34 Responses to 6 Reasons to Use the Term “Community Benefit Organization”

  1. Hildy,

    I love this! I could change my blog name to communitybenefitorganizationlawyerblog.com. Maybe, CBO for short.

    I’m a CBO lawyer. Has a nice ring.



  2. Hildy: At the National Council of Nonprofits we know that one of our biggest challenges as a sector is public awareness. Thanks for shining a light on all the positives that a moniker such as, “community benefit organization” may afford. Jenny

  3. Hildy:
    I’m sold! This makes so much sense and could really help people understand better what these type of organizations do! I also like Ellis’ abbrevation of CBO, which would give us more charachters when tweeting than Nonprofits!

    What about 501(c)(6) that are trade associations that are nonprofits. They usually don’t exist for the benefit of the community at large but for a specific industry. Any thoughts on what those nonprofits should call themselves?

  4. I have a lot of dealings with trade, industry and professional associations. I too, used to feel that they were not there for the community but just for themselves, and thought that one I founded was the exception that way. Now I find that those that have done well facilitated strategic thinking have redefined themselves as existing for the community as well, and see their members as part of the community rather than in isolation. It has hugely improved their programs and education, and helped their advocacy, to have inclusive visions. For example, real estate associations now seem to realize that their members’ success is tied to home buyer and sellers having confidence in the system and the professionalism of their agents. If you put the consumer first in your vision, it really works!

    This community is NOT ready to call themselves CBOs, but at least some will see a role for themselves if they are invited when CBOs get together for community planning. So will progressive businesses and governments. Their participation can really help communities make gains towards their highest potential.

  5. Thanks very much for this – I am totally on board with ditching the nonprofit moniker due to the sensible reasons you outline but I think Community Benefit Organization is a tad awkward and – interestingly – does not actually represent all tax-exempt organizations in the clearest way. The question then, for me at least, is how to separate my org from all the for profits out there and still be positive and clear…

    Thanks for the thought provoking post. I’m off to delete the word nonprofit from my site! Think I will trade it for tax-exempt for now…


  6. Ellis: Glad to have your wheels turning! The word “charity” is another one that speaks of what “social change” evolved from – the caritas part, which is wonderful, but doesn’t tell the whole story of what we now do! (Which gets to the point Jennifer made – imagine the power if the National Council’s name itself bespoke the strength of all they represent!)

    Jeff and Jane – The question this raises for many organizations is “who are we here to benefit?” Just having that conversation is helpful, but then incorporating that into the moniker by which they self-identify is HUGE!

    Pollyanna Principle #1 is that we accomplish what we hold ourselves accountable for. If our name says that, right up front – that is powerful both for others to see, and for us to work to live up to.

    And Anna, your organization is absolutely about benefiting communities around the world. A community can be defined as the geographic area you are hoping to benefit and impact – and clearly the purpose of your organization is such benefit! We have seen organizations adopt “Humanity Benefit Organization” or “Social Benefit Organization.” I hope you will consider that, because the value of the work you are doing is far more than just the fact that donors get a tax deduction for supporting you!

    Thanks, all, for sharing your ideas!

  7. Hello Hildy,

    I like the term “Community Development Organization” and the reasons behind its potential use. One advantage I see with this reframing is it shifts the conversation from “how much is your overhead?” to “what is your benefit and how are you accomplishing it?”. That is a huge and important change in how we are perceived.

    I do wonder if there are any downsides to using the term “CBO” instead of “nonprofit”. We are nonprofits because our organizational founders, funders and stakeholders are not investing in our organization with the expectation of personal monetary profit (although admittedly, things like mission related investments and LC3’s are already blurring the lines). Our tax exemption and public trust comes partly from the fact that we are not making money off of helping people. In other words, it is a good thing we don’t make a profit because it allows/encourages people to freely give us money knowing it isn’t going for our personal gain, rather it goes to develop the community.

    While I like your point about inclusiveness, it does concern me slightly that for-profit organizations suddenly put themselves in the same category as nonprofit organizations. Because they have the advantage of returning a profit to stakeholders, they get more money, which they could then potentially use to out-market nonprofit “CBOs”. I think we then have a legitimate right to wonder if the money a for-profit CBO generates is fully supporting the public good or is it generating profit for shareholders.

    I am no huge fan of the term nonprofit – it’s broad, vague and not well understood by the general public. But, there is value in the fact that we aren’t in this for personal monetary gain.

