Julep’s Nonprofit Glossary
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Days Cash on Hand: A calculation of the number of days that an organization could continue to pay its operating expenses with current cash balances. It serves as a simple measure of the short-term financial stability of an organization.
Debt: An amount owed to a person or organization for money borrowed. Common types are Loans, Promissory Notes, Bonds, or borrowed funds.
Decline: The refusal or rejection of a grant request. Some declination letters explain why the grant was not made, but many do not. Also known as Denial.
Declining Grant: A multi-year funding agreement that becomes smaller each year.
Deferred Revenue: Grants received from donors that have not been recognized as revenue because the conditions of the grant have not been met. Also, payments received for services that have not been rendered yet, such as an advance payment for a class.
Deficit: Expenses in excess of income; an operating loss or a negative Change in Net Assets.
Deliberate: To say or do something intentionally; to plan in advance.
Demonstrate: To show or prove by reasoning or evidence; to make a public protest.
Demonstration Grant: A grant made to establish an innovative project or program that will serve as a model, if successful, and may be replicated by others.
Depreciation: The recognition, by recording an expense, of the decrease in value of a fixed asset over its expected physical or economic life.
Designated Funds: A type of restricted fund in which the fund beneficiaries are specified by the grantors.
Designated Gift: A restricted or commemorative gift made for a specific purpose and designated for a specific use.
Determination Letter: An official notification by the IRS stating that a nonprofit is recognized as a tax-exempt organization.
Development: Refers to all dynamics of a continuing fundraising program, including annual giving, special gifts, and planned gifts.
Direct Charitable Expense: Cost for activities that primarily benefit the charitable or public sector.
Direct Costs: Those expenses which are used for a program area or cost center. Costs may be exclusively for that purpose or may be allocated between several uses.
Director of Development: The individual who heads an organization’s development program, with either this title or another, such as vice president for development or vice president for external affairs and development.
Direct Lobbying: Refers to attempts to influence a legislative body through communication with a member or employee of a legislative body, or with a government official who participates in formulating legislation.
Direct Mail: Solicitation of gifts or volunteer services and distribution of information pieces by targeted mass mailing. These can be through postcards, flyers, brochures, or anything that passes USPS requirements.
Direct Public Support: Contributions received directly from the general public.
Director: Person selected by the membership of a nonprofit corporation or the board of directors to serve as a person in charge of the overall policy of a nonprofit organization, including the selection of officers.
D&O Insurance: Insurance that protects board members and top staff personnel from personal liability created by board decisions or actions.
Disclosