There Is Nothing “Non-Profit” About Nonprofit Organizations

In 2006, I founded and continue to run Music For Everyone (MFE), a “nonprofit” organization with a mission to cultivate the power of music as an educational and community-building tool in Lancaster County, PA. Given that I had no previous experience in this world, my learning curve over the past 18 years has been long and steep. The most important lesson learned is that there is nothing “non-profit” about running a nonprofit organization.

While nonprofit might be an accurate description of our tax status, the term communicates nothing about what we do. Specifically, MFE raises resources and applies them as strategic investments to benefit our community.

This is not an insignificant distinction. Words and terms matter, particularly when required to communicate to the public, donors, and foundations why MFE exists. Thus, I’ve come to agree with those who believe a more descriptive and effective term to use is “Community Benefit Organization” (CBO).

That said, CBOs absolutely should be about “profit,” albeit a vastly different type of “profit.” In other words, the “profit” motive that drives CBOs is measured differently than a business.

Businesses measure their success in terms of financial profits and returns on investment.

Profits = “Success”

A more accurate description of “success” for CBOs relates to their effectiveness in leveraging their resources for positive community impact. While a CBO must generate profits to do the important things they do, the amount of profit is not the true measuring stick of organizational effectiveness. Profits and resources generated are simply a tool used to further the organizational mission. Rather than monetary profit, it is community impact that is the standard of success. The more money and resources raised and effectively and efficiently leveraged, the greater the CBO’s community impact.

Profits = Community Impact = “Success”

Using the term “nonprofit” can be counter-productive and harmful because the term itself conjures and implies ideas, impressions, confusion, beliefs, and attitudes that can negatively impact organizational effectiveness. For example, there is a nagging societal perception that because CBOs are “nonprofit,” they are not as serious and important a business as a “real” (for-profit) business.

Nothing could be further from the truth. In fact, CBOs and the work they do is exponentially more serious and important because their mission is to tackle a multitude of challenging societal and community issues, from homelessness and public health to education and social justice, to identify only a few. These are all critical issues with impacts that go beyond simply generating dividends for investors.

At the end of the day, it’s straightforward. CBOs must be run like for-profit businesses because if they don’t generate profits and resources, they can’t do all the vitally important things they do to address the many serious and challenging issues we face as a society.

In other words, there’s nothing “non-profit” about nonprofit organizations.