Variations of this piece have been written so many times in the 15 years I have been working in the sector that I can’t keep them straight.
I think nonprofit—or not-for-profit—is actually a perfectly apt term for the diverse set of organizations that focus on mission not profit. In an era when profit seems to drive everything, being not-for-profit is actually a really important statement and distinction. And it seems to work for the public, too: it is no accident that the American public’s trust is higher in the nonprofit sector than in business or government (though Dan Pallotta inaccurately asserts otherwise in one of his books). See, for example, the Edelman Trust Barometer.
If the term were so problematic, then, by your logic, that would not be the case.
For years I’ve used “mission driven organization”, though I still usually say non-profit for ease of use. Because really, that’s what I like about working in this sector. We’re driven by the mission of our organization, not a desire for profits. I like the idea of defining ourselves by what we are, not what we’re not.
I am not sure about the name change because a Kleenex is a tissue no matter who made it.
But the point is important, non-profit belittles what we do in the ‘sector’. I ran a $40M a year business and was expected to generate a positive net (Profit) year over year. But the term allowed my work to be seen as less than some of my associates who run a ‘for-profits’ significantly less in size and complexity and never once generated an actual profit!
As a retired Social Worker (Smith College School for Social Work, MSW ‘69), I have been bemoaning this term, non-profit, for years. And waging my one woman campaign; one person at a time 😊 It’s really only been in vogue since the rise of the MBA and so-called business practices as a universal standard. Why not say that one works for a social service agency, mental health program, youth development, arts education, a museum, etc etc. Would a physician in a hospital say he/she works at a non-profit? Of course not. I would like to see those who work in the human services or arts fields have the same sense of status and self-regard ... as they did years ago. But all in all, am glad to see this being considered and discussed.
Generally speaking, “nonprofit” describes a tax status and, with the Internal Revenue Code defining more than 25 categories of organizations that are exempt from federal income taxes, the term does little to assist the public in understanding an organization’s purpose. Meanwhile, a growing number and types of organizations are working “to solve the world’s most dire social problems,” irrespective of tax status or legal form. Rebecca’s reference to “mission-driven organizations” is spot on, although the term can be applicable regardless of tax status. Look no further than the B Corporation movement for evidence. As the lines blur, we’re all well-served to take the time to learn more about organizations than just their tax status.
Here we are back in “angels on the head of a pin” territory again. The “sector” is called all sorts of things - nonprofit, not-for-profit, voluntary, community, voluntary & community, third, etc, etc. The wider public don’t seem that bothered, it doesn’t stop them giving lots of money, and it doesn’t seem to hold the sector back or prevent new entrants. I’m uncertain that Dan “put it all into a big centralised bundle with me in charge” Pallotta is the go to guru on this issue.
I very much agree that “non-profit” is not a good term to describe the massive sector of work in this world focused not on making a profit for shareholders but for the good of society and humanity. “Non-profit” only tells the world what you aren’t, not what you are. The term I like is “social enterprise”. It connotes a working, thriving organization that measures success not by how much money it earns but by the achievements and impacts it makes in our world.
Gees, I am feeling tired just reading all this. Not because it is unimportant, but because as Phil Buchanan says so artfully, it has all been said before. Over and over again. The latest effort to re-name this vibrant sector, and is popular especially among the social entrepreneurs, is to refer to it as the “social sector”. That does not do it for me, or for that matter for many people focusing on aspects of the common good that are not social related. In many countries we are referred to as the NGO sector as in non governmental. I guess we will embrace a new name when a really good one comes along. For now I will stick to my mission of seeking to help 48 million people facing hunger in America and also support a sector that mostly strives to make our communities and our world a better place for all.
Like Phil, I have seen this argument circle around and surface many times over the years. I appreciated the historic framing that Allison offered here as well as the lack of conclusion. Personally, I agree that the name does a dis-service to the social change in this sector in two specific ways. First, the name is connected with the issue of full-cost funding, specifically the overhead myth. These pervasive under-capitalization issues lead to a lack of professionalism in our sector. Second, the name “nonprofit” has led many executives and board members to mistakenly believe that they need to end each fiscal year without a surplus! Having said all of that, I am a fan of incremental change versus a radical decision on this one. I routinely use “social sector” and the head of our state association uses “social impact sector”. I believe the term is evolving at its own pace and we should just be cognizant of the real purpose, which is toward public benefit, where public funding falls short.
BYPeter Persuitti (Arthur J. Gallagher & Co. | Nonpr
I never used the term ‘nonprofit’ because it’s not true. If the revenue generated by a nonprofit consistently falls short of expenses, that organization will die. Nonprofits MUST show a profit - revenue must exceed expenses - at one time or another. I use the term ‘not-for-profit’ because it implies these organizations exist for a reason other than to be profitable. That opens the door to the question we all better be able to answer, “So, then, what does your organization do?”
Allison, I expect you feel now like you really stepped in the middle of it! As Diana and Phil observe, there are bigger fish to fry. I also wish you had clarified rather than glossing over the common misperception that “nonprofit” and “charity” are the same thing. I think a lot of harm comes from that misunderstanding and I would rather help the public understand the complexities of the tax code than try to come up with one term to describe us all. It’s really impossible to do so. Even using a single term, being a “charity” means something different from a legal standpoint than a non-legal one. I start my nonprofit management classes on Day One with an exercise in which we look at the various names by which the sector is described… “eleemosynary, philanthropic, independent, third, nonprofit, not-for-profit, not-for-much-profit, charitable, voluntary, tax-exempt, civil society, social enterprise, non-governmental, public benefit…..” We soon discover that each term is only partly accurate in describing such a complex sector.
HOORAY! Thanks to Allison et al. for attacking this issue.
The main reason to ditch the word is that it is factually incorrect, and by a factor of 9-10! The organizations composing the so-called “nonprofit sector” are so heterogeneous as to have NOTHING else in common except their tax-exempt status. They include everything from condo associations, real estate trusts, country and yacht clubs, professional and trade associations, cemeteries, et al. to the NFL, Blue Cross Blue Shield, physicians’ clinical partnerships, and teachers’ retirement funds. The MA Catalogue for Philanthropy examined the IRS Nonprofit Master Data File in detail and found that of 42,000 organizations, only about 4,000 were “private initiatives, for public good, reporting any revenue from the philanthropic marketplace” (i.e., private grants and donations). Projected nationwide, this means 200-300,000 organizations, not 2.5 million. These numbers are being independently confirmed by the IRS itself, which reported that in 2015 it received only 295,000 990s; by the huge charities’ datasets of the national donor-advised funds (e.g., Fidelity, whose total donor-based dataset, from millions of donors and grants over 25 years, is 220,000 charities); by the exploding datasets of online giving platforms (e.g. Network for Good, which reported that in 2015 its 1.1 million donors gave grants to only 31,295 charities); and by statewide community foundations. Charities data is exploding, and as a sheer factual matter, there is no longer any justification for equating “nonprofit” with “philanthropy.”
