Julep’s Nonprofit Glossary
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Accountability:
The acknowledgment and assumption of responsibility for policies and decisions, including the obligation to be answerable for resulting consequences.
The responsibility of the donee organization to keep a donor informed about the use that is made of the donor’s gift as well as the cost of raising it.
Accounts Payable: Money owed by an organization to its suppliers and/or vendors for goods or services purchased.
Accounts Receivable: Amounts owed to the organization from completed sales or services rendered and expected to be received within one year. Referred to as grants receivable when the amount is related to a grant agreement.
Accrual-basis Accounting: A system of financial recordkeeping in which transactions are recorded as expenses when they are incurred (i.e. when a bill is received for merchandise or services provided to the organization) and as income when it is earned (i.e. when services or merchandise is provided by the organization, or the organization receives a commitment of a contribution) rather than when cash is paid or received. The alternative is cash-basis accounting.
Accrued Expenses or Liabilities: Costs for services or items incurred during an accounting period for which payment is postponed. Examples include accrued salaries, accrued sales tax payable, and accrued rent payable.
Accrued Interest: Interest costs that have accumulated but are not yet due or payable.
Accrued Wages: Salaries and wages earned by employees but not yet paid.
Accumulated Depreciation: The total amount the value of fixed assets has decreased to date due to general wear and tear or obsolescence.
Acknowledgment: Written expression of gratitude for gift or service.
Acknowledgment Letter: A letter sent by a donee, or on behalf of a donee, to the donor, expressing appreciation for a gift and identifying the use that will be make of the gift. An acknowledgment letter may be a form letter, but it is usually personalized.
Acquisition Mailing: A mailing to prospects to acquire new members or donors. See also Prospect Mailing.
Activism: A practice based on direct action to affect changes in government and social conditions.
Ad hoc Committee: a temporary committee established to address a specific issue, not necessarily within a specific time frame.
Administrative Fund: May be either nonpermanent and “spent” for the operations of TFEC or may be endowed with only the income from the fund used for operations.
Advancement: A discipline within education like development and fundraising. It encompasses alumni relations, communications, development, marketing and is an integrated method of managing relationships to encourage philanthropy.
Advance Gifts: Gifts given or pledged in advance of a public announcement of a campaign. Advance gifts are solicited before a campaign is announced because the success or failure of a campaign may depend on the size of the advance gifts.
Advisory Board: An advisory board is made up of a group of influential and prominent individuals whose association with a development program is calculated to lend luster and implied endorsement of the program’s goals and objectives and usually focus on a specific issue, area of concern, or constituency. Also known as an advisory council, advisory group, advisory committee, or advisory board.
Advocacy: Any behavior or action that speaks in support of, recommends, argues for, or otherwise defends or pleads for a cause, mission, or organization that benefits others.
Affiliate: A chapter, an auxiliary group, or a branch of a parent organization.
Affinity Group: A separate and independent coalition of grantmaking institutions or individuals associated with such institutions that shares information or provides professional development and networking opportunities to individual grantmakers with a shared interest in a particular subject or funding area.
Agency Fund: Established by a nonprofit organization (agency) for the benefit of the nonprofit organization where the profits are distributed annually to the nonprofit organization to support operations, programs, etc.
All Volunteer Organization: (AVO) a nonprofit organization that is managed and governed by volunteers.
Alliance: A union, relationship, or connection by a common interest.
Allocation: A method of accounting that divides expenses among different program, administrative, and fundraising categories based on a formula that recognizes the use of the resources such as use of the facility or staff time.
Allowance for Doubtful Accounts: An amount reflecting the portion of the accounts receivable which the organization reasonably believes it may not collect. The amount is often an estimate based on experience or trends in the industry.
Altruism: Selfless concern for the welfare of others.
Amortization: The repayment schedule for a loan or other obligation, usually as a constant amount each month that is paid first to the interest calculated on the principal balance, and then to reduce the principal balance.
Analysis: The section of a study that deals with the factors essential to success in a fundraising program; principally the case for support, leadership potential, and fields of support.
Annual Fund: Organized attempts by nonprofits to solicit contributions made on an annual basis for a charity’s operations, programs, and other expenses.
Annual Giving:
A broad term for programs that reach out to the greatest numbers of alumni/ae and friends and provide the broadest opportunities and encouragement for the organization’s constituencies to make a gift each year.