    How do you think this fits with your framing of CBO?

  8. Hildy –

    I’m really glad to see that this topic is continuing…the blurred lines among private, public and nonprofit entities is what most of my research is based upon. Having worked in all three sectors, I’ve seen that people are becoming much more cognizant of the types of organizations they’re working in. You and I have already had a discussion on Bill Drayton’s plea to drop “nonprofit” and in return, I was able to use and share your videos with a number of my colleagues and students who believe that a “community benefit organization” or “social benefit organization” makes much more sense.

    In writing one of my more recent papers, I came across a book chapter that Evelyn Brody authored that has continued to make me think. She wrote:

    “[t]here has been no clear demarcation between the public, business, and nonprofit sectors through history, and variously
    changing mixed-sector industries are common…[c]onfoundingly, for taxonomists, once we add factors such as resource dependence, the pattern of firms looks more like a marble cake than a matrix. It no longer makes sense to ask a binary question like: Does a nonprofit corporation that receives all of its funding from government contracts belong in the nonprofit sector or the public sector?”

    That said, I think there is some benefit (albeit technical, perhaps) to not only demarcate the sectors, but also to keep words like “nonprofit” in the lexicon, if anything, to appease those who want to hear or know that the said organization is one of community benefit. The caveat, of course, is that organizations that aren’t 501(c)(3)’s (like 501(c)(6)’s, for example) aren’t socially or communally beneficial so much as they are just plain tax-exempt.

    However, I do think there’s a place for “community benefit organization” because it leaves no question as to what the organization does.

  9. It is BECAUSE we are nonprofit that we are a benefit to the community. We don’t focus on profit, we are concerned with people and communities.
    Changing the name is a good idea in theory, but it borders on Orwellian doublespeak. Nonprofit is only negative if you make it so. If you’re after profit, you’re in the wrong field.

  10. Hildy,
    Thank you! This is wonderful and sorely needed. Hopefully, by promoting this change the public will develop a better understanding of the community benefit sector and what it means to support it.

  11. Aaron, John and Matthew:
    Thank you all for the thought you put into your comments. I am concerned about the anti-business theme of some of the comments – the thought that somehow a for-profit might out-maneuver a “nonprofit” – or that having a “business” status directly equates with being ill-intentioned.

    If the true intent of a business is community benefit and the end result is that the world becomes the amazing place it is capable of being – does it matter if a “for-profit” or a “nonprofit” creates that change?

    As just one example (and directly to Matthew’s point above), many social entrepreneurial ventures have as their full intent “community benefit.” They have no interest in “profit” but have chosen to avoid tax exemption for the freedom-to-maneuver it brings. Such “businesses” operate much like any other community benefit organization (often even with owners scraping by in the same ridiculously undervalued way we have come to expect from a typical “nonprofit ED.”) Just like the standard “nonprofit,” these social entrepreneurial ventures both intend to do good work AND accomplish terrific things for our world.

    Unless you simply distrust the motives of anyone who chooses not to operate under the business conditions required for tax exemption, would you not agree that such a “business” has the right to call itself a “community benefit organization?”

    My concern, much to John’s excellent point above, is that we have created walls between “government” and “business” and “nonprofit” that, in fact, are frequently unclear and are clearly detrimental to our working together to create strong, vibrant communities. The only way we will accomplish more visionary, significant community change than this sector has accomplished in the past 30-40 years is if we find a considerably different way of linking arms with ANYONE who wants to create change. Walls defeat us.

    To the question of organizational competition with a for-profit, then, I cannot help but wonder if we are maintaining those walls out of fear for our own survival? And to any degree, large or small, that that is the case, how does that serve to strengthen communities? My concern is that the ultimate result of such survival-driven approaches is our maintaining a status quo that keeps organizations alive and perhaps even thriving, but undermines our ability to link arms across whole communities to create amazing places to live.


  12. Hildy
    I agree with all of your reasons – however, here’s a rub. Increasingly positive social goods are being produced by lots of kinds of organizations. Nonprofits are one. B corporations, L3Cs, clean tech, water innovation firms, and SOME pure commercial plays are others. Many of these produce community benefits. So two questions… First, within this diversifying market of social good producers is it MORE important than ever to be able to distinguish and value the unique role of nonprofit enterprises? Second, if so, is now the time to attempt to change the moniker? Would the term CBO further muddle things or would it be OK if all social good producers were understood as CBOs…?

