In the 1950s, only two groups – management consultants and the American Internal Revenue Service (IRS) – viewed “nonprofits” as a distinct sector of the economy, and both hoped to find profit in these nonprofits. While the IRS worried that federal tax receipts would decline because of the rapid growth of these tax-exempt institutions, management consultants from Cresap, McCormick and Paget worked to create a niche for the sale of their organizational advice by targeting what they labeled for the first time in 1955, in a promotional brochure, “nonprofit organizations.” By the time they published their brochure, Cresap, McCormick and Paget, one of the three leading U.S. management consulting firms, had reorganized dozens of nonprofit organizations including St. Paul's School (1948), the New York Public Library (1949), Yale University (1950), the Republican Party (1951), the Presbyterian Church of the U.S.A. (1952), the Rockefeller Institute for Medical Research (1953), the American Civil Liberties Union (1954), and the Metropolitan Museum of Art (1955). Although these organizations did not yet see themselves as a unified “third sector” of the American economy, the consultants at Cresap, McCormick and Paget understood that this was a distinct sector of the economy – one with growing power and substantial potential profits for consultants.

The management consultants at Cresap, McCormick and Paget had good reasons for focusing on nonprofit institutions in the 1940s and 1950s.