Glossary of Terms

© Ask the Fundraiser.com 2005

I was digging around the file room and found a nice glossary of terms to share, so I decided to post. Here they are.

Annual Fund: An organized effort to secure charitable contributions on a yearly basis.

Annual Report: A voluntary report issued by a foundation, corporation, or nonprofit that provides financial data and descriptions of its financial activities.

Area Campaign: A concentrated effort to obtain contribution in a geographical area, either by mail or through organization of volunteers residing in that area. Also referred to as a Regional Campaign.

Assets: The amount of capital or principal — money, stocks, bonds, real estate, or other resources — controlled by a foundation or corporate giving program or held within an endowment or trust.

Beneficiary: In philanthropic terms, the recipient of a philanthropic contribution.

Capital Campaign: Multi-year fundraising initiative seeking support for capital needs (i.e. building projects or endowment).

Capital Support: Funds provided for endowment purposes, buildings, construction, or equipment.

Challenge Grant: A grant that is paid only if the donee organization is able to raise additional funds from other sources. Challenge grants are often used to stimulate giving from other donors.

Community Foundation: A 501(c)(3) organization that makes grants for charitable purposes in a specific community or region. The funds available to a community foundation are usually derived from many donors and held in an endowment that is independently administered; income earned by the endowment is then used to make grants. Although a community foundation may be classified by the IRS as a private foundation, most are classified as public charities and are thus eligible for maximum tax-deductible contributions from the general public.

Community Fund: An organized community program which makes annual appeals to the general public for funds that are usually not retained in an endowment but are instead used for the ongoing operational support of local agencies. See also federated giving program.

Company-Sponsored Foundation (also referred to as a corporate foundation): A private foundation whose assets are derived primarily from the contributions of a for-profit business. While a company-sponsored foundation may maintain close ties with its parent company, it is an independent organization with its own endowment and as such is subject to the same rules and regulations as other private foundations.

Cooperative Venture: A joint effort between or among two or more grantmakers. Cooperative venture partners may share in funding responsibilities or contribute information and technical resources.

Corporate Giving Program: A grantmaking program established and administered within a for-profit corporation.

Distribution Committee: The committee responsible for making grant decisions. For community foundations, the distribution committee is intended to be broadly representative of the community served by the foundation.

Donee: The recipient of a philanthropic gift. (Also known as the grantee or the beneficiary.)

Donor: An individual or organization that makes a grant or contribution. (Also known as the grantor and philanthropist.)

Electronic Screening: Evaluation of donors which segments and rates a group of donors based on indicators of wealth such as real estate, securities, and previous giving histories.

Employee Matching Grant: A contribution to a charitable organization by an employee that is matched by a similar contribution from his or her employer.

Endowment: Funds intended to be invested in perpetuity to provide income for continued support of a not-for-profit organization.

Expenditure Responsibility: In general, when a private foundation makes a grant to an organization that is not classified by the IRS as a "public charity," the foundation is required by law to provide some assurance that the funds will be used for the intended charitable purposes. Special reports on such grants must be filed with the IRS. Most grantee organizations are public charities and many foundations do not make "expenditure responsibility" grants.

Family Foundation: An independent private foundation whose funds are derived from members of a single family. Family members often serve as officers or board members of family foundations and have a significant role in their grantmaking decisions.

Federated Giving Program: A joint fundraising effort usually administered by a nonprofit "umbrella" organization that in turn distributes the contributed funds to several nonprofit agencies. Examples include: United Way, the United Jewish Appeal, the United Negro College Fund, and joint arts councils.

General Purpose Foundation: An independent private foundation that awards grants in many different fields of interest.

Grantee Financial Report: A report detailing how grant funds were used by an organization.

Guidelines: Procedures set forth by a funder (typically foundations) that grantseekers should follow when approaching for philanthropic support.

Hard Credit: Relating to an organization's accounting of gifts. Hard credits are credits applied to individuals primarily responsible for the gift made. This is the individual/organization which receives credit for the gift and gift receipts for reporting purposes.

Independent Foundation: A grantmaking organization usually classified by the IRS as a private foundation. Independent foundations may also be known as family foundations, general purpose foundations, special purpose foundations, or private non-operating foundations.

LYBUNTS: An acronym for donors who gave "Last Year But Unfortunately Not This year".

Matching Grant: A grant that is made to match funds provided by another donor.

Major Gift: Term used by fundraising professionals to identify a gift by a donor which is substantially larger than an annual gift and perhaps may require pledge payments to complete.

Operating Support Grant: A grant to cover the regular personnel, administrative, and miscellaneous expenses of an existing program or project.

Payout Requirement: The minimum amount that private foundations are required to expend for charitable purposes.

