Julep’s Nonprofit Glossary
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Call-to-Action: (CTA) Written as a command, this message tells your supporters the specific activity you want them to take. An effective CTA is key to a successful fundraising or engagement campaign. Examples include “Donate Now” or “Sign our Petition.”
Campaign: A comprehensive, organized initiative with a goal of raising money for a specific project. Campaigns usually consist of a quiet phase, when major supporters are asked to contribute toward the goal to help build momentum, and a public phase, when the broader community is asked to contribute. Most organizations have already reached a high level of their fundraising goals by the time a public phase is launched.
Campaign Leaders: Provide and maintain the momentum and enthusiasm essential to the motivation of the entire organization of volunteers.
Campaign Materials: General term used to denote campaign forms of all kinds; materials required for campaign workers, fact sheets, prospect lists, and numerous other items essential to the effective functioning of a campaign; printed materials such as brochures used to advance a campaign.
Capital: Financial resources, such as cash, available for use.
Capital Campaign: A campaign to raise funds to finance major projects and/or programs such as the acquisition of property or equipment, construction and/or renovation of facilities. Capital campaigns are carefully organized, highly structured fundraising program using volunteers supported by staff and consultants to raise funds for specific needs to be met in a specific time frame, with a specific dollar goal. Allows donors to pledge gifts to be paid over a period of years. Also referred to as a Capital Development Campaign.
Capital Grant: A grant that is used for building costs, equipment, or materials.
Capital Expenditure: Payment of money to acquire fixed assets, such as a building or equipment.
Capital Improvement: A facility or equipment upgrade or enhancement that will have a life of more than one year, and that increases the value of an asset. The cost of the improvement increases the value of an asset rather than recognized as an expense. See Capitalizing an Asset.
Capitalizing an Asset: Recording the cost of land, a building or equipment as fixed assets rather than as an expense when purchased.
Case: Carefully prepared reasons why a charitable institution merits support (in the context of the “case bigger than the institution”), including its resources, its potential for greater service, its needs, and its future plans.
Cash-basis Accounting: A system of financial recordkeeping in which transactions are recorded when cash is received or spent. The advantage over accrual-basis accounting is its simplicity.
Cash Equivalents: Funds which can be quickly and easily converted to cash, such as bank accounts, U.S. Treasury Bills, CDs, money market funds, or other investments which mature in one year or less.
Cash Flow:
The movement of cash into and out of an organization; or the difference between cash receipts and cash disbursements during a period; predictable cash income to sustain operations
In capital campaigns or whenever pledges are secured, anticipation of annual cash receipts resulting from payments on pledges.
Cash Flow Projection: A management tool used to predict incoming and outgoing cash during a specified period. Used to anticipate and plan for times of low and high cash balances. Also known as a Cash Flow Forecast.
Cash Gift: The simple transfer of cash, check, or currency (other than special collections) to a gift-supported organization or institution.
Cause-related Marketing: An arrangement that links a product or service with a social cause to provide the cause with a portion of the profits received by the corporation.
Certified Fundraising Executive: (CFRE) A credential granted to a fundraiser by the Association of Fundraising Professionals, which is based on performance as a fundraising executive, knowledge of the fundraising field, tenure as a fundraiser (minimum of five years), education, and service to the profession.
Chapter: A member or affiliated organization of a federated organization.
Charitable Contribution: A charitable contribution is a donation of something of value to a gift-supported charitable organization. It is usually tax-deductible.
Charitable Deduction: A charitable deduction is the value of money or property transferred to a 501(c)(3) organization, which is deductible for income, gift, and estate tax purposes. In most cases, the term charitable deduction refers to the amount of a gift that can be deducted from the portion of a donor’s income that is subject to federal income tax. A donor’s charitable deduction should not be confused or equated with the value of a gift. That is, gifts for the purpose of life income agreements are not federally deductible at their full value.
