James A. Smith

How to Speak and Think Nonprofit
James A. Smith
Naming the sector
1. Nonprofit sector and Not-for-Profit Sector
3. Charitable sector / Eleemosynary Institutions
4. Benevolent Institutions
5. Philanthropic sector
6. Voluntary sector, PVOs
7. Third sector
8. Independent sector
9. 501(c)3 organizations
10. Tax-exempt entities
11. Civil society, CSOs
12. Social sector, Social Economy
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
occasionally used in Britain
in 19th Century
•Wider international usage
with creation of League of
Nations and UN
•Suggests autonomy in
determining mission and
First meeting of the League of Nations Assembly, 1920
•But NGOs often rely on
government funds
3. Charitable Sector / Eleemosynary
•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
•Entered English usage in 17th
•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
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 Entities
1. 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 Entities
16. 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
A Working Definition
•Private Organizations – structurally and institutionally separate
from government
•Self-governing – clearly established internal governance
•Voluntary Organizations – membership and participation is
•Nonprofit distributing to owners, members, trustees or directors
•Pursuing a public purpose
Philanthropic Founding Fathers and Mothers
Margaret Olivia Sage
Andrew Carnegie
John D. Rockefeller
Frederick Goff
Large Grant-Making
Russell Sage
Carnegie Corporation
of New York (1911)
Foundation (1913)
Post-Civil War Innovations
•Addressing problems of industrialization,
immigration and the underdeveloped South
•Charity Organization Movement
•Scientific Philanthropy
Reconstruction school
•Trustees of the General Education Board
Early 19th Century Legal Innovations
Painting by Robert Clayton Burns depicting Daniel Webster and the Dartmouth College Case
Colonial Self-help
Tocqueville’s Journey
English and European Legal Contributions
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…
Medieval Origins of the Charitable Sector
Leper hospital in Chichester, founded 1118
Medieval Origins of the Charitable Sector
Representative of the interior of a medieval hospital
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