Fundraising for Social Change, 7th Edition

chapter 1 Nonprofits and the Money They Raise

In this chapter I review some basic understandings about the size and scale of the nonprofit sector, important changes, and some things that never change. The word nonprofit is used to distinguish organizations that work for the public good and are not obligated to shareholders or owners to deliver a profit. In fact, organizations that are afforded nonprofit status by the Internal Revenue Service are subsidized by tax exemptions, financial donations, and the free labor of volunteers, all of which are designed to let them focus on fulfilling their mission rather than seeking profits. Even though businesses and corporations can work for the public good, they must operate profitably in order to stay in business.

Over the past forty years, the word nonprofit has gradually replaced the word charity, as more and more nonprofit organizations do work that is not strictly “charitable,” such as community organizing, advocacy, arts programming, or environmental protection. The word charity also carried a whiff of noblesse oblige—a sense of “fortunate” people helping the “less fortunate.” This frame has largely been rejected by progressive nonprofits, which seek to work “with” people rather than “for” them.

Many have argued that the term nonprofit, too, is an unfortunate one, as it describes an entire sector by what it is not; they have suggested using the term community benefit organization (CBO) instead. In most countries other than the United ...