The rhetorical issue which is discussed here is another matter, but with the same conclusion. To increase charitable giving in America, the terminology around “philanthropy”—philanthropies, philanthropic giving, philanthropist—is far more useful in creating a culture of philanthropy in this country. “Philanthropy” correctly defined, in its etymology and history, means the “love of what it is to be human”—i.e., “love” meaning cultivating, nurturing, promoting, as in “philosophy” (the love of wisdom), and “humanity” in the sense of humaneness, in both benefactors who are cultivating their values, and beneficiaries whose humanity is enhanced by the benefits they receive. Coined as a humanistic term on Line 11, Prometheus Bound, it became quintessentially an American ideal in Hamilton’s First Federalist, which opens with his launching the Founders’ argument for ratification of our Constitution, saying that it “adds the inducements of philanthropy to those of patriotism.” We were intended by our Founders to be a philanthropic nation, a gift to mankind, raising the human condition through democracy and freedom.
Sorry this is so long, but thanks again to all those in the discussion.
The thing that bothers me is not the labels of for-profit or non-profit. We should be less focused on what we call it, and more focused on what we are actually doing.
There are non-profits who are not creating any real social impact, and there are for-profits who are. And what about social enterprises?
We need to move away from such rigid definitions and focus on the real important matter—creating real social impact and real social good.
I agree, Jamie. One of the virtues of the “philanthropy” lexicon—“private initiatives, for public good”—is that it easily includes for-profit businesses that are committed to public good, as with impact investing.
I’m fascinated to learn the etymology of the term “nonprofit!” It’s always a great window into how we evolve language—and how often we are oblivious to the history that underlies it. George McCully’s delineation of the wide range of tax-exempt organizations was also eye-opening. While I appreciate the weariness of those who have seen this question of re-naming the sector come up again and again, I do believe that wrestling with language is worth our effort. Words can have a potent influence on how we think and respond to the ideas they represent. “Philanthropic sector” draws on a more accurate etymology as George points out. I also think that Diana Aviv’s reference to the common good is important. While “common good sector” doesn’t exactly trip off the tongue, I do like its simplicity and how it reinforces the shared aspirations of our respective missions.
In the Humanics Program at Fresno State, we do not use “nonprofit,” preferring the terms Social Impact Organization/Sector, Public Benefit Organization/Sector, or, most frequently, Community Benefit Organization/Sector with the acronym, CBO. We are particularly fond of the argument in support of the reasons to use the term Community Benefit Organization as articulated by Hildy Gottlieb, author of Pollyanna Principles. See the “6 Reasons to use CBO” here: http://blogs.creatingthefuture.org/communityfocus/6-reasons-to-use-the-term-community-benefit-organization/. We even translated this article into Spanish here: http://www.humanicsfresnostate.org/2013/01/subject-resources-two-humanics-scholars-translate-hildy-gottliebs-six-reasons-to-use-the-term-cbo-into-spanish-2/.
1) “Community Benefit” Says What Our Organizations Are and Why They Exist;
2) The Meaning of “Community Benefit Organization” is Straightforward and Clear:
3) The Term “Community Benefit Organization” Creates a Strong, Powerful Self-Image;
4) The Term “Community Benefit Organization” is Inclusive;
5) The Term “Community Benefit Organization” Provides Direct Marching Orders to the Board: Focus on Providing Benefit!
6) “Community Benefit” is a Promise.
Hildy Gottlieb concludes with: “So what is the highest priority outcome of this work we are all doing to make our communities amazing places to live? Is it to vow never to make a profit? Or are we promising to provide benefit to our communities, now and into the future? Are we promising to build strong, healthy, resilient, vibrant places to live?
In the end, if that community benefit is what we are promising to provide, then that is the promise we should proudly proclaim in our name.”
I once had a long conversation in Sydney with Frances Hesselbein from the Leadership Institute who responded my asking what she thought about this question and to which she responded was a great question which has occupied many minds for many many years but one on which she wouldn’t waste her time. There is a great piece of writing on this for a US academic Roger A Lohmann - And Lettuce Is Nonanimal:
Toward a Positive Economics
of Voluntary Action
in which he says: Classifying lettuce as a mammal produces
approximately the same effect. Lettuce is a non-fur-bearing, non-milkproducing,
non-child-bearing, and non-warm-blooded nonanimal. Further,
as a mammal, lettuce is highly ineffective, being sedentary and not
warm-blooded. All other mammals are much faster! Lettuce is also
remarkably nonagile and fails to protect its young. On the whole, lettuce
is a miserable excuse for a mammal!
In Canada, many of the largest “charities” are extremely profitable. hospital foundations, cancer research, United Ways etc. have annual surpluses (profits?) sometimes exceeding 40% of revenues. The term non-profit organization is inaccurate and misleading to donors in these circumstances. For the meantime, Charity Intelligence uses the term “charity” to signal this is an organization funded by the generosity of donors.
It’s way past time to ditch it. Linguistically, “nonprofit” is awful. This isn’t a new idea, yet there hasn’t been a serious attempt to replace it to date. Trendy, jargon-laden terms like “social impact sector” won’t get many steps out of the batter’s box. The reason the old term has stuck is that two steps are required for change. First, we need a simple, clear replacement term, and second, a lot of early-adopters need to start using it every day. The first part is the easier of the two, though I’m disappointed this author didn’t come out and advocate for one. The second step is the hard part and, unfortunately, language tends to change at its own pace.
The “simple, clear, replacement term” you seek is variants on the word and concept of “philanthropy”—e.g., “philanthropies”, “philanthropic”, “philanthropist”, etc.—conventionally defined as “private initiatives, for public good.” It will help build a culture of philanthropy in America, through donor education, which will increase charitable giving—our single greatest need. It is humanistic and donors love it; it ties us firmly to the long Classical tradition and to its direct connection with our founding as a nation; “philanthropic studies” is already superseding “nonprofit management” and the like in scholarship and higher education.
As many have mentioned, I agree that we’ve been debating what to call ourselves and the work we do for quite some time. I also agree, as has been outlined in several comments, that we focus less on the work we do and its impact on the lives of those we serve than on what we collectively call ourselves. At the same time, however, I’ve been listening to Maya Angelou lately, and as I read this article and its associated comments, I kept hearing her say that “words are things.”
The challenge then is how do we find a word or phrase that is inclusive of the legal and political underpinnings of our organizational structures, the principal need for us to make a positive social impact, and the reality that the problems we’re facing have become so complex that our organizations and our sector alone cannot solve them. When I first glanced at the article, reading a few lines here and there, I thought about proposing the term, “social justice sector.” As I continued to think this through, however, I realized we aren’t the only ones — nor should we be the only ones — promoting justice in our local and global communities.
That said, I’ve been thinking a lot about the word, “catalyst.” Given that most of our work is focused on elevating the needs of the neglected, the mistreated and the misunderstood into the social conscious, what value might the word “catalyst” hold for us in rebranding our sector?
I must say that I don’t understand these opinions and thoughts. I don’t see every organization that works with people to improve lives ... whether individually (including couples/families) or in a community or societally; whether in the social services, mental health, education, criminal justice or even the arts .... should be titled under one term. I always said that I was a Clinical Social Worker doing psychotherapy or crisis intervention, etc. This way we publicize the work we do and causes we support ... and make them a part of the conversation and public consciousness. It has broken my heart to see the term Social Work disappear; e.g. Washington University has changed name of school eliminating Social Work. I attribute the focus on profit ... or being ‘non’ .. to the decline in human services and the state of our common welfare. Yes, I do.
