97.1%) carried valid NTEE major group codes. Analysis conducted February 2026.