Challenge Gift: A substantial gift made on condition that other gifts must be secured, either on a matching basis or some other prescribed formula, usually within a specified period, with the objective of stimulating fundraising activity generally.
Challenge Grant: A grant that is made on the condition that other monies must be secured, either on a matching basis or via some other formula, usually within a specified period, with the objective of stimulating giving from additional sources.
Change in Net Assets: The net results of total income minus total expenses for a period of time, which may be Positive or Negative. Also referred to as surplus or Deficit. Commonly called profit or loss in the for-profit sector.
Character: Moral or ethical strength.
Charity: In its traditional legal meaning, the word “charity” encompasses religion, education, assistance to the government, promotion of health, relief of poverty or distress, and other purposes that benefit the community. Nonprofit organizations that are organized and operated to further one of these purposes generally will be recognized as exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code (see 501(c)(3)) and will be eligible to receive tax-deductible charitable gifts.
Charity Watchdog: A group such as CharityWatch, Charities Review Council, or Charity Navigator which rates charities based on criteria such as efficiency and governance.
Charitable Contribution: A donation of something of value to a gift-supported charitable organization, usually tax-deductible.
Charitable Corporation: A kind of nonprofit corporation focused on charitable causes and whose income is generally exempt from taxation by federal and state law.
Charitable Deduction: The value of money or property transferred to a 501(c)(3) organization, deductible for income, gift, and estate tax purposes. In most cases, the term charitable deduction refers to the portion of a gift that can be deducted from the donor’s income subject to federal income tax. A donor’s charitable deduction should not be confused or equated with the value of a gift; that is, gifts for the purpose of life income agreements are not federally deductible at their full value.
Charitable Deferred Gifts: A gift made using any one of the following methods:
Wills: A charity may be named as beneficiary under a will in many ways. These include (a) gifts of specific property, whether it is real property or personal property; (b) a gift of a stated amount of money; and (c) a percentage of the remaining estate after specific gifts are made.
Revocable Trusts: A revocable trust allows the grantor to withdraw any or all assets during his or her lifetime, as well as having full enjoyment of the property during his or her life. At death the assets can flow efficiently to the beneficiaries, saving probate and administrative costs. A charity can be named as one of the beneficiaries.
Irrevocable Trusts: Charitable Remainder Unitrusts and Charitable Remainder Annuity Trusts. Although the principal of these trusts cannot be withdrawn,
There are additional benefits to the donor through immediate income tax deductions and fund management. The donor will receive yearly income from the trust as well as an immediate partial federal income tax deduction for the interest that ultimately passes to the charity.
Charitable Gift Annuities: Involves a transfer of cash or other property to the organization. In return, payment of a specified amount determined by age is made to the donor during his or her lifetime. The rates paid are the most recent ones adopted by the Committee on Gift Annuities as agreed to by most major charities. There is an immediate income deduction for the present value of the amount ultimately to pass to the charity; part of the income received by the donor is also tax free.
Gift of Home or Farm Retaining a Life Estate: Through this gift the donor retains use of the property for his or her lifetime. The federal income tax deduction will be based on the present value, figured on the prospective years of using the property before it goes to the charity.
Totten Trusts or Accounts P.O.D. (payable on death): The charity can be named beneficiary of a bank account, bond, or other security, provided state laws allow.
Charitable Lead Trust: (CLT) A trust that pays the trust income to a charity first for a specified period, with the principal reverting to the donor or going to other person(s) at the end of the period.
Charitable Sector: Refers to the nonprofit sector emphasizing the support and the mission of those organizations to help others.
Charitable Remainder Trust: A gift plan that provides income to one or more beneficiaries for their lifetimes, a fixed term of not more than 20 years, or a combination of the two. Assets, usually cash, securities, or real estate, are transferred to a trust which pays income to the beneficiaries for the term of the trust. When the trust term ends, the remainder in the trust passes to a nonprofit organization. Can also be established as a as a Charitable Remainder Unitrust (CRUT) with a variable payout.