May I suggest that instead of nonprofit, we use the term social profit organizations? I sympathize with the comments from those who are weary of the conversation, but I think the term social profit is helpful to those new to the sector, whether in a staff or board role, and to those who haven’t given the sector much thought at all, because it quickly expresses the sector’s purpose and value. And, for me, the term social profit begs the question for seasoned practitioners, “How do you measure it?” That is a great conversation because it invites both quantitative and qualitative measures that can help bring the social profit about. I write about this in The Social Profit Handbook, published last year by Chelsea Green.
Ben, with respect, no one is forcing anyone else to participate in an honest and conscientious inquiry to achieve precise fundamental vocabulary. Anyone who feels they have “more important” things to do is more than welcome to do them. They, however, do not have any right to tell others how to spend their professional time. The history of science is punctuated at every advancing development by a search for more precise, useful, and powerful terminology; what the reformers are looking for is practical, technical, advances. If you find this discussion intellectually fatiguing, fine—don’t participate. No problem. Free country. But there is no need to criticize those who are engaged in a search for solutions to demonstrable problems.
With thanks for your decades of excellent service to the field, g.
George, I agree with you. So thank you. It actually is very significant what one calls oneself and how one refers to the work one does. The term non-profit describes nothing about what the work is. The tax status is irrelevant. And the concept of comparing yourself to the for-profit world has done a real disservice to the people we work with. Trust me, I’ve been watching it for 50 years! OK, I think I should sign off now.
Regarding the challenge of finding a replacement term that will stick, here’s a specific suggestion: community benefit organization.
The trouble with terms including “social” or “impact” is that they’re academic - they mean other things to most people, and “most people” are the ones who need to adopt it (not academics, philanthropists and consultants, those of us inside the “social sector” bubble). Everyone understands what “community” and “benefit” mean, and they’re both positive and accurate, and neither is likely to feel dated in 10 years.
I googled “community benefit organization” to see what would come up, and found an interesting blog from an MSO in Michigan I hadn’t been aware of. The writer points out that we’re not “non-” anything, and we’re not about “profit.” But every nonprofit is incorporated to benefit a community. Here’s the link: http://www.help4nonprofits.com/BrainTeaser/BrainTeaser-Is_Your_Organization_a_NonProfit.htm
With thanks for this constructive suggestion and its reasoning, the problems I have with it are that a) many charities are not directly “community” oriented, but focus on helping individuals, natural environments, various disciplines or arts, etc.; b) three words is too many for convenient usage in ordinary English, as distinct from technical lingo, especially in the social sciences; and c) the term is not conducive to cultural influence—building a culture around the term “community” is not going to happen in a society that prizes individuality. The strategic future of philanthropy is, I believe, more likely to be humanistic, grounded in and continuous with its long tradition in Western culture and its role in the founding of this nation, than social-scientific which was a recent departure from the long Classical tradition in Western thought.
Good question, Samer. If by the “legal form” you mean “charity”, because all 501(c)3 corporations are “public charities” and “charitable corporations” in law, yes that is an adequate term. (If you meant “501(c)3s”, that term is far too technical for ordinary usage. There is a slight problem with “charities” however, because only about 15% of public charities actually seek private grants and donations; the rest live off other sources of income—endowments, membership dues, earned income, government grants, etc. This is why I prefer the term “philanthropies”, conventionally defined as “private (i.e. not government) initiatives, for public (i.e. not private, and not “the” because there is never any consensus on what that might be) good, engaged in the philanthropic marketplace (i.e, fundraising for private grants and donations.” It precisely delimits institutionalized philanthropy—no more and no less than the actual cohort of interest to donors.
Outside of a purely US-focused perspective, how our organizations are described matters a great deal as their description can allow (or prevent) us getting a seat a policy tables, access to decision-makers and others. Here in Switzerland, our type of organization is described as a “foundation” (which has a different connotation than in the US). Within the global organizations, the UN and across a lot of the world, we are often called “civil society organizations”—that is, organizations that are not affiliated with governments and are not “private sector” or profit-making. For what is worth, here is the World Health Organization’s glossary definition of Civil Society Organization: http://www.who.int/trade/glossary/story006/en/ , including some of the complications with the definition. This term is used very broadly outside of North America.
Very good point, Andrea, and I believe from conversations I’ve had with philanthropists in the UK, Europe and Israel that their terminology has the same problems we have in the US from defining philanthropy negatively—by disassociation from government and business. The fact is that NGOs include an extremely heterogeneous group of organizations, so that the term is factually incorrect as a synonym for philanthropy, and significant advantages would be gained by defining philanthropy positively, as “private initiatives for public good.”
As someone who works in career development and speaks with lots of job seekers, I can say that many don’t seem to make the distinction between “for profits” and “nonprofits” in their searches. While there is a strong interest in working at an organization that is in line with the job seeker’s values and ethics, the focus not on whether that entity makes a profit while also “doing good”. They just want to work someplace that seems to be making a difference.
Exactly—thanks, Victoria. The word is technical and academic lingo, not anything that is meaningful to people in general. The word “philanthropy”—private initiatives, for public good—can apply to both for-profit and nonprofit organizations. Philanthropy is what Victoria’s people are interested in (though they have not been taught to use the word—perhaps Victoria should suggest it?).
Thanks so much, I use the term SOCIAL PROFIT to refer to the work in our sector because that is what we generate—a social profit for all. And one can spell profit two ways: PROFIT and PROPHET. We are also the social PROPHETS of our time—standing for a new future and bringing it in to existence. Thanks. Lynne Twist. Author of The Soul of Money
Lynne, am surprised and pleased to meet up on this site. My daughter sent me article because of my constant bemoaning the use of the term ‘non-profit’ to be a catch-all for all kinds of organizations. After reading these comments I think there are two different jobs/work/tasks etc being discussed: providing services or programs and raising money (i.e. philanthropy). My thoughts above refer to the former; ‘doing’ the work. Philanthropy supports or funds the work. Don’t like non-profit for either. All the best to you,
I’m inclined toward the idea of “Social Advancement” organizations or enterprises as the term implies not just that there’s some “impact” but actual progress in improving lives. As others have pointed out, the biggest challenge for those of us who lead “non-profits” is to define ourselves and our success first in human advancement terms as opposed to funding terms. In fact many of the most successful “non-profits” operate what amount to profit-making ventures that fund their social advancement missions. That’s as it should be, but it doesn’t comport with a non-profit label.
How about simply “Human Services”? It shouldn’t matter whether the organization is legally or tax-wise labeled “non profit,” meaning no excess revenue inuring to anyone; it all goes back to the organization. I agree with many here - let’s be known by what we do, not our legal status.
The reason “Human Services” doesn’t cover all of philanthropy (private initiatives for public good” is that there are two additional fundamental fields of philanthropy: Nature (the environment) and Culture (what humans have made and thought—arts and education). Some add a third: “Promoting Philanthropy”—e.g. what community foundations and donor-advised fund sponsors do.
