How to Speak and Think Nonprofit

James A. Smith

1. Nonprofit sector and Not-for-Profit Sector

2. NGOs, QUANGOs, INGOs

12. Social sector, Social Economy11. Civil society, CSOs

10. Tax-exempt entities

3. Charitable sector / Eleemosynary Institutions

7. Third sector

5. Philanthropic sector

9. 501(c)3 organizations

8. Independent sector

6. Voluntary sector, PVOs

Naming the sector

4. Benevolent Institutions

1. Nonprofit sector, Not-for-Profit Sector

•A legal term

•Non-distribution of profits

•A term of intent

•No profit-seeking

•An economic construct

•U.S. System of National Accounts

2. NGOs, QUANGOs, INGOs

•Nongovernmental occasionally used in Britain in 19th Century

•Wider international usage with creation of League of Nations and UN

•Suggests autonomy in determining mission and strategy

•But NGOs often rely on government funds

First meeting of the League of Nations Assembly, 1920

3. Charitable Sector / Eleemosynary

•Caritas

•Eleemosynary

suggesting traditions of

almsgiving

Sandro Boticelli, Three Graces

4. Philanthropic Sector•Greek word origin, meaning love of humankind

•Seneca, Cicero and other Stoics wrote about gift relationships

•Entered English usage in 17th Century

•In late 19th Century American usage suggested efforts to be more scientific in giving, seeking root causes of social ills

Branches of Knowledge, woodcut, 1535

5. Voluntary Sector, PVOs

•Evokes oldest traditions of self-help, volunteer activity, and Tocquevillian habits of free association

•About freely chosen membership, thus distinct historically from family and clan

•Include fraternal associations, ethnic self-help groups

6. Third Sector

•Gained prominence with 1973-74

Commission on Private Philanthropy and

Public Needs (Filer Commission)

•Term originally coined by Amitai

Etizioni

•Suggests interaction within a mixed

society, business or market (the first

sector) and government (second sector)

7. Independent Sector

•Independent Sector founded in

1980 merging the National Council

on Philanthropy and the Coalition of

National Voluntary Organizations

•Suggests that sector is privately

organized (true) and autonomous

(mostly false)

8. 501(c) Organizations

•U.S. tax code defines 501 (c) 3’s in terms of both the exemption from taxes and the deductibility of donations

•A general assumption that these organizations provide public benefits that government does not, cannot or will not

9. Tax Exempt Entities1. 501(c)(1) : Corporations organized under an act of

Congress

2. 501(c)(2) : Title-holding companies

3. 501(c)(3) : Religious, charitable and similar

organizations

4. 501(c)(4) : Social welfare organizations

5. 501(c)(5) : Labor and agricultural organizations

6. 501(c)(6) : Business leagues

7. 501(c)(7) : Social and recreational clubs

8. 501(c)(8) : Fraternal beneficiary societies

9. 501(c)(9) : Voluntary employees’ beneficiary

societies

10.501(c)(10) : Domestic fraternal beneficiary societies

11.501(c)(11) : Teachers’ retirement fund

12.501(c)(12) : Benevolent life insurance associations

13.501(c)(13) : Cemetery companies

14. 501(c)(14) : Credit Unions

15. 501(c)(15) : Mutual insurance companies

9. Tax Exempt Entities16. 501(c)(16) : Corporations to finance crop operation

17. 501(c)(17) : Supplemental unemployment benefit trusts

18. 501(c)(18) : Employee-funded pension trusts

19. 501(c)(19) : War veterans’ organizations

20. 501(c)(20) : Legal services organizations

21. 501(c)(21) : Black lung trusts

22. 501(c)(23) : Veterans’ associations founded prior to 1880

23. 501(c)(24) : Trusts described In section 4049 of ERISA (c)

24. 501(c)(25) : Holding companies for pensions and so on

25. 501(d) : Religious and apostolic organizations

26. 501(e) : Cooperative hospital service organizations

27. 501(f) : Operating educational organizations

28. 521 : Farmers’ cooperatives

10. Civil Society•Scottish Enlightenment heritage, Adam Ferguson’s 1767 volume An Essay on the History of Civil Society

•Adopted by those trying to build democratic institutions in Eastern Europe and Latin America in 1960s and 70s

•As civil society has grown globally, term has become more common in US

•Sector concerned with social capital

A Working Definition

•Private Organizations – structurally and institutionally separate from government

•Self-governing – clearly established internal governance procedures

•Voluntary Organizations – membership and participation is noncompulsory

•Nonprofit distributing to owners, members, trustees or directors

•Pursuing a public purpose

PrototypicalOperating

Foundation:

Russell SageFoundation

(1907)

Philanthropic Founding Fathers and Mothers

Prototypical Community Foundation:

ClevelandFoundation

(1916)

Andrew Carnegie John D. Rockefeller

PrototypicalLarge Grant-Making

Foundation:

Carnegie Corporationof New York (1911)

Rockefeller Foundation (1913)

Margaret Olivia Sage

Frederick Goff

•Addressing problems of industrialization, immigration and the underdeveloped South

Post-Civil War Innovations

•Charity Organization Movement

•Scientific Philanthropy

•Trustees of the General Education Board

Reconstruction school

Early 19th Century Legal Innovations

Painting by Robert Clayton Burns depicting Daniel Webster and the Dartmouth College Case

Colonial Self-help

Tocqueville’s Journey

The Statute of Charitable Uses Act (1601)

An Acte to redresse the Misemployment of Landes Goodes and Stockes of Money

heretofore given to Charitable Uses Whereas Landes Tenementes Rentes Annuities Profittes Hereditamentes,

Goodes, Chattels Money and Stockes of Money, have bene heretofore given limitted appointed and assigned, as well by the Queenes most excellent Majestie and her moste noble

Progenitors, as by sondrie other well disposed persons, some for Releife of aged impotent and poore people, some for

Maintenance of sicke and maymed Souldiers and Marriners, Schooles of Learninge, Free Schooles and Schollers in

Universities, some for Repaire of Bridges Portes Havens Causwaies Churches Seabankes and Highwaies, some for

Educacion and prefermente of Orphans, some for or towardes Reliefe Stocke or Maintenance of Howses of Correccion, some for Mariages of poore Maides, some for Supportacion Ayde and

Helpe of younge tradesmen Handicraftesmen and persons decayed, and others for reliefe or redemption of Prisoners or

Captives, and for aide or ease of any poore Inhabitantes concerninge paymente of Fifteenes, setting out of Souldiers

and other Taxes…

English and European Legal Contributions

Medieval Origins

Leper hospital in Chichester, founded 1118

Medieval Origins of the Charitable Sector

Medieval Origins

Representative of the interior of a medieval hospital

Medieval Origins of the Charitable Sector

Medieval Origins of the Charitable Sector

The Hospices de Beaune

Three Graces and the Classical World

Byzantine mosaic

The Potlatch

Primate Social Relationships

Animal Instincts