A common aphorism, whose ascribed origins range from Marshall McLuhan to a cartoon caption, holds that fish don’t know they’re in water. How could they? McLuhan famously asked, they have nothing with which to compare it.
Taking this idea a bit further, psychologist James C. Coleman wrote that so complete is its influence, that any individual deeply immersed in his or her own culture will scarcely be aware of it as a shaping force in their lives.
This observation could easily be applied to today’s American nonprofit sector.
As the first twenty years of the 21st Century rapidly come to a close, the American nonprofit arena is at a crossroads, but often seems to be largely unaware of it. And yet numerous changes both internal and external to the sector strongly suggest that by 2030 it could very likely bear little resemblance to its present form, and possibly even to its present function.
While the realm of American nonprofit organizations seems today to be intensely focused on a limited number of narrowly defined immediate issues, broader, more ultimately impactful challenges are looming. It is, for example, larger than it has ever been, and continues growing at a prodigious rate. It is more varied, better organized, and better funded than any of its counterparts anywhere else on Earth. In addition to its substantial social and political influence, it holds considerable, growing, and unprecedented economic clout, responsible for 5.4% of the nation’s Gross Domestic Product in 2014, and accounting for 10.3% of the country’s private-sector workforce. But where will these trends lead? In an arena where a limited number of outsized entities dominate not only fund-raising but the distribution of assets, how will ever-increased competition for resources play out? At a time when some of the demarcations traditionally separating the nonprofit from the for-profit worlds are showing a new permeability, will nonprofits discover and capitalize upon characteristics that make them better suited for the tasks at hand, or will they find themselves squeezed out by more nimble competitors?
At the same time, the universe around the sector is changing. Nonprofits in 2017 are frequently closer to and more dependent upon government than ever before. But the politics of the era are amongst the most divisive in the nation’s history, the fundamental national consensus fraying as Blue States and Red States seemingly have less and less in common each week. In this, the nonprofit arena, all the while contending with the contradictions inherent in its “dial identity” nature -nonprofits are private agencies, but largely operate in the public sphere; they are not-for-profit, but are required to operate in a for-profit economy; they often draw heavily on volunteers, but are expected to exhibit business-like levels of professionalism- also often finds itself stranded in the No Man’s Land between the two sides’ respective front lines. Not only are funding streams increasingly politicized, but both the tax-exempt status and donation deductibility of a number of nonprofits are being challenged on various fronts. And as familiar boundaries between the conventionally apolitical nonprofits –the 501(c)(3)s- and their often über-political (c)(4) cousins are blurring or being questioned, will that make the sector more or less vulnerable to the cultural struggles around it?
Meanwhile, for the first time ever, major financial underwriters have begun demanding that nonprofits demonstrate measurable evidence of performance…a challenge the sector as a whole is far from ready to meet.
At more of a ground level, it has traditionally been to the sector’s advantage that roughly three quarters of all households in America give to charity. But the developing giving patterns of the post-Baby Boomer generations are showing signs of differing significantly from those of their forbearers, as are their work patterns, marriage and reproductive rates, and settlement patterns.
And while all this happens, technology marches on, promising to change forever the relationship between nonprofits and their donors.
Yet through all of this, the sector often seems to be blithely swimming along, completely focused upon the moment, and unaware of and unconcerned with the greater long-term challenges to its familiar environment.
Given these dynamics, the nonprofit realm effectively has two choices. It can bob along like a cork upon the waves, allowing the prevailing currents to take it where they will, or it can drop a rudder, set a sail, and be an active participant in the shaping of its own future.
But what should that future look like? Unfortunately, while some futurists foresee an expanded role for nonprofits in a decidedly altered American economy, there are precious few other places to look for answers. The nonprofit arenas of the rest of the world, under-developed in many places and frequently looking to the U.S. as an example, offer few contextually workable ideas. Similarly, neither the time machine nor the crystal ball having yet been perfected, we cannot go forward to see how it will all turn out and simply aim for the best possible target…and lacking the familiar comic book trope of easily accessible alternate universes, there is no window through which we might peer to get a glimpse of how an array of different possibilities might look.
But we can look backward, to see how we got to where we are, to understand the forces that shaped the sector, to gain a renewed appreciation for its core raison d’être, and thereby to make a better-informed decision about where we wish to go.
Unfortunately, as Americans, we are frequently ill-equipped for that look into the rearview mirror, because as Americans, we tend to live in primarily in a culture of the present. If there is any time frame other than the “now” that at all seems important to our national psyche, it is the future. Indeed, the rejection of the old and the celebration of the new has been called the true myth of America.
As a people, our timeframes tend to be short; our points of reference, fairly close at hand. We tend to deal with what is, rather than what was.