The key for linguistic factual accuracy is to separate out philanthropy from “nonprofits”—only 1 in 10 nonprofits are philanthropic.
I agree with Kurt; about using Human Services/Arts/Museum/Hospital (and on and on) for the agencies/organizations that ‘do’ the work and provide the services to people and communities. And, leave the word philanthropy or fundraising or endowment or whatever ... to those that provide the funding. The 2 spheres are different entities ... and their concerns, challenges, professional knowledge base, training, education, etc are ‘totally’ different. It does not make sense nor is good for the direct service providers to lump together such very different types of work. Social services and mental health, etc gets lost in the glare of philanthropy.
Delighted to see this article. Nearly a decade ago I began calling non-profits “social-profits” not to be clever, but because I was finding people were having a hard time figuring out how to effectively design their organizations based on what they were NOT trying to achieve. And as importantly, board members, often coming from the for-profit private sector, and the non-profit’s staff themselves, didn’t even realize they had a problem.
Hence the experiment to change the social-sector design paradigm from one of non-profit to one of social-profit.
It’s working!
A for-profit’s bottom line is financial return. Clear as a bell. A social-profit’s bottom line, as Drucker articulated years ago, is a change in the human condition… in our capacities, health, education, environment, etc.
While we must thoughtfully design strategies and partnerships to keep us financially healthy, when we state our bottom line is one of social-profit, it gives us a whole new platform and mandate from which to organize, design, measure, and report on our efforts.
It’s more than semantics. It’s design-thinking to fit the bill. Bring it On!
Names of organizations are very important for it to be viewed by the public. And sometimes misleading name might cause wide discussion and arguments among people and media. So the name of organizations should be precise and reflect their idea and goals. Take an example of my experience, on websites there are always debates about feminism. Some people don’t support it since the name only reflects the their protection of female rights ignoring the fact that many rights of males are violated as well and thus suggest that the name should be changed to “equal rights” rather than “feminism”. Other group explains that “feminism is equal to ‘equal rights’”. I regard this instance as a very suitable case to illustrate this thing.
The topic of discussion is very much relevant, and i agree with most of suggestions, that a better word, for what the sector does is needed, and consensus and usage should happen
Not for profit, is only designed from Tax perspective, and intention of not being profit making , and serves that purpose well and let it be, but it does not define the intended purpose.
SOCIAL PROFIT, looks to be a good option, since in essence most not profits work to make benefits, or advancements or difference is really a social profit, and can bring a change in usage of language to not link profits only to money, but there are several other profits too (just like profit in health, environment, emotion, etc)
With respect, it is simply not true that “most not profits work to make benefits, or advancements or difference [which] is really a social profit….” The evidence is each State’s IRS Master File of tax-exempt entities, which may be downloaded from the internet—I urge you to check it out, page by page, maybe for any three or more randomly selected pages.
The statutory criterion for tax-exemption is whether or not its existence is in the public interest, which is short of actually conferring public benefit. Thus medical doctors’ clinical practices may be tax-exempt and their profits distributed to the doctors where they are taxed as personal income. Condo associations, self-serving social clubs, real estate trusts, teachers retirement funds, self-serving professional and trade associations, alumni associations, etc., etc., etc. are all tax-exempt and in our mutual interest to exist, but they are not required to confer actual benefits on society. Public charities (philanthropy—private initiatives for public good) are required to benefit society in designated ways, and to raise their funds from the public, and so have the additional privilege of tax-deductibility of those donations by the donors.
I think if you would ask the average donor to name several non-profit organizations, 0% of them would include real estate trusts, trade and alumni associations and clinics. But you would get a great list of health, education and social service organizations. Why take away an identity that serves a purpose?
Please call organizations in a way that identifies ... and respects ... what they do. Social services, mental health, education, youth development, etc. Tax status is not defining and certainly not what should be highlighted.
First, I’m not proposing taking anything away. What I suggest is that we use terms accurately. All charities (philanthropies) are “nonprofits”, but all—in fact, the great majority)of “nonprofits” are not philanthropic. All bananas are fruits, but only a small percentage of fruits are bananas. So call fruits fruits, and bananas bananas.
The advantage of ending this confusion with “nonprofits” is that we can build a culture of philanthropy—“private initiatives for public good”—in America, which we had when we were founded; but we cannot build a culture of “nonprofits”.
Philanthropy is not the same as direct service. Or even research. I love the recent comment about fruits and bananas. Don’t lump very very different organizations into one (tax related) term. It’s not all about profit; or is it?
Philanthropy is not the same as direct service. Or even research. I love the recent comment about fruits and bananas. A foundation is one thing; an agency providing service or programs is another. Don’t lump very different organizations into one (tax related) term. It’s not all about profit; or is it?
COMMENTS
BY Phil Buchanan
ON June 13, 2016 10:45 AM
Variations of this piece have been written so many times in the 15 years I have been working in the sector that I can’t keep them straight.
I think nonprofit—or not-for-profit—is actually a perfectly apt term for the diverse set of organizations that focus on mission not profit. In an era when profit seems to drive everything, being not-for-profit is actually a really important statement and distinction. And it seems to work for the public, too: it is no accident that the American public’s trust is higher in the nonprofit sector than in business or government (though Dan Pallotta inaccurately asserts otherwise in one of his books). See, for example, the Edelman Trust Barometer.
If the term were so problematic, then, by your logic, that would not be the case.
I blogged about this here—in response to previous op eds making the points made above. http://www.effectivephilanthropy.org/wearing-it-proudly-clarity-on-being-nonprofit/
BY Rebecca Schwartz
ON June 13, 2016 02:54 PM
For years I’ve used “mission driven organization”, though I still usually say non-profit for ease of use. Because really, that’s what I like about working in this sector. We’re driven by the mission of our organization, not a desire for profits. I like the idea of defining ourselves by what we are, not what we’re not.
BY Steve Armstrong
ON June 14, 2016 06:18 AM
I am not sure about the name change because a Kleenex is a tissue no matter who made it.
But the point is important, non-profit belittles what we do in the ‘sector’. I ran a $40M a year business and was expected to generate a positive net (Profit) year over year. But the term allowed my work to be seen as less than some of my associates who run a ‘for-profits’ significantly less in size and complexity and never once generated an actual profit!
BY Phil Buchanan
ON June 14, 2016 06:25 AM
Actually, nonprofits are held in higher esteem and trust by the public than business. Wear it proudly. And it’s not a “profit” when a nonprofit has a surplus. It’s a surplus, reinvested in some way into mission rather than distributed to owners. Get over the inferiority complex; as Vu Le says in this great post, it’s not sexy. http://nonprofitwithballs.com/2014/11/the-nonprofit-inferiority-complex-is-not-sexy/http://nonprofitwithballs.com/2014/11/the-nonprofit-inferiority-complex-is-not-sexy/
BY Susan Slesinger Ulevitch
ON June 14, 2016 10:48 PM
As a retired Social Worker (Smith College School for Social Work, MSW ‘69), I have been bemoaning this term, non-profit, for years. And waging my one woman campaign; one person at a time 😊 It’s really only been in vogue since the rise of the MBA and so-called business practices as a universal standard. Why not say that one works for a social service agency, mental health program, youth development, arts education, a museum, etc etc. Would a physician in a hospital say he/she works at a non-profit? Of course not. I would like to see those who work in the human services or arts fields have the same sense of status and self-regard ... as they did years ago. But all in all, am glad to see this being considered and discussed.
