Soil organic matter consists of all the dead plant and animal matter in various stages of decay. A soil rich with organic matter supports a thriving population of beneficial organisms from microscopic bacteria and fungi to larger life forms like earthworms. Organic matter acts like a slow release fertilizer and also improves soil structure. Soil microorganisms feed on organic matter and release nitrogen and other nutrients it contains in a form that roots can absorb. Source: County of San Diego Master Gardener Association. Organic Matter also provides compounds that bind soil particles together to form small aggregates that improve soil structure, and dilutes fine particles that are present in heavy clay or silty soils. Source: University of California Cooperative Extension
So what about all of the time you spent researching your soil? Don't feel too bad, I spent a whole semester grasping the concept :).