One result of this perspective is that we can be, as Irving Howe observed, notorious for our collective indifference to the past.
This is not to merely rehash Santayana’s warning about being doomed to repeat the errors of the past if we ignore its lessons. Things have changed too much for us to ever go backwards, and neither the missteps of yesterday nor their context are likely to recur. Rather, it is to take heed of David McCullough’s observation that trying to plan for the future without a sense of the past is like trying to plant cut flowers: lacking roots, they just won’t take.
So while being generally free from the shackles of history may have been an overall advantage to our development as a nation, our frequently absent sense of history often leaves us at a disadvantage when it comes to understanding the forces that shaped many of the institutions that impact us. It limits not only our understanding of what they do, but more importantly, why they do it.
But as David C. Hammack has noted, literally every question concerning U.S. nonprofit organizations and America’s nonprofit sector as a whole has a historical dimension. As it exists today, our nonprofit arena is highly complex, and we can best understand that complexity if we recognize that it is the product of a long and equally complicated history.
Many Americans -not only everyday folk who, although the overwhelming number of us have frequent contact with nonprofits, rarely ever even think about the sector’s existence, but also practitioners and those studying for a career in the field- know little or nothing about where it all came from. Like people standing on a dock watching a ship slowly disappear over the horizon but unable to see any farther, for most of us the limits of our vision are those described by recent memory. We tend to look at the contemporary version of the nonprofit arena and sort of make a quiet assumption that it is a fairly recent development and/or that it has essentially always been as it is today. Little thought is given to its true origins, its founding DNA, the challenges it faced, or the adaptations it made to survive…all of which could help inform the course we set for its future.
This said, it must also be added that the history of the nonprofit realm in America is not a simple line, one string of events running unbroken from the nation’s founding until today. Instead, it is more of a braid, with distinct threads –some of them not originally focused on nonprofits at all- interweaving with one another over time. As with a braid, the end result is stronger than any one fiber would have been, but it requires unravelling and separating out those strands to make sense of the whole picture. More important, perhaps, the developmental trajectory of nonprofits also hasn’t been a straight line. Rather, its path over the years might be compared to that of a pinball, moving straight and building up momentum for a time, but then ricocheting off some event or social trend and taking off in a new direction altogether. It is also worth remembering that the events that influenced and shaped our modern nonprofit arena did not take place in a neat sequential order. History always being more of a stew than a series of separately prepared and served dishes, it was not always the case that Event A was completed and done before Events B or C began or took hold.
All of these dynamics had an impact, and our nonprofit community is as much a product of our history as it has been an actor in our history.
And so we are going to attempt in these next pages to unravel this history, focusing on primary events or developments that combined to create the American nonprofit sector as we know it. Our thesis is that while, clearly, much has happened over the course of history involving the entities we currently know as “nonprofits,” the sector as it exists today is the consequence of not only certain key national developments, specific events and trends, but also of a particular gene in its DNA, something that was there from the beginning and emerged time and again over the course of two hundred years, its influence helping to shape this spirited but often awkward arena.
In keeping with this approach, this work is offered as an overview, primarily intended to give nonprofit practitioners, and senior undergraduate and graduate students studying nonprofit management and related subjects, a basic historical context for their work. It is not intended to be an exhaustive year-by-year, or even a decade-by-decade account of the sector’s history. Our purpose is not to recount the varying fortunes of the sector under this administration or that one. Rather, we set out to trace and tell the stories of the key themes and turning points, the influences that came from a variety of quarters, and how the sector’s genetic heritage shaped its reaction to these shifting tides. It should also be added that while the account offered in these pages is generally chronological, moving overall from pre-colonial times toward today, there are places where, for contextual sake, the discussion switches back in time to give the reader a fuller appreciation of the subject being discussed. The reader is also directed to the footnotes, many of which contain informative and useful information that did not properly belong in the body of the narrative. Finally, for those wishing more detail than may be presented here, readers are directed to Robert H. Bremner’s American Philanthropy, the many excellent works of Peter Dobkin Hall, David C, Hammack’s outstanding survey article on nonprofit organizations in American history, , and, regarding the development of religion and its influence in the United States, Sydney E. Ahlstrom’s Religious History of the American People.
Lester Salamon, Director of the Johns Hopkins Center for Civil Society Studies, has repeatedly called the American nonprofit arena the “resilient sector,” a tribute to its ability to change with the times and find ways to stay relevant to our national psyche and our national purpose. It is our hope that the facts and analysis offered here will help both the nonprofit practitioner and especially the student of nonprofit management –those who will be the sector’s leaders in the years to come- reach a better understand of the nonprofit community’s core identity and evolution, so that they may help guide it to its best possible future.