BY George Chmael
ON June 16, 2016 11:31 AM
Generally speaking, “nonprofit” describes a tax status and, with the Internal Revenue Code defining more than 25 categories of organizations that are exempt from federal income taxes, the term does little to assist the public in understanding an organization’s purpose. Meanwhile, a growing number and types of organizations are working “to solve the world’s most dire social problems,” irrespective of tax status or legal form. Rebecca’s reference to “mission-driven organizations” is spot on, although the term can be applicable regardless of tax status. Look no further than the B Corporation movement for evidence. As the lines blur, we’re all well-served to take the time to learn more about organizations than just their tax status.
BY Leslie Forsyth
ON June 16, 2016 11:34 AM
Here we are back in “angels on the head of a pin” territory again. The “sector” is called all sorts of things - nonprofit, not-for-profit, voluntary, community, voluntary & community, third, etc, etc. The wider public don’t seem that bothered, it doesn’t stop them giving lots of money, and it doesn’t seem to hold the sector back or prevent new entrants. I’m uncertain that Dan “put it all into a big centralised bundle with me in charge” Pallotta is the go to guru on this issue.
BY Ken deLaski
ON June 16, 2016 11:38 AM
I very much agree that “non-profit” is not a good term to describe the massive sector of work in this world focused not on making a profit for shareholders but for the good of society and humanity. “Non-profit” only tells the world what you aren’t, not what you are. The term I like is “social enterprise”. It connotes a working, thriving organization that measures success not by how much money it earns but by the achievements and impacts it makes in our world.
BY Diana Aviv
ON June 16, 2016 12:23 PM
Gees, I am feeling tired just reading all this. Not because it is unimportant, but because as Phil Buchanan says so artfully, it has all been said before. Over and over again. The latest effort to re-name this vibrant sector, and is popular especially among the social entrepreneurs, is to refer to it as the “social sector”. That does not do it for me, or for that matter for many people focusing on aspects of the common good that are not social related. In many countries we are referred to as the NGO sector as in non governmental. I guess we will embrace a new name when a really good one comes along. For now I will stick to my mission of seeking to help 48 million people facing hunger in America and also support a sector that mostly strives to make our communities and our world a better place for all.
BY Debra Natenshon
ON June 16, 2016 12:59 PM
Like Phil, I have seen this argument circle around and surface many times over the years. I appreciated the historic framing that Allison offered here as well as the lack of conclusion. Personally, I agree that the name does a dis-service to the social change in this sector in two specific ways. First, the name is connected with the issue of full-cost funding, specifically the overhead myth. These pervasive under-capitalization issues lead to a lack of professionalism in our sector. Second, the name “nonprofit” has led many executives and board members to mistakenly believe that they need to end each fiscal year without a surplus! Having said all of that, I am a fan of incremental change versus a radical decision on this one. I routinely use “social sector” and the head of our state association uses “social impact sector”. I believe the term is evolving at its own pace and we should just be cognizant of the real purpose, which is toward public benefit, where public funding falls short.
BY Peter Persuitti (Arthur J. Gallagher & Co. | Nonpr
ON June 16, 2016 01:19 PM
Enjoyed reading given my own experiences. Also, being a Classicist I really appreciated the semantic and historical perspective!
BY Otto Reinisch
ON June 16, 2016 01:21 PM
I never used the term ‘nonprofit’ because it’s not true. If the revenue generated by a nonprofit consistently falls short of expenses, that organization will die. Nonprofits MUST show a profit - revenue must exceed expenses - at one time or another. I use the term ‘not-for-profit’ because it implies these organizations exist for a reason other than to be profitable. That opens the door to the question we all better be able to answer, “So, then, what does your organization do?”
BY Beth Gazley
ON June 16, 2016 01:23 PM
Allison, I expect you feel now like you really stepped in the middle of it! As Diana and Phil observe, there are bigger fish to fry. I also wish you had clarified rather than glossing over the common misperception that “nonprofit” and “charity” are the same thing. I think a lot of harm comes from that misunderstanding and I would rather help the public understand the complexities of the tax code than try to come up with one term to describe us all. It’s really impossible to do so. Even using a single term, being a “charity” means something different from a legal standpoint than a non-legal one. I start my nonprofit management classes on Day One with an exercise in which we look at the various names by which the sector is described… “eleemosynary, philanthropic, independent, third, nonprofit, not-for-profit, not-for-much-profit, charitable, voluntary, tax-exempt, civil society, social enterprise, non-governmental, public benefit…..” We soon discover that each term is only partly accurate in describing such a complex sector.
BY George McCully
ON June 16, 2016 01:45 PM
HOORAY! Thanks to Allison et al. for attacking this issue.
The main reason to ditch the word is that it is factually incorrect, and by a factor of 9-10! The organizations composing the so-called “nonprofit sector” are so heterogeneous as to have NOTHING else in common except their tax-exempt status. They include everything from condo associations, real estate trusts, country and yacht clubs, professional and trade associations, cemeteries, et al. to the NFL, Blue Cross Blue Shield, physicians’ clinical partnerships, and teachers’ retirement funds. The MA Catalogue for Philanthropy examined the IRS Nonprofit Master Data File in detail and found that of 42,000 organizations, only about 4,000 were “private initiatives, for public good, reporting any revenue from the philanthropic marketplace” (i.e., private grants and donations). Projected nationwide, this means 200-300,000 organizations, not 2.5 million. These numbers are being independently confirmed by the IRS itself, which reported that in 2015 it received only 295,000 990s; by the huge charities’ datasets of the national donor-advised funds (e.g., Fidelity, whose total donor-based dataset, from millions of donors and grants over 25 years, is 220,000 charities); by the exploding datasets of online giving platforms (e.g. Network for Good, which reported that in 2015 its 1.1 million donors gave grants to only 31,295 charities); and by statewide community foundations. Charities data is exploding, and as a sheer factual matter, there is no longer any justification for equating “nonprofit” with “philanthropy.”
The rhetorical issue which is discussed here is another matter, but with the same conclusion. To increase charitable giving in America, the terminology around “philanthropy”—philanthropies, philanthropic giving, philanthropist—is far more useful in creating a culture of philanthropy in this country. “Philanthropy” correctly defined, in its etymology and history, means the “love of what it is to be human”—i.e., “love” meaning cultivating, nurturing, promoting, as in “philosophy” (the love of wisdom), and “humanity” in the sense of humaneness, in both benefactors who are cultivating their values, and beneficiaries whose humanity is enhanced by the benefits they receive. Coined as a humanistic term on Line 11, Prometheus Bound, it became quintessentially an American ideal in Hamilton’s First Federalist, which opens with his launching the Founders’ argument for ratification of our Constitution, saying that it “adds the inducements of philanthropy to those of patriotism.” We were intended by our Founders to be a philanthropic nation, a gift to mankind, raising the human condition through democracy and freedom.
