The Caring & Change Nonprofit Subsectors

I've often said to students that the nonprofit market is insufficiently differentiated, meaning that we tend to talk about "nonprofits" as if they were characteristically very similar. We generally don't talk about for profits in the same vein; we will at least make a distinction between large multinational corporations like ExxonMobil and the new Brazilian restaurant that opened up down the street.

The National Taxonomy of Exempt Entities (NTEE) certainly gives us a rich array of nonprofit functional classifications. But I think an important, yet easy distinction to draw among nonprofits is between "caring" and "change" nonprofits.

Here's what I mean. In any community, there are nonprofits that meet important human needs on an ongoing basis. Think community kitchens, food pantries and homeless shelters. There isn't anything particularly fancy about what they do but the community would be worse off if they stopped operating. These are what I would call "caring" nonprofits.

Conversely, there are nonprofits that are committed to social change. A good example is the Community Reinvestment Association of North Carolina (CRANC). They have been fighting predatory lending for years and have made real progress on policy issues like banning payday lending in the Tar Heel state. You guessed it - I would call these "change" nonprofits.

Of course, there are plenty of examples of nonprofits that fall somewhere in between and I don't mean to oversimplify the issue with a false dichotomy. However, this distinction mirrors what Heather McLeod Grant and Leslie Crutchfield talk about in their book, "Forces for Good: The Six Practices of High Impact Nonprofits". Actually, if I delved into the book deeply, I like others would probably take issue with their research methdology and conclusions and I think including the Heritage Foundation is a blatant means of bone tossing to sell books.

Nonetheless, I think they are on to something that can help us understand the different between nonprofits that meet important ongoing needs and those that shake things up and (hopefully) help us change, innovate and evolve into a more socially just world.