Philanthropy: Voluntary action for the public good.

Planned Gift: Typically associated with gifts which require the assistance of professional counsel to complete such as bequests, stock transfers, gift annuities, and charitable trusts. Also referred to as deferred gifts.

Pledge: Donor's intent to make a gift. Can be written or verbal.

Private foundation: A non-governmental, nonprofit organization with funds (usually from a single source, such as an individual, family, or corporation) and program managed by its own trustees or directors. Private foundations are established to maintain or aid social, educational, religious, or other charitable activities serving the common welfare, primarily through the making of grants.

Program Amount: Funds that are expended to support a particular program administered internally by a foundation or corporate giving program.

Program Officer: A staff member of a foundation who reviews grant proposals and processes applications for the board of trustees.

Proportionate Giving: Giving that is commensurate with an individual or group capability (using a common criteria) which could include factors such as: age, occupation, and family circumstances.

Program-Related Investment (PRI): A loan or other investment (as distinguished from a grant) made by a foundation to another organization for a project related to the foundation's philanthropic purposes and interests.

Proposal: A written application, often accompanied by supporting documents, submitted to a foundation or corporate giving program in requesting a grant.

Prospect Rating: A procedure for evaluating the donor capacity and inclination, typically through confidential input provided by peers. Also called: Peer Review.

Prospect Research: Research conducted by development staff to identify donor capacity and inclination to make philanthropic gifts.

Public Charity: A nonprofit organization that qualifies for tax-exempt status under section 501(c)(3) of the IRS code. Public charities are the recipients of most foundation and corporate grants. Some public charities also make grants.

Qualifying Distributions: Expenditures of a private foundation made to satisfy its annual payout requirement. These can include grants, reasonable administrative expenses, set-asides, loans and program-related investments, and amounts paid to acquire assets used directly in carrying out tax-exempt purposes.

Query Letter: A brief letter outlining an organization's activities and its request for funding that is sent to a potential grantmaker in order to determine whether it would be appropriate to submit a full grant proposal.

Remainder: Property remaining in a trust at the time it terminates or at the end of a life estate.

Restricted Gift: A gift given for a specified purpose which is clearly stated by the donor.

Revocable Trust: A trust whose terms and provisions can be changed, modified, altered, amended, or revoked. The power to do this is usually reserved by the person who created the trust, but sometimes the power may be given by the creator to a second person.

RFP: An acronym for Request for Proposal.

Seed Money: A grant or contribution used to start a new project or organization. Seed grants may cover salaries and other operating expenses of a new project.

Set-asides: Funds set aside by a foundation for a specific purpose or project that are counted as qualifying distributions toward the foundation's annual payout requirement. Amounts for the project must be paid within five years of the first set-aside.

Silent Phase: The phase of a campaign when initial gifts are sought prior to an official public announcement of a fundraising campaign. Also called quiet, nucleus, leadership, and pacesetter phases.

Soft Credit: Relating to an organization's accounting of gifts. Soft credits are credits applied to individuals or organizations which are part of a gift, but not the primary donor.

Solicitation: The process of asking for philanthropic support.

Sponsorship: Support of an organization in which an event, activity, or program is underwritten through philanthropic support.

SYBUNT: - Acronym for a donor who makes gift “Some Years But Unfortunately Not This (year)”.

Tax-exempt: Refers to organizations that do not have to pay taxes such as federal or state corporate tax or state sales tax. Individuals who make donations to such organizations may be able to deduct these contributions from their income tax.

Tax Benefits: I.R.S. tax relief associated with making a gift. Savings can be in income, gift or estate taxes.

Testamentary: Provisions for after-death disposition of assets as set forth in a will.

Testamentary Gift: A charitable gift designated in a will which becomes effective upon the death of the testator.

Testamentary Trust: A trust contained wholly within the will of a deceased person. Effective only after death.

Trust: A set of instructions left to a trustee with management authority over the trust property which is to be managed exclusively for the benefit of a named beneficiary.

Trustee: A foundation board member or officer who helps make decisions about how grant monies are spent. Depending on whether the foundation has paid staff, trustees may take a more or less active role in running its affairs.

Upgrading: Effort to increase a donor’s giving level, particularly in annual fund appeals.

Unrestricted Gift: An unconditional gift made to support an organizations greatest needs, typically applied to the operating budget – as opposed to a restricted or designated gift to be applied to a specific program or fund at the donor’s direction.

Will: A document which outlines a person's wishes as to the disposition of his/her property upon his/her death.

Write-Off: Unfulfilled pledge removed from an organization's accounting records.

Year-End Appeal: Solicitation of gifts prior to the end of the calendar year on the premise that prospects will take advantage of opportunities for calendar-year tax deductions.