Sorry this is so long, but thanks again to all those in the discussion.
BY Jamie Chiu
ON June 16, 2016 02:19 PM
The thing that bothers me is not the labels of for-profit or non-profit. We should be less focused on what we call it, and more focused on what we are actually doing.
There are non-profits who are not creating any real social impact, and there are for-profits who are. And what about social enterprises?
We need to move away from such rigid definitions and focus on the real important matter—creating real social impact and real social good.
BY George McCully
ON June 16, 2016 02:29 PM
I agree, Jamie. One of the virtues of the “philanthropy” lexicon—“private initiatives, for public good”—is that it easily includes for-profit businesses that are committed to public good, as with impact investing.
BY MEGAN BARTON
ON June 16, 2016 03:46 PM
I’m fascinated to learn the etymology of the term “nonprofit!” It’s always a great window into how we evolve language—and how often we are oblivious to the history that underlies it. George McCully’s delineation of the wide range of tax-exempt organizations was also eye-opening. While I appreciate the weariness of those who have seen this question of re-naming the sector come up again and again, I do believe that wrestling with language is worth our effort. Words can have a potent influence on how we think and respond to the ideas they represent. “Philanthropic sector” draws on a more accurate etymology as George points out. I also think that Diana Aviv’s reference to the common good is important. While “common good sector” doesn’t exactly trip off the tongue, I do like its simplicity and how it reinforces the shared aspirations of our respective missions.
BY Matthew Jendian
ON June 16, 2016 04:06 PM
In the Humanics Program at Fresno State, we do not use “nonprofit,” preferring the terms Social Impact Organization/Sector, Public Benefit Organization/Sector, or, most frequently, Community Benefit Organization/Sector with the acronym, CBO. We are particularly fond of the argument in support of the reasons to use the term Community Benefit Organization as articulated by Hildy Gottlieb, author of Pollyanna Principles. See the “6 Reasons to use CBO” here: http://blogs.creatingthefuture.org/communityfocus/6-reasons-to-use-the-term-community-benefit-organization/. We even translated this article into Spanish here: http://www.humanicsfresnostate.org/2013/01/subject-resources-two-humanics-scholars-translate-hildy-gottliebs-six-reasons-to-use-the-term-cbo-into-spanish-2/.
1) “Community Benefit” Says What Our Organizations Are and Why They Exist;
2) The Meaning of “Community Benefit Organization” is Straightforward and Clear:
3) The Term “Community Benefit Organization” Creates a Strong, Powerful Self-Image;
4) The Term “Community Benefit Organization” is Inclusive;
5) The Term “Community Benefit Organization” Provides Direct Marching Orders to the Board: Focus on Providing Benefit!
6) “Community Benefit” is a Promise.
Hildy Gottlieb concludes with: “So what is the highest priority outcome of this work we are all doing to make our communities amazing places to live? Is it to vow never to make a profit? Or are we promising to provide benefit to our communities, now and into the future? Are we promising to build strong, healthy, resilient, vibrant places to live?
In the end, if that community benefit is what we are promising to provide, then that is the promise we should proudly proclaim in our name.”
BY David F Thompson
ON June 16, 2016 11:11 PM
I once had a long conversation in Sydney with Frances Hesselbein from the Leadership Institute who responded my asking what she thought about this question and to which she responded was a great question which has occupied many minds for many many years but one on which she wouldn’t waste her time. There is a great piece of writing on this for a US academic Roger A Lohmann - And Lettuce Is Nonanimal:
Toward a Positive Economics
of Voluntary Action
in which he says: Classifying lettuce as a mammal produces
approximately the same effect. Lettuce is a non-fur-bearing, non-milkproducing,
non-child-bearing, and non-warm-blooded nonanimal. Further,
as a mammal, lettuce is highly ineffective, being sedentary and not
warm-blooded. All other mammals are much faster! Lettuce is also
remarkably nonagile and fails to protect its young. On the whole, lettuce
is a miserable excuse for a mammal!
BY Kate Bahen
ON June 17, 2016 07:09 AM
In Canada, many of the largest “charities” are extremely profitable. hospital foundations, cancer research, United Ways etc. have annual surpluses (profits?) sometimes exceeding 40% of revenues. The term non-profit organization is inaccurate and misleading to donors in these circumstances. For the meantime, Charity Intelligence uses the term “charity” to signal this is an organization funded by the generosity of donors.
BY Scott Schaffer
ON June 17, 2016 07:56 AM
It’s way past time to ditch it. Linguistically, “nonprofit” is awful. This isn’t a new idea, yet there hasn’t been a serious attempt to replace it to date. Trendy, jargon-laden terms like “social impact sector” won’t get many steps out of the batter’s box. The reason the old term has stuck is that two steps are required for change. First, we need a simple, clear replacement term, and second, a lot of early-adopters need to start using it every day. The first part is the easier of the two, though I’m disappointed this author didn’t come out and advocate for one. The second step is the hard part and, unfortunately, language tends to change at its own pace.
BY George McCully
ON June 17, 2016 08:12 AM
The “simple, clear, replacement term” you seek is variants on the word and concept of “philanthropy”—e.g., “philanthropies”, “philanthropic”, “philanthropist”, etc.—conventionally defined as “private initiatives, for public good.” It will help build a culture of philanthropy in America, through donor education, which will increase charitable giving—our single greatest need. It is humanistic and donors love it; it ties us firmly to the long Classical tradition and to its direct connection with our founding as a nation; “philanthropic studies” is already superseding “nonprofit management” and the like in scholarship and higher education.
BY Paul Brown
ON June 17, 2016 08:16 AM
As many have mentioned, I agree that we’ve been debating what to call ourselves and the work we do for quite some time. I also agree, as has been outlined in several comments, that we focus less on the work we do and its impact on the lives of those we serve than on what we collectively call ourselves. At the same time, however, I’ve been listening to Maya Angelou lately, and as I read this article and its associated comments, I kept hearing her say that “words are things.”
The challenge then is how do we find a word or phrase that is inclusive of the legal and political underpinnings of our organizational structures, the principal need for us to make a positive social impact, and the reality that the problems we’re facing have become so complex that our organizations and our sector alone cannot solve them. When I first glanced at the article, reading a few lines here and there, I thought about proposing the term, “social justice sector.” As I continued to think this through, however, I realized we aren’t the only ones — nor should we be the only ones — promoting justice in our local and global communities.
That said, I’ve been thinking a lot about the word, “catalyst.” Given that most of our work is focused on elevating the needs of the neglected, the mistreated and the misunderstood into the social conscious, what value might the word “catalyst” hold for us in rebranding our sector?
BY Susan Slesinger Ulevitch, MSW '69
ON June 17, 2016 09:09 AM
I must say that I don’t understand these opinions and thoughts. I don’t see every organization that works with people to improve lives ... whether individually (including couples/families) or in a community or societally; whether in the social services, mental health, education, criminal justice or even the arts .... should be titled under one term. I always said that I was a Clinical Social Worker doing psychotherapy or crisis intervention, etc. This way we publicize the work we do and causes we support ... and make them a part of the conversation and public consciousness. It has broken my heart to see the term Social Work disappear; e.g. Washington University has changed name of school eliminating Social Work. I attribute the focus on profit ... or being ‘non’ .. to the decline in human services and the state of our common welfare. Yes, I do.
