Non Profit vs. Social Benefit

The Problem

I don’t like the term “non-profit organization.” I think it misrepresents 501c3 companies. I’ve found that upon hearing that I’m managin a non-profit performing arts organizations, a common reaction among members of my parents’ generation is “Oh, how nice that you don’t care about money,” or, “Oh, not a REAL business.” They don’t say these things, but I can see it cross their minds.

Any good business should want to grow, no matter its tax status. Some businesses exist to make the owner money, others to provide food for the needy, and others to provide entertainment, education, and a host of other goods and services. Does the company that provides food for the needy need money less than the ones that generate profit for the owner? No. With more money to the food organization comes more food, more workers, more awareness of their cause.

The point of the 501c3 Non-Profit organization is that it should PRIMARILY provide some benefit to society, and not — primarily — directly and monetarily benefit the employees. That’s not to say that there’s no money to be made in the non-profit sector, several heads of 501c3 organizations make six-figure salaries.

The Proposed Solution

It’s not the business model that’s the problem, it’s the name. The term non-profit refers to the model and not the purpose of the organization.

So let’s change it to social benefit organization.

These companies are formed primarily to do some good to others and not distribute the earnings to employees. Let’s let the world (as well as the organizations themselves) what they’re here to do.

I say tell the organizations themselves because I know there are 501c3s out there that have huge budgets, pay a lot of money, but the social benefits may be minuscule compared to the total budget. The PRIMARY goal is to benefit some area of society. An examination of this in the arts world may be the subject of a future post… after some research, of course.

What do you think? What’s in a name?