    Thanks for raising the topic.

  13. Lucy:
    As the world of Community Benefit continues to shift and evolve, as more amalgams of organizational types and individual efforts blossom – I’m curious what ultimate aim is served by distinguishing between all of them?

  14. Hujambo from Tanzania! Good discussion.

    I agree with you, Hildy, that Community Benefit Organization is a *much* better moniker than nonprofit 😉 It certainly describes better what we do.

    That said, I’m definitely a proponent of the nonprofit tax status and believe, in response to Lucy’s comment, that it’s important to indicate those organizations who choose this path. I believe there is demonstrable integrity in an organization that chooses to reinvest 100% of its would-be profits into doing more good, rather than in the personal wealth of its employees. (Personally, while I believe strongly that nonprofit employees should be fairly and even generously compensated – which nonprofit laws certainly allow – I don’t believe wealth is a great motivator to do good. Many, I suppose, would disagree.) Perhaps each organization should be required to indicate what portion of profits are reinvested in the mission – nonprofits would be 100%CBOs, and those that reinvest less of the profits would receive a rating accordingly. Just a thought.

  15. Hildy,
    You are dead on. Here’s a quote from my post “Re-branding the Nonprofit Sector” where I admitted my distaste for the term nonprofit sector.

    “Hmmm… we exist solely to provide programs and services that are for public “benefit.” Could we be re-branded as the For-benefit sector? What about the For-charity sector? Or, the social sector? Would people think that we are only about socializing and networking and not improving our world community? What about the social change or improvement sector? I love the word “change”, yet I do not believe this label would work. What do you think? What should we be “for”?”

    Original post found at:

  16. Hildy,

    Can you point me to where you define a Community Benefit Organization? If this is all about definitions and branding, I guess I want to be clear on what the term means, as you have defined it thus far.

    From what I have read you seem to be casting a fairly broad net towards what is a CBO – although, maybe I am just not reading things right, or missed something.

    If it is a broad net, I do agree with Lucy’s comments, we seem to be further muddying the waters.

    So I guess the question for me is, “For what purpose do we make this change in language?” Initially I thought it was to help nonprofit organizations more easily communicate their message, leading to nonprofit organizations raising more resources – time, money and talent – to fulfill their mission.

    But, if anyone – like the local coffee shop who’s yummy lattes benefit my local community – can call themselves a “Community Benefit Organization” then I am not clear on the purpose of the rebranding.

    I do believe nonprofit organizations are indeed community benefit organizations. I also believe the term nonprofit isn’t a great one to use and I actually do like your term “Community Benefit Organizations”. But, if the goal is to help nonprofits improve communities than I am not a fan of letting anyone and everyone under the umbrella. Not b/c of profit motives, but because of branding (I’ll address profit in a moment). That’s why I want to know what is the current working definition of a CBO.

    So, that is the branding issue…as for your question, “Unless you simply distrust the motives of anyone who chooses not to operate under the business conditions required for tax exemption, would you not agree that such a “business” has the right to call itself a “community benefit organization?”” My answer is, I don’t know. Haha…

    I guess it’s okay, and I understand there are many for-profit ventures doing real community benefit work. But there is a slippery slope, in my opinion, when profit motive is introduced to social change work. For example, are investors in for-profit CBOs going to continue to be satisfied with smaller than average returns, or even losses, in what is the difficult operating environment of community benefit? And if not, what happens then? And what happens, if we are so broad in the definition, when a bad apple for-profit corp co-opts the name CBO with only profit in mind?

    These questions lead me to again want to know more about the “for what purpose” and the definition you are working with right now for CBOs. That will maybe clear up some of the questions I have about branding and about the profit motive.

    Thanks for raising this critical issue and thank you for facilitating a robust conversation! Best, Aaron

  17. Facing a deadline so I cannot jump in to the extent I would like. But I do want to briefly address Aaron’s question.

    My main purpose is that we replace the current word “nonprofit” with the term Community Benefit Organization (or Social Benefit / Humanity Benefit).

    From discussion of that change, however, has arisen the questions of who exactly might be encompassed by that term. Should it be every type of organization whose primary intent is community benefit? Or are we really just putting (oh am I really going to say this?) community benefit “lipstick” on a “nonprofit really does just mean tax exempt” pig.

