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Why Some Nonprofits are Calling Themselves Community Benefit Organizations

The language we use to name things has become increasingly important. Not so much because of definitions, but because of perception. Sometimes just changing a few words gives people an entirely different perception of whatever it is those words represent. Some nonprofits are finding that calling themselves community benefit organizations is changing the public perception and promoting their mission.

The term nonprofit is sometimes misunderstood by the public. Nonprofits are often thought of as organizations that have very little money and operate on the thinnest of margins. Some people think everything should be done in the cheapest possible way and that every penny should go towards the mission, not employee salaries or new technology. Some think the non in nonprofit signifies the organization can’t legally make a profit, but in reality, it means that profit isn’t the primary goal. When most people hear the word nonprofit, it’s the money and how it’s being used that comes to mind.

However, when people hear the term community benefit organization, these perceptions go out the window. There are no immediate thoughts about financials or how the money is spent. The first thought is what type of work the organization does to benefit the community. The focus changes to the mission instead of the money behind the mission. Donors wonder how successful you are before they wonder about how much money you bring in and where exactly it’s going. Money and using it effectively are important of course, but the public perception should be about the work being done, not about the money.

There are people in every organization whose main purpose is to track, report, and worry about financials. But the reason a nonprofit exists is for their mission, i.e., providing a community benefit. In the end, both terms (nonprofit and community benefit organization) can be used to describe an organization that works for the community. The choice is up to each organization, but it’s worth thinking about when your public perception has so much to do with how well you can succeed in your mission.

Cougar Mountain Software is the creator of Denali Fund, a complete accounting solution specifically designed for nonprofits. To learn more, contact us at (800) 388-3038 or sales@cougarmtn.com.

Make sure to check out our blogs on essential tools for nonprofits and why GAAP accounting is important.