This type of giving refers to annually repeating gift programs, or to seeking funds on an annual or recurring basis from the same constituency. Income is generally used for operating budget support.
Annually repeating gift programs; seeking funds on annual or recurring basis from the same constituency; income is generally used for operating budget support.
Annual Operating Budget: An itemized listing for a specific year that includes:
The amount of all estimated support and revenue which an organization anticipates receiving
All estimated expenses that will be incurred.
Annual Report:
A voluntary, annual document produced by nonprofits and distributed to stakeholders and donors to demonstrate their mission, accomplishments, finances and includes income, expenditures, programs, and progress. Foundations or corporations voluntarily publish an annual report to describe their grant activities. It may be a simple, typed document listing the year’s grants or an elaborately detailed publication. A growing number of foundations and corporations use an annual report as an effective means of informing the community about their contribution activities, policies, and guidelines. Note: The annual report is not to be confused with a corporation’s annual report to the stockholders.
Annuity: Annual payment of an income or allowance.
Anonymous Gift: A gift whose announcement, by specific wish of the donor, can include only the amount; the name of the donor is withheld.
Appeal: A fundraising or donation appeal asks supporters to contribute money by explaining your cause, mission, and impact with a sense of urgency. Typically, the ask is part of a fundraising campaign. It can be delivered via letter, email, social media, or online campaign page, in person, at an event, or a combination of these methods.
Appraisal: A formal report usually created by a certified real estate appraiser evaluating a real estate property to determine its value. One or more of three valuation methods are used: cost, replacement value, and market value. Appraisals can be ‘as is’ or ‘as improved’ which includes the value created by future capital expenditures.
Appreciation: A likely permanent increase in value due to an upward change in the market price or due to an inherent quality or qualities that enhance the desirability of, and hence the demand for, a product over time.
Appreciated Real Property and Securities Gift
Appreciated Real Property and Securities Gift: Gifts of real estate or securities, which when held long term are deductible for federal income tax purposes at the full fair market value with no capital gain on the appreciation. However, the appreciation is a tax preference item, and proper counsel should be obtained to evaluate whether this would have alternative minimum tax consequences.
(The) Ask: The nonprofit equivalent of a sales pitch.
Asset: Tangible or intangible property that has exchange value.
Assets:
The amount of capital or principal (money, stocks, bonds, real estate, or other resources) controlled by a foundation or corporate giving program; generally, assets are invested, and the income is used to make grants.
An item of current or future economic benefit to an organization. Examples include cash, short-term investments, accounts receivable, grants receivable, inventories, prepaid expenses, buildings, furniture, equipment, vehicles, and long-term investments. See Payout Requirement.
Asset Mapping: Finding the positive values in a community and building on those values to create a stronger community; important character-building qualities found to help children be successful.
Associates: A term used variously to describe a group of individuals who may be supporting an institution through contributions at a prescribed level, serving in a special advisory capacity, or serving as a sponsoring body for special institutional events.
Association: A membership organization that may be incorporated or unincorporated.
Assumed Name: An alternate name under which an individual or a legal entity may conduct business. Also known as a DBA or doing business as name. Note: In a loan transaction, it is critical to know the correct legal name of an entity and document it accordingly and accurately. See certificate of incorporation.
Area of Interest Fund: A fund held by a community foundation that is used for a specific, donor designated, charitable purpose such as education or health research.
Articles of Incorporation: a document filed with a governmental agency to create a corporation, set forth the purposes of the corporation and establish the rights and liabilities of shareholders and directors; the first step in forming a nonprofit organization.
Articles of Organization: A charter for an unincorporated organization.
Audit: A systematic, internal evaluation of development procedures, financial activities and legal transactions as practiced by a nonprofit institution or agency; normally conducted by professional fundraising counsel or independent body. This financial report verifies or examines financial accounts or records by a Certified Public Accountant (CPA) and prepared in accordance with Generally Accepted Accounting Principles (See GAAP). The most rigorous level of external financial statement preparation. An essential component of the audit is the Opinion Letter.
Audited Financials: An examination and verification of records by a certified individual for compliance reasons.
Auditor’s Opinion: The auditor’s view of how fairly the financial statements represent the organization’s financial position included in the audit report.
Authorization of Borrowing: A resolution passed by a board of directors or trustees acknowledging and approving the incurrence of debt. Also known as a borrowing resolution. See officer’s certificate.