Difficulties of terminology

As the voluntary nonprofit sector is such a diffuse and varied one, ranging from tiny local neighbourhood groups to multi-million-dollar international agencies, the student of the voluntary nonprofit sector faces serious difficulties in defining clearly the territory that is to be explored. Even finding agreement on an acceptable expression to describe the sector (if indeed it is a sector) is problematic. In the UK the expression the voluntary sector’ is frequently used, although seldom defined. However, the increased involvement of professional paid staff has raised questions about how appropriate the word ‘voluntary’ is to define the sector. Osborne (1996) distinguishes between ‘voluntaryism’, as the societal principle of voluntary action, ‘volunteerism’, which he views as individual action without personal benefit (i. e. by volunteers), and ‘voluntarism’, which he relates to organized voluntary action which may or may not involve any significant number of volunteers.

In the UK the expression ‘the charitable sector’ is also used. However, those organizations which have charitable status within the definition of ‘charitable’ in accordance with the statute of 1601 are a particular sub-set of the larger voluntary nonprofit sector. Many organizations, like Amnesty International, that are not-for-profit and would be accepted by the public as part of the voluntary sector, do not have charitable status. Indeed in Scotland and Northern Ireland there is no register of charities that have officially been given charitable status by the Charity Commissioners or their equivalent. Charitable exemption from certain tax liabilities is granted instead by the Inland Revenue. What is deemed to be charitable also changes over time. For example, it was only relatively recently that promoting racial harmony, tackling unemployment or protecting the environment were considered to be charitable by the Charity Commissioners.

In both the UK and the USA the expression ‘the third sector’ is sometimes used to describe the sector that exists for a social purpose and is neither the private nor the public sector (Hudson 1995), although the term ‘third sector’ gives no indication about any of the characteristics of the sector. ‘The independent sector’ is also sometimes used, but this can mean all organizations that aren’t statutory, i. e. both the voluntary and the private sectors.

In the USA the term ‘the nonprofit sector’ (sometimes ‘not-for-profit’) is most commonly used, highlighting the key negative characteristic: that such organizations by definition may not distribute a profit to members, or others with a beneficial interest. However, to define a sector by one characteristic alone, and in the negative, is not entirely satisfactory. Statutory bodies are also not permitted to distribute their profits, if any. Osborne (1996) therefore favours the term ‘voluntary and non-profit organisations’ (VNPOs). Peter Dobkin Hall (1994) prefers the ‘private nonprofit sector’.

In France the concept of The Social Economy is commonly used to define not only not-for-profit associations that we would traditionally think of as being in the voluntary or nonprofit sector, but also other kinds of organizations such as cooperatives, where any profit is distributed to the members.

Internationally, particularly in Africa and South America, the concept of the Non- Governmental Organization, or NGO, is frequently used to define organizations which are for the public benefit, but are not public bodies.

This is another example of defining something by what it isn’t, rather than by what it is. Again internationally, because of the differences of culture, legal structures and definitions between different countries, the expression Civil Society Organizations is sometimes used, but like the French ‘Social Economy’ it tends to cover a very wide range of types of organization, including trade unions and cooperatives.

The concept of ‘value-led organisations’ (Hudson 1995) to cover the sector is very attractive and accords with Jeavons’s suggestion that the distinctive characteristic of a nonprofit organization is that it gives ‘expression to the social, philosophical, moral and religious values of their founders and supporters’ (Jeavons 1992). Gerard (1983) and Paton (1992) also argue that ‘voluntary action is essentially value-based’. However, increasingly organizations from all sectors may feel entitled, and have been encouraged, to consider themselves to be value-based organizations.

In the private sector, too, the concept of value has come to be used in the economic sense of economic value, i.e. as increasing the value of a product or service; and it may not be helpful therefore to define the boundaries of this ‘loose and baggy monster’ (Davis Smith et al. 1995) by adopting the designation of ‘value-based’ or ‘value-led’.

Kendall and Knapp’s (1995) conclusion that ‘there is no single “correct” definition which can or should be uniquely applied in all circumstances’ would be very difficult to dispute. For the purposes of this book, a combination of UK and US terminology has been adopted, and the terms ‘voluntary nonprofit organizations’ and ‘voluntary nonprofit sector’ are used throughout the book. Where these expressions are deviated from it will be for a particular reason that will be explained in the text.

As indicated above, it is important to be aware that what actually constitutes the voluntary nonprofit sector is different in different countries. For example, many of the US studies on strategic planning concern museums, universities, libraries and/ or hospitals, none of which would be generally considered to be part of the voluntary sector in Britain. Because many of these institutions in the USA are considered to be voluntary nonprofit organizations, the basic texts on strategic planning for the voluntary nonprofit sector in the USA are also often equally directed at the public sector (Nutt and Backoff 1992; Bryson 1995), whereas in the UK the two sectors tend to be considered very separately when writing on management issues.

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