Chart of Accounts: A list of all accounts used in accounting system, including assets, liabilities, income, and expenses.
Charter: The legal organizational document for a nonprofit; also known as the articles of incorporation or articles of organization; may also refer to a formal description of responsibilities assigned to a committee, a chapter, or an affiliate.
Chief Executive Officer (CEO): The top staff position of an organization, also called executive director at many nonprofits.
Civic: Relating to or of a citizen, city, or citizenship.
Civic Duty: To participate as a citizen in citizenship related actions.
Civic Engagement: A person’s connections with the life of their communities.
Civic Responsibility:A person’s duty or obligation to their community as a citizen.
Civil Rights: Rights guaranteed to citizens; the specific rights provided by the 13th and 14th amendments of the United States Constitution.
Civil Society: A set of intermediate associations which are neither the state nor the extended family; civil society therefore includes voluntary associations and firms and other corporate bodies.
CodeofConduct
Code of Conduct: The formal or informal ethical standards expected of every member of a group, whether board, staff, or member of a profession.
Collaborate: To cooperate or work with another person or organization.
Collateral: An asset which is pledged to a lender until a loan is repaid. In case of default, the lender has the legal right to obtain or sell the collateral to repay the loan.
Collections: Works of art, historical treasures, or similar items that may not decline in value. Nonprofits must select a policy for recording collection items and consistently apply it to all collections. Some nonprofits choose to expense acquisitions and contributed collection items immediately. If the collection is capitalized, then depreciation need not be taken if the economic benefit of the asset is not consumed over time.
Comprehensive Campaign: Fundraising initiative which can raise money for an array of projects or for endowment, counts every dollar raised and pledged during the period of the fundraising drive.
Committed Grant: A contribution for which the organization has received a formal notification from the donor that an award will be made at a future date.
Common Good: Involves individual citizens having the commitment and motivation to promote the welfare of the community (even if they must sacrifice their own time, personal preferences or money) to work together with other members for the greater benefit of all.
Commons: Resources which are not owned, either privately or by the state, but are left open for free use by all comers.
Commonwealth: The shared good of the whole group of people.
Community: Group of people living in the same area and under the same government; a class or group having common interests and likes.
Community Capital: Features of social life-norms, and trust that enable participants to act together more effectively to pursue shared objectives.
Community Foundation: An organization that makes grants for charitable purposes in a specific community or region. Funds are usually derived from many donors and held in an endowment independently administered; income earned by the endowment is then used to make grants. Typically, a community foundation serves an area no larger than a state. Community foundations provide an array of services to donors who wish to establish endowed funds without incurring the administrative and legal costs of starting independent foundations.
Community Philanthropy: A form of organized giving in which community members engage in decision-making and contribute their own resources to build an inclusive and equitable society.
Community Service: Volunteering to improve upon the aspects of a community.
Community Service Education: Experiential teaching and learning where the focus is on acts of helping and caring for others, particularly the less fortunate.
Company-sponsored Foundation: A private foundation whose corpus is derived from a profit-making corporation or company and whose primary purpose is the making of grants. The company-sponsored foundation may maintain close ties with the donor company, but it is an independent organization, most often with its own rules and regulations (like those of other private foundations). Companies form foundations to enable them to invest in philanthropy with funds that otherwise would be subject to capital gains tax or income tax, and to make maximum use of the corporate charitable deduction.
Compilation: A financial report that has been prepared by, but not reviewed or audited, by a Certified Public Accountant (CPA). The financial reports have not been tested or verified and the CPA states no opinion about the accuracy of the statements. See audit and review.
Concern: Something to consider; something that affects one’s business or affairs.
Condition: The mode or state of existence of a thing or person; a circumstance that is found to be necessary to the occurrence of another; a provision in a contract or will that leaves room for modification or changes at a future date.
Conditional Promise to Give: A commitment by a donor to make a contribution to the organization if a specific requirement is met. The agreement becomes binding once the requirement is met.
