unity

Nonprofit? Really, is that the best name we can come up with?

posted by
Mark Hager, Ph.D.
,

Associate Professor,

ASU School of Community
Resources & Development

This topic gets trotted out a lot, so maybe that just means it's worth having again. We discuss it in one of my graduate seminars, but a blog post is probably a good place to gather up people's reactions in the comments section. Really, I'd love to hear your thoughts.

In my last blog post, I suggested that the idea of "sector" has taken hold, which means that we need a way to refer to all the organizations that fall inside such a sector. Clearly, to me anyway, the frontrunner is "nonprofit organizations" operating in a "nonprofit sector." The word nonprofit is in the Lodestar Center's full name, it's in my job title, and it's in the name of my professional association. If our goal is to communicate clearly, then nonprofit sticks because most people know what we mean when we use it.

The problem is that this isn't always the case. At a dinner party, when you tell somebody that you work for a nonprofit organization, there's a fair chance that your drinking buddy will react something like, "Oh, yeah, a nonprofit organization. Those things that can't make a profit." Well, no... the defining characteristic of the nonprofit organization is that it returns all of its surplus income ("profit") to furthering its mission, rather than feathering the pockets of owners. But the moniker "nonprofit" doesn't exactly make that clear. There are at least three shortcomings with the name: (1) it defines the sector in economic rather than social terms; (2) it does so in a confusing way; and (3) it approaches these organizations in terms of what they are not or what they cannot do, rather than what they are and what they seek to add to our lives.

Can we do better?

Well, there are a host of alternatives, some of which already have some currency. One alternative is to go with the U.S. federal term: the tax-exempts. A defining characteristic of the "sector" we're trying to name is that they don't pay federal income tax, so tax exempts, or exempt entities, sums it up pretty well. You hear these terms regularly in regulatory and legal contexts. However, it's a bit dry, and not generally used outside of those circles. Maybe we should adopt these as preferred terms?

Sectorness: What does "nonprofit" do for us?

posted by
Mark Hager, Ph.D.
,

Associate Professor,

ASU School of Community
Resources & Development

If you're reading this, you've probably already been indoctrinated into the idea that nonprofit has some particular useful meaning. Not everybody thinks so, or has thought so for very long.

The quibble is that this "sector" is really a whacky collection of radically different organizations. Who would put hospitals in the same bucket as credit unions, and then throw operas in, too? Who thinks social service organizations should fly under the same banner as those that organize the public for political change?

So, these things are all defined under one section of a messy tax code. Is that really a reason to study, talk about, and define a professional identity of a "nonprofit sector?" Better maybe, for the different pieces to keep to themselves, with their own methods, language, and professional development programs? Maybe. My favorite historian, Peter Dobkin Hall, wrote a defining essay in one of his books that describes the "invention" of the nonprofit sector in the United States. It isn't the missions that have so much been invented, mind you — it's the idea of collective sectorness.

Look at it this way. The term "philanthropy" has been in American parlance for a long time, referring to individual action, charitable behavior, and (more recently) the professional field of grantmaking foundations. Google Labs has a cool tool where you can map usage of words in published materials. The map for American English usage of "philanthropy" is below. The term has seen a surge over the past decade, but it's nonetheless about half as popular as it was in 1850. Anyway, the term has been around for a long time. "Philanthropy" is roughly as common now as it was 200 years ago.

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