BY David Grant
ON June 17, 2016 10:22 AM
May I suggest that instead of nonprofit, we use the term social profit organizations? I sympathize with the comments from those who are weary of the conversation, but I think the term social profit is helpful to those new to the sector, whether in a staff or board role, and to those who haven’t given the sector much thought at all, because it quickly expresses the sector’s purpose and value. And, for me, the term social profit begs the question for seasoned practitioners, “How do you measure it?” That is a great conversation because it invites both quantitative and qualitative measures that can help bring the social profit about. I write about this in The Social Profit Handbook, published last year by Chelsea Green.
BY Ben Shute
ON June 17, 2016 03:13 PM
I agree with Phil and Diana - This conversation makes me tired. We have more important things to do.
BY George McCully
ON June 17, 2016 03:32 PM
Ben, with respect, no one is forcing anyone else to participate in an honest and conscientious inquiry to achieve precise fundamental vocabulary. Anyone who feels they have “more important” things to do is more than welcome to do them. They, however, do not have any right to tell others how to spend their professional time. The history of science is punctuated at every advancing development by a search for more precise, useful, and powerful terminology; what the reformers are looking for is practical, technical, advances. If you find this discussion intellectually fatiguing, fine—don’t participate. No problem. Free country. But there is no need to criticize those who are engaged in a search for solutions to demonstrable problems.
With thanks for your decades of excellent service to the field, g.
BY Susan Slesinger Ulevitch, MSW '69
ON June 17, 2016 04:21 PM
George, I agree with you. So thank you. It actually is very significant what one calls oneself and how one refers to the work one does. The term non-profit describes nothing about what the work is. The tax status is irrelevant. And the concept of comparing yourself to the for-profit world has done a real disservice to the people we work with. Trust me, I’ve been watching it for 50 years! OK, I think I should sign off now.
BY Schaffer, Public Interest Management Group
ON June 18, 2016 06:45 AM
Regarding the challenge of finding a replacement term that will stick, here’s a specific suggestion: community benefit organization.
The trouble with terms including “social” or “impact” is that they’re academic - they mean other things to most people, and “most people” are the ones who need to adopt it (not academics, philanthropists and consultants, those of us inside the “social sector” bubble). Everyone understands what “community” and “benefit” mean, and they’re both positive and accurate, and neither is likely to feel dated in 10 years.
I googled “community benefit organization” to see what would come up, and found an interesting blog from an MSO in Michigan I hadn’t been aware of. The writer points out that we’re not “non-” anything, and we’re not about “profit.” But every nonprofit is incorporated to benefit a community. Here’s the link: http://www.help4nonprofits.com/BrainTeaser/BrainTeaser-Is_Your_Organization_a_NonProfit.htm
BY George McCully
ON June 18, 2016 06:58 AM
With thanks for this constructive suggestion and its reasoning, the problems I have with it are that a) many charities are not directly “community” oriented, but focus on helping individuals, natural environments, various disciplines or arts, etc.; b) three words is too many for convenient usage in ordinary English, as distinct from technical lingo, especially in the social sciences; and c) the term is not conducive to cultural influence—building a culture around the term “community” is not going to happen in a society that prizes individuality. The strategic future of philanthropy is, I believe, more likely to be humanistic, grounded in and continuous with its long tradition in Western culture and its role in the founding of this nation, than social-scientific which was a recent departure from the long Classical tradition in Western thought.
BY Samer Abdelnour
ON June 18, 2016 10:19 AM
Is the legal form not an appropriate means for classification?
BY George McCully
ON June 18, 2016 10:59 AM
Good question, Samer. If by the “legal form” you mean “charity”, because all 501(c)3 corporations are “public charities” and “charitable corporations” in law, yes that is an adequate term. (If you meant “501(c)3s”, that term is far too technical for ordinary usage. There is a slight problem with “charities” however, because only about 15% of public charities actually seek private grants and donations; the rest live off other sources of income—endowments, membership dues, earned income, government grants, etc. This is why I prefer the term “philanthropies”, conventionally defined as “private (i.e. not government) initiatives, for public (i.e. not private, and not “the” because there is never any consensus on what that might be) good, engaged in the philanthropic marketplace (i.e, fundraising for private grants and donations.” It precisely delimits institutionalized philanthropy—no more and no less than the actual cohort of interest to donors.
BY Andrea Lucard
ON June 20, 2016 05:56 AM
Outside of a purely US-focused perspective, how our organizations are described matters a great deal as their description can allow (or prevent) us getting a seat a policy tables, access to decision-makers and others. Here in Switzerland, our type of organization is described as a “foundation” (which has a different connotation than in the US). Within the global organizations, the UN and across a lot of the world, we are often called “civil society organizations”—that is, organizations that are not affiliated with governments and are not “private sector” or profit-making. For what is worth, here is the World Health Organization’s glossary definition of Civil Society Organization: http://www.who.int/trade/glossary/story006/en/ , including some of the complications with the definition. This term is used very broadly outside of North America.
BY George McCully
ON June 20, 2016 06:03 AM
Very good point, Andrea, and I believe from conversations I’ve had with philanthropists in the UK, Europe and Israel that their terminology has the same problems we have in the US from defining philanthropy negatively—by disassociation from government and business. The fact is that NGOs include an extremely heterogeneous group of organizations, so that the term is factually incorrect as a synonym for philanthropy, and significant advantages would be gained by defining philanthropy positively, as “private initiatives for public good.”
BY Victoria Crispo
ON June 20, 2016 03:14 PM
As someone who works in career development and speaks with lots of job seekers, I can say that many don’t seem to make the distinction between “for profits” and “nonprofits” in their searches. While there is a strong interest in working at an organization that is in line with the job seeker’s values and ethics, the focus not on whether that entity makes a profit while also “doing good”. They just want to work someplace that seems to be making a difference.
BY George McCully
ON June 20, 2016 03:41 PM
Exactly—thanks, Victoria. The word is technical and academic lingo, not anything that is meaningful to people in general. The word “philanthropy”—private initiatives, for public good—can apply to both for-profit and nonprofit organizations. Philanthropy is what Victoria’s people are interested in (though they have not been taught to use the word—perhaps Victoria should suggest it?).
BY Lynne Twist
ON June 20, 2016 07:08 PM
Thanks so much, I use the term SOCIAL PROFIT to refer to the work in our sector because that is what we generate—a social profit for all. And one can spell profit two ways: PROFIT and PROPHET. We are also the social PROPHETS of our time—standing for a new future and bringing it in to existence. Thanks. Lynne Twist. Author of The Soul of Money
BY Susan Slesinger Ulevitch
ON June 20, 2016 07:31 PM
Lynne, am surprised and pleased to meet up on this site. My daughter sent me article because of my constant bemoaning the use of the term ‘non-profit’ to be a catch-all for all kinds of organizations. After reading these comments I think there are two different jobs/work/tasks etc being discussed: providing services or programs and raising money (i.e. philanthropy). My thoughts above refer to the former; ‘doing’ the work. Philanthropy supports or funds the work. Don’t like non-profit for either. All the best to you,
BY Brock Leach
ON June 21, 2016 03:42 PM
I’m inclined toward the idea of “Social Advancement” organizations or enterprises as the term implies not just that there’s some “impact” but actual progress in improving lives. As others have pointed out, the biggest challenge for those of us who lead “non-profits” is to define ourselves and our success first in human advancement terms as opposed to funding terms. In fact many of the most successful “non-profits” operate what amount to profit-making ventures that fund their social advancement missions. That’s as it should be, but it doesn’t comport with a non-profit label.