Confidentiality Clause: A policy defining unauthorized and improper disclosures of confidential information.
Conflict of Interest: A situation in which the personal or professional concerns of a member of the board or staff may affect his or her ability to put the welfare of the organization before benefit to self or another party.
Conflict Resolution: To solve an outstanding problem or issue by peaceable means.
Consent Agenda: A component of the meeting agenda that groups routine items and resolutions as one agenda item; does not require board discussion prior to the vote; requests for an item to be moved from the consent agenda to the regular agenda are automatically granted.
Consensus: A general agreement; a collective opinion.
Consequence: The natural result from a preceding condition or action; the effect.
Constitution: Usually refers to the basic documents governing an organization’s purpose, structure, and governance.
Constituent Relationship Management: (CRM) Software that allows you to record, track, and report on information about your relationships with supporters. Sometimes it’s also referred to as a database or called donor management software.
Constituency: All people who have in some fashion been involved with the institution seeking support; consists of members, contributors, participants (past or present), clients, and relatives of clients.
Consultant: An expert providing professional advice or services, who is hired by an organization for the purpose of recommending solutions to problems and generally providing advice and guidance related to fundraising efforts.
Contribute: To give something to someone.
Contribution: A transfer of cash or other assets to a nonprofit or a settlement or cancellation of a liability in a voluntary nonreciprocal transfer. This includes unconditional promises to pay cash or other assets in the future. To be recognized as revenue, there must be documentation to verify a promise was made and received.
Conversion Foundations: A type of private foundation formed from the sale proceeds of a tax-exempt entity, such as a hospital or health insurer.
Cooperate: To work together toward a common cause.
Corporate or Company-sponsored Foundation: A private foundation whose grant funds are derived primarily from the contributions of a profit-making business organization.
Corporate Foundation: A company-sponsored, private foundation that derives its grantmaking funds primarily from the contributions of that for-profit business. While close ties are often maintained, it is a separate, legal organization, sometimes with its own endowment, and is subject to the same rules and regulations as other private foundations. There are more than 2,000 corporate foundations in the United States holding some $11 billion in assets.
Corporate Giving Program: The direct giving or grantmaking program established and administered within a for-profit company and do not have a separate endowment. Expenses are planned as part of the company’s annual budgeting process and usually funded with pre-tax income. Giving directly from corporate profits is not subject to the same reporting restrictions as giving from private foundations. Some companies may make charitable contributions from corporate profits, operating budgets, or company-sponsored foundations.
Corporate Philanthropy: Support through gifts, equipment, supplies, or other contributions by business firms to charitable institutions, sometimes through organized programs that may include corporate foundations.
Corporate Social Responsibility: Integration of positive social causes into business practices.
Corporate Sponsorship: A relationship between a nonprofit and a company where the nonprofit receives monetary support, goods, or services in exchange for public recognition of the company.
Corporation: A legal entity that exists in perpetuity until it is dissolved; a “fictitious person,” separate from its managers or governors, usually given the same rights and obligations as natural persons.
Cost-reimbursement Grant: A funding agreement that reimburses specified costs incurred by the nonprofit in the performance of a specific program activity.
Crowdfunding: Raising funding for a project or venture by soliciting many small donations from many people, generally online. In an online crowdfunding campaign, the fundraiser creates a personalized page on a site that allows them to collect donations, share the page via social media channels and email, and update people on their progress.
Cultivation: A process of promoting or encouraging interest and/or involvement on the part of a potential donor or volunteer leader; an educative process to inform about an institution, reasons why it merits support.
Culture: The values, beliefs and perceptions of the world that are learned and are shared by members of a community or society, and which they use to interpret experiences and to generate behavior, and that are reflected in their own behavior.
Current Asset: Investments, receivables, or tangible and intangible property that is expected to be converted to cash within one year.
Current Liability: A debt or obligation due within one year.
Current Portion of Long-term Debt: The amount of the principal payments due and payable on loans within the next twelve months if the original term of the loan is longer than one year.