How do nonspecialists conceptualize the third sector? Drawing inspiration from Crawford and Ostrom’s grammar of institutions, we examine how lay observers make sense of the sectoral boundaries between nonprofits, businesses, and governments. Using a survey exercise in which study participants coded statements describing different interactions between various types of entities, we find that research participants are less prone to label interactions consistently with the nominal sectors of the organizations presented to them and more inclined to code the interactions based on the types of actions organizations take and their rationale for those actions. We thus use the grammar to explore the everyday meanings of nonprofit organization and action, and we argue that understanding these everyday meanings has important implications for theory and practice.