    To me, the point is not the tax exemption but the reason for the tax exemption – the primary purpose of community benefit.

    But clearly that is one of the cruxes of this discussion. So for the moment, let’s set aside the discussion of whether or not the term might apply to a non-tax-exempt organization. (Although I am most intrigued by the melding of classic “nonprofits” with all variety of social entrepreneurial efforts…)

    For your specific question, Aaron, assuming we are talking about organizations that currently fall under the “nonprofit” umbrella, which attribute do we want to describe our work: our tax exemption or our community-driven purpose? Which is the outcome with which we want to be most proudly identified? That should then be what we call ourselves.

    (Thank you once again, Zach Braiker.)


  18. What originally excited me about the idea of Community Benefit Organizations, as Hildy proposed the name, was the emphasis on what we are aiming for. Community Benefit encourages to look outside individual organizations and their survival to the core of why an organization exists.

    I’ve found ED’s and some board members absolutely inspired by the idea of reframing the focus on Community Benefit and living that positive identity. The challenge is that Community Benefit Organization is a lengthy name and requires some explanation to the general community.

    Great discussion with some perspectives I hadn’t considered. Thanks.

  19. Thanks to all for expanding the discussion.

    I wonder if this has to be an “either/or” or perhaps there can be a “both/and” approach?

    As a consultant I’ve loved the term community benefit sector in part because my mission-based work has been limited to supporting groups that are dedicated to changing the world — for over 12 years, that has always been nonprofits and public organizations. Thinking about it this way, I am bringing down one of my own (self-righteous?) walls of “I don’t consult with for-profits.” Doesn’t the intention, and not the tax status, matter most? (This is pushing me. I have a large dose of skepticism about profit motive in general, residual from past work lives.)

    As a consumer and community member, there are times I want to know tax status. Not necessarily as a final judgment, but as information. Is it appropriate to prefer a child care provider that is nonprofit over one that is profit-driven? Can this be one factor in assessing our options?

    So as an organization, is it muddier to describe ourselves both as community benefit when describing why we do our work, and nonprofit (if we are) when this aspect of “how” may be important?

    I don’t imagine we’re creating an exclusive club… what are some situations when a wolf in CBO clothes could harm our communities?

    got my wheels turning…

  20. Um. Seriously? This just seems like another excuse to use a many-syllabled euphemism to re-brand an existing term. I’m not saying “non-profit” is any better – they both suck – but going from one suck to another suck doesn’t achieve anything but confusion and frustration.

    About reason #2: I don’t find ‘Community Benefit Organization’ straightforward OR clear. What community? Local? National? Global? And “benefit” is so general it effectively can be anything you want it to be.

    Reason #3, that it creates a strong, powerful self-image. Well, no. George Carlin once had a bit about how fewer syllables had more of an impact – which moves more levers in your brain, “shellshock” or “post traumatic stress syndrome”?

    Reason #4 gives for-profit organizations a convenient out for making a profit off of potentially disingenuous “beneficial” actions.

    Reason #5: “Focus on providing benefit!” While you’re at it, they should promote synergy and maximize value.

    Reason #6: “Community Benefit is a promise.” I see your point, but “community benefit” is so vague that it’s effectively a promise to do “something”.

  21. I want to underscore and applaud something Hildy wrote above:

    “If the true intent of a business is community benefit and the end result is that the world becomes the amazing place it is capable of being – does it matter if a ‘for-profit’ or a ‘nonprofit’ creates that change?”

    As the owner of an entrepreneurial venture the sole purpose of which is to create a very significant “community benefit,” I’ve chosen a “for-profit” legal entity for exactly the “freedom-to-maneuver” that Hildy points out.

    So I’m taken aback by the mistrustful, anti-business tone of many of these comments.

    After decades working in the “nonprofit” sector, am I suddenly now the enemy simply because I’ve chosen to contribute to society through a different kind of legal entity?

    Is it so difficult to imagine that one can create economic abundance in the process of creating community benefit, or vice versa? (Well, that gets into the whole stream of limited, deficit-based thinking, doesn’t it?)

    The comments here have really got me thinking. Thanks, Hildy, for sparking the conversation — and especially for seeing the value in all sectors of society.

  22. Pam:
    Thank you for that. The more walls we build – the more us-and-them we create among those who are fighting for change – the less chance we have of succeeding!