BY Kurt Schoch
ON July 12, 2016 09:41 AM
How about simply “Human Services”? It shouldn’t matter whether the organization is legally or tax-wise labeled “non profit,” meaning no excess revenue inuring to anyone; it all goes back to the organization. I agree with many here - let’s be known by what we do, not our legal status.
BY George McCully
ON July 12, 2016 09:48 AM
The reason “Human Services” doesn’t cover all of philanthropy (private initiatives for public good” is that there are two additional fundamental fields of philanthropy: Nature (the environment) and Culture (what humans have made and thought—arts and education). Some add a third: “Promoting Philanthropy”—e.g. what community foundations and donor-advised fund sponsors do.
The key for linguistic factual accuracy is to separate out philanthropy from “nonprofits”—only 1 in 10 nonprofits are philanthropic.
BY Susan Slesinger Ulevitch, MSW '69
ON July 12, 2016 11:10 AM
I agree with Kurt; about using Human Services/Arts/Museum/Hospital (and on and on) for the agencies/organizations that ‘do’ the work and provide the services to people and communities. And, leave the word philanthropy or fundraising or endowment or whatever ... to those that provide the funding. The 2 spheres are different entities ... and their concerns, challenges, professional knowledge base, training, education, etc are ‘totally’ different. It does not make sense nor is good for the direct service providers to lump together such very different types of work. Social services and mental health, etc gets lost in the glare of philanthropy.
BY Wendy Bradley
ON July 13, 2016 03:43 PM
Delighted to see this article. Nearly a decade ago I began calling non-profits “social-profits” not to be clever, but because I was finding people were having a hard time figuring out how to effectively design their organizations based on what they were NOT trying to achieve. And as importantly, board members, often coming from the for-profit private sector, and the non-profit’s staff themselves, didn’t even realize they had a problem.
Hence the experiment to change the social-sector design paradigm from one of non-profit to one of social-profit.
It’s working!
A for-profit’s bottom line is financial return. Clear as a bell. A social-profit’s bottom line, as Drucker articulated years ago, is a change in the human condition… in our capacities, health, education, environment, etc.
While we must thoughtfully design strategies and partnerships to keep us financially healthy, when we state our bottom line is one of social-profit, it gives us a whole new platform and mandate from which to organize, design, measure, and report on our efforts.
It’s more than semantics. It’s design-thinking to fit the bill. Bring it On!
BY Cindy Courtier
ON August 3, 2016 10:34 AM
What matters most: What we as professionals think, or what our donors believe when they hear the term?
BY Brad Boyd
ON August 9, 2016 02:58 PM
I prefer “community-profit organization.”
BY Weixiong Zhang
ON January 11, 2018 08:19 AM
Names of organizations are very important for it to be viewed by the public. And sometimes misleading name might cause wide discussion and arguments among people and media. So the name of organizations should be precise and reflect their idea and goals. Take an example of my experience, on websites there are always debates about feminism. Some people don’t support it since the name only reflects the their protection of female rights ignoring the fact that many rights of males are violated as well and thus suggest that the name should be changed to “equal rights” rather than “feminism”. Other group explains that “feminism is equal to ‘equal rights’”. I regard this instance as a very suitable case to illustrate this thing.
BY Najmah Thomas
ON April 4, 2018 07:44 AM
I also prefer “community profit organization”.
BY Purushotham Joshi
ON April 24, 2018 04:01 AM
The topic of discussion is very much relevant, and i agree with most of suggestions, that a better word, for what the sector does is needed, and consensus and usage should happen
Not for profit, is only designed from Tax perspective, and intention of not being profit making , and serves that purpose well and let it be, but it does not define the intended purpose.
SOCIAL PROFIT, looks to be a good option, since in essence most not profits work to make benefits, or advancements or difference is really a social profit, and can bring a change in usage of language to not link profits only to money, but there are several other profits too (just like profit in health, environment, emotion, etc)
BY George McCully
ON April 24, 2018 06:12 AM
With respect, it is simply not true that “most not profits work to make benefits, or advancements or difference [which] is really a social profit….” The evidence is each State’s IRS Master File of tax-exempt entities, which may be downloaded from the internet—I urge you to check it out, page by page, maybe for any three or more randomly selected pages.
The statutory criterion for tax-exemption is whether or not its existence is in the public interest, which is short of actually conferring public benefit. Thus medical doctors’ clinical practices may be tax-exempt and their profits distributed to the doctors where they are taxed as personal income. Condo associations, self-serving social clubs, real estate trusts, teachers retirement funds, self-serving professional and trade associations, alumni associations, etc., etc., etc. are all tax-exempt and in our mutual interest to exist, but they are not required to confer actual benefits on society. Public charities (philanthropy—private initiatives for public good) are required to benefit society in designated ways, and to raise their funds from the public, and so have the additional privilege of tax-deductibility of those donations by the donors.
BY C Courtier
ON April 24, 2018 07:25 AM
I think if you would ask the average donor to name several non-profit organizations, 0% of them would include real estate trusts, trade and alumni associations and clinics. But you would get a great list of health, education and social service organizations. Why take away an identity that serves a purpose?
BY Susan Ulevitch
ON April 24, 2018 07:44 AM
Please call organizations in a way that identifies ... and respects ... what they do. Social services, mental health, education, youth development, etc. Tax status is not defining and certainly not what should be highlighted.
BY George McCully
ON April 24, 2018 07:44 AM
First, I’m not proposing taking anything away. What I suggest is that we use terms accurately. All charities (philanthropies) are “nonprofits”, but all—in fact, the great majority)of “nonprofits” are not philanthropic. All bananas are fruits, but only a small percentage of fruits are bananas. So call fruits fruits, and bananas bananas.
The advantage of ending this confusion with “nonprofits” is that we can build a culture of philanthropy—“private initiatives for public good”—in America, which we had when we were founded; but we cannot build a culture of “nonprofits”.
BY Susan Slesinger Ulevitch
ON April 24, 2018 07:47 AM
Philanthropy is not the same as direct service. Or even research. I love the recent comment about fruits and bananas. Don’t lump very very different organizations into one (tax related) term. It’s not all about profit; or is it?
BY Susan Slesinger Ulevitch
ON April 24, 2018 07:50 AM
Philanthropy is not the same as direct service. Or even research. I love the recent comment about fruits and bananas. A foundation is one thing; an agency providing service or programs is another. Don’t lump very different organizations into one (tax related) term. It’s not all about profit; or is it?