Cannot format dates in email templates using Smarty

I would like to put this month's name in a recurring email, but I can only use the full formatted date using Smarty. For example, if I put in {$smarty.now|date_format}, I get the date in the email. However, if I try to add any type of formatting command, such as {$smarty.now|date_format:'%B'}, I get an error message concerning an incorrect tag.

So far, I've used the Source editor to make sure the information was correctly stored in the database, but have not followed it further. Happy to help if someone can give me some pointers....