    I am reminded of a client from many years back, who was sharing with me a short-sighted decision his board had just made. He laughed as he told me, “But you know us – when it comes to shooting ourselves in the foot, we’ve got 20/20 aim!”

    If we’re all on the same side, walls and distrust are self-defeating, ensuring we will not succeed in creating visionary change in our communities. That said, though, the systems within which we work reinforce those walls at every turn.

    If we really want to effect change in our world, it seems that one huge condition to accomplishing that is changing from an assumptoin that there will always be walls dividing our work, moving towards an assumption that we will work together and trust each other.

    From that assumption, we can knock down the systems that encourage us to bicker and distrust, and we can create systems that encourage us to work together towards common goals. But as it is with all things, the thinking (assumptions and expectations) has to change before the doing will change.


  23. It matters that one business competing with another business gets an unfair advantage. While the end result, communities improving, is the same, the means to achieve that result is not. Granting special tax status to a community benefit organization would give anyone with a good lawyer or some creativity a significant advantage. If one business has to pay taxes and another doesn’t, even if they do the same work, one business will have a harder time expanding or paying the bills.

    AIG did good things by helping people deal with tragedies. Those people paid for the service, but you could still consider that a community benefit organization. How many communities have been rebuilt using payouts from AIG after a hurricane or tornado? Including for-profits taints the image of nonprofits.

    Nonprofits sell their saintly image and warm, fuzzy feelings to their donors, because the majority of donors don’t receive goods or services for their contributions. Lumping businesses that give bonuses with nonprofits that don’t may confuse people more. They might think that all community benefit organizations are allowed to give bonuses.

    Donors have a right to expect that their money is used for the mission, not bonuses, and won’t donate if they think something is fishy. Even the hint of legalized embezzlement turns people off and would crush not only the for-profit businesses, but nonprofits as well. If the intention is to get people more involved and improve communities, that can’t be achieved if the organizations go out of business for something legal but anathema.

  24. So exciting! Just had an epiphany about all this myself and I love that others are on the move. Non-profit and For-profit are simply tax designations, technically, but the generalized public perception is that nonprofits help other people. For-profits help people too through providing a wanted product or service (a fact too much ignored I believe) but nonprofits are believed to be completely altruistic in their endeavors (until they ask for money of course).

    And here’s the point (finally): It Only Matters What You Do!!! Unless of course you are talking about branding and communication and perceptions then it’s almost as important to say the right things as do the right things. Community Benefit Organization is a great start, perhaps even a designation that ANY organization can achieve, nonprofit or for-profit (I’m REALLY getting tired of that distinction). Not sure about the actual title, bit cumbersome and boring, accurate but boring. And boring is a great sin in the public’s arena of perception and criticism.

    But the idea is right on, and this is definitely something to work towards. If I come up with some good ideas for another name I’ll let you know, or just check my blog… you will find it interesting.


  25. Hooray! I have been advocating for a name change for our sector all through my MPA course. My preferred name would be Civil Society Organization (CSO) but I’ll jump on board of any positive sounding descriptive. We should say who we are, not what we aren’t. Thanks for bringing this up, Hildy and have a great day!

  26. I am in the process of legalizing a “non-profit” organizing my sister and I started last year. So I’m on the internet right now and come across this page, immediately I draw a line straight through the words “non-profit- organization on my page and it still doesn’t Look right. I start on a fresh page titled “Community Benefit Organization” and I swear the page looked so much brighter! This brings so much more STRENGTH to our cause! Thank you so much for This fresh and exciting view of what we do! I’m inspired 🙂

  27. This is a very wonderfull topic and makes for a good start. NPO doesn’t look good at all, CBO is the best name and very possitive. It stands out. When we registered the communuty organisation AHS (www.amambatha.com) I didnt feel good about npo so I opted for SBO.
    I became very happy when I came across this blog and I do feel CBO is the best. Yes we have registered as an npo but our duties benefit the community.

    Thank You

    Stanley Mbatha
    (South Africa)

  28. nonprofit seems to define these organizations correctly, but on the basis of what they are not for i.e. not in the business/operation to make profit. But why not define them on the basis of what they are for, not what they are not for…

    I like CBO because it seems to define these organizations correctly on the basis of what they are for i.e for the benefit of community. Remember community can just be small group i.e. school, or a country etc