A Brief History of Nonprofit Organizations (And What We Can Learn)

Though the idea of helping and giving back to others has existed since Biblical times, nonprofit organizations in the United States have a much shorter history. Every couple of decades, a new era ushers in a new set of ideas, principles and practices that affect how the nonprofit sector functions. Let’s take a look at what we can learn from the history of nonprofit organizations.

Without being too retrospective, we can learn a thing or two from the past when it comes to fundraising for nonprofits. When problems emerge, you have to think of new and creative ways to deal with them. But why spend hours trying to blaze your own trail when others have done it before you? Below, you’ll find some key turning points in the history of the nonprofit sector and what we can learn from them.


From the late 1800s up until 1920, the U.S. entered the Progressive Era. This was a time of increased social activism and political reform. During this time, we saw policies such as child labor laws, suffrage for women and prohibition.

This was also a decade of prosperity and success for many in the nation towards the turn of the century. With an increase in wealth came an increase in giving back. The release of Andrew Carnegie’s Gospel of Wealth in 1889 promoted the idea of owing a duty to society, and encouraged donating to causes.

A cause many found to be worthwhile was the YMCA. Though the organization had been around for years, in the early 1900s we saw the U.S.’s first significant fundraising campaign come from the minds of Charles Sumner Ward and Frank L. Pierce, two of the YMCA’s most prominent leaders. The two developed a system of fundraising that had never been seen before: setting a time limit on their campaign for constructing a new building in Washington D.C., hiring a publicist to oversee the campaign and seeking paid advertisements from corporate sponsors and celebrities. Their effort became known as the “YMCA School” of fundraising. This took the organization from a private franchise focused on local chapters to one the entire nation—and big donors—could get behind.


What can we learn from Ward and Pierce? Go big, or go home. Even if you’re a small nonprofit focused on a niche community or cause, expand your fundraising efforts to everyone. Set up a way to donate online, create a social media campaign and promote it on a national scale and give the campaign a little extra something: whether that be a fundraising goal by a certain date, a fun competition between donors or asking for a specific item on your wishlist.


With World War II happening across the pond, and the looming fear that it would come to the states, Americans took it upon themselves to help out with the effort from home. For the first time in the nation’s history, people came together to fundraise on a global scale.

They started to conserve resources, send supplies to troops overseas and develop both civilian and refugee relief programs. Many times, fundraising and volunteering took on the form of a collaborative effort. Service organizations like the YMCA, the Salvation Army and the National Jewish Welfare Board came together to create the United Service Organization for National Defense (USO). The American Red Cross also launched an unparalleled campaign where they were able to raise millions of dollars, recruit over 100,000 nurses and start the nation’s first-ever war-related blood donation program.


The takeaway from this time period is looking at how your nonprofit organization can work with other entities to better a cause. Whatever that looks like for you—working with a corporate sponsor, another nonprofit in your community or a for-profit business with a social responsibility angle—your organization could make a lot of progress. By collaborating, you can save costs on things like shared infrastructure and administrative expenses, promote each other’s mission on different platforms and maximize efficiency on getting tasks done. Don’t count out other players when you’re thinking about your next fundraising effort.


Following the massive paradigm shift brought on by the Civil Rights Movement in the U.S. and the cultural resistance to entering Vietnam in 1965, we saw how Americans began to organize and work together to tackle specific issues with a narrow focus.

The government also became much more involved in social and cultural welfare programs. In 1969, the Tax Reform Act gave us Section 501(c)3 in the Internal Revenue Service Code, which said that every charity in the U.S. that fits certain requirements is a “private foundation,” meaning they have a principal fund managed by their own trustees or directors.

When organizations found that they could legally have status as a charitable organization and offer tax exemptions to their donors, there was a surge in applications for 501(c)3 status. With the development of an official “nonprofit sector” came the development of more rules, regulations and policies.

In 1976, Congress passed a bill, supported by the Coalition of Concerned Charities, that allowed nonprofits to legally spend up to $1 million per year on lobbying efforts. This gave them greater voice in the government. By 1980, the nonprofit sector was being referred to as the “third sector,” and it was influencing the business world.


What did the government and nonprofit collaboration in the 1970s teach us? Don’t be afraid of Uncle Sam. Work with the government to apply for the legal status that best fits your organization. Then, use them to get the grants that could help take your nonprofit from just a great idea to a force in your community.

Treat your nonprofit organization like a business in order to get the full scale of results you want. Look at fundraising the same way you would a sales campaign, and think about how you can benefit from earned income opportunities, too. Taking risks often pays off for for-profit organizations, why wouldn’t you want to try it for your nonprofit?


Right before the world transitioned into a new millennium, the Internet happened. In 1991, the World Wide Web became available for public use. This would forever change the world, and forced many to adapt to technology they’d never even had to think about before. For the nonprofit world, it became yet another avenue to utilize.

Online giving generated $2.1 billion in donations for nonprofits in 2012 and has only been growing since. Make sure that your nonprofit organization is fully equipped for online giving, and make it easy for donors to know where their money is going.

With social media platforms like Twitter and Facebook gaining large followings in 2006 came another new technology available for promotional use. By utilizing social media, you can get the word out about your nonprofit’s mission. Just look at campaigns like the ALS Ice Bucket Challenge or the #BlackLivesMatter tag, both of which started online and transformed into giant social movements.


The ultimate takeaway from the day and age we’re living in is to seize the opportunities offered to you. The Internet can serve so many purposes for the nonprofit sector, so it’s on you to utilize them for your benefit.

Whether you’re just starting out or you’re an established voice in your community, you’re bound to run into a situation where you feel lost. Luckily, the trailblazers and thought leaders of their time have prepared you with decades of troubleshooting. So let history be a roadmap for your organization so you can navigate the nonprofit waters with ease.


history of nonprofit organizations

Hana Muslic

Hana is a recent graduate of the University of Nebraska-Lincoln, putting her journalism degree to use by writing articles for the Hub’s national publications and overseeing the national social media accounts. Hana is dedicated to the nonprofit sector and giving back to the community that has given so much to her. If you need some last minute plans, she will most likely join you in impulsively buying concert tickets right before the show.

October 27, 2017

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