What’s in a name?

In the nonprofit world, we seem to have a schizophrenic approach to our identity. Can a category diverse as the “nonprofit sector” really share a unified identity?

The most commonly known nonprofits utilize the cherished 501(c)3 status, valued because of its ability to accept tax deductible donations. According to the IRS, 501(c)3’s can be religious, educational, charitable, scientific, literary, testing for public safety, to foster national or international amateur sports competition, or prevention of cruelty to children or animals organizations. However, outside of 501(c)3’s, there are a variety of other nonprofit distinctions.

According to the IRS Publication 557, in the Organization Reference Chart section, the following is an exact list of 501(c) organization types and their corresponding descriptions.

  • 501(c)(1) — Corporations Organized Under Act of Congress (including Federal Credit Unions)
  • 501(c)(2) — Title Holding Corporation for Exempt Organization
  • 501(c)(3) — Religious, Educational, Charitable, Scientific, Literary, Testing for Public Safety, to Foster National or International Amateur Sports Competition, or Prevention of Cruelty to Children or Animals Organizations
  • 501(c)(4) — Civic Leagues, Social Welfare Organizations, and Local Associations of Employees
  • 501(c)(5) — Labor, Agricultural, and Horticultural Organizations
  • 501(c)(6) — Business Leagues, Chambers of Commerce, Real Estate Boards, etc.
  • 501(c)(7) — Social and Recreational Clubs
  • 501(c)(8) — Fraternal Beneficiary Societies and Associations
  • 501(c)(9) — Voluntary Employees Beneficiary Associations
  • 501(c)(10) — Domestic Fraternal Societies and Associations
  • 501(c)(11) — Teachers’ Retirement Fund Associations
  • 501(c)(12) — Benevolent Life Insurance Associations, Mutual Ditch or Irrigation Companies, Mutual or Cooperative Telephone Companies, etc.
  • 501(c)(13) — Cemetery Companies
  • 501(c)(14) — State-Chartered Credit Unions, Mutual Reserve Funds
  • 501(c)(15) — Mutual Insurance Companies or Associations
  • 501(c)(16) — Cooperative Organizations to Finance Crop Operations
  • 501(c)(17) — Supplemental Unemployment Benefit Trusts
  • 501(c)(18) — Employee Funded Pension Trust (created before June 25, 1959)
  • 501(c)(19) — Post or Organization of Past or Present Members of the Armed Forces
  • 501(c)(21) — Black lung Benefit Trusts
  • 501(c)(22) — Withdrawal Liability Payment Fund
  • 501(c)(23) — Veterans Organization (created before 1880)
  • 501(c)(25) — Title Holding Corporations or Trusts with Multiple Parents
  • 501(c)(26) — State-Sponsored Organization Providing Health Coverage for High-Risk Individuals
  • 501(c)(27) — State-Sponsored Workers’ Compensation Reinsurance Organization
  • 501(c)(28) — National Railroad Retirement Investment Trust

Do 501(c)3 organizations really have much in relation to recreation clubs, credit unions, or lobbying organizations? Is the term “nonprofit” doing us a disservice to the incredible work that 501(c)3’s accomplish? Should we consider a new way of framing philanthropic work?

3 thoughts on “What’s in a name?

  1. Great question Kevin….I'd argue that the term "nonprofit" doesn't have as much cachet as we would like to think. To be lumped into a group with a name containing a prefix that means "not or lacking" can cause a subliminal reaction to our work. What kind of feeling do these words give you? noncompliance, nonissue, nonpayment, nonprofessional, non-sequitur, etc. Maybe it's time for some institutional rebranding?Reed

  2. I love this question, Kevin, and it's one I've been asking of myself and others for some time. I would add a couple pieces to the conversation. First, in the "for profit" world, there isn't stigma attached to desiring to make enough money to live comfortably. In the "non profit" world, though, it's seen as a negative if you don't buy into the "Well, we're not in this for the money!" mindset. I think that needs to change. The "non profit" sector (or whatever we should be calling it) needs to attract talent, and like it or not, the most effective way to attract talent is to pay for it. While it's true that I don't think any of us should be in this for the money, I don't think it's wrong to have career and financial goals. We need to dump that stigma. Second, "non profit" defines us negatively, in that we're defined by what we aren't. We DO NOT exist to make a profit. I think we need to flip the script and define ourselves positively, i.e., what is it that "non profits" contribute? What value do we add? I've heard some use the term "social profit," and I think that's a good start.

  3. I think you both made great points. For one, the "non" implies a negative rather than a positive. Secondly, it accentuates the fact that money is not an objective. However, the sector is professionalizing rapidly and really salaries are becoming more competitive.I don't think the phrase nonprofit really inspires the work we do. As more business become socially themed, do we find a new way to frame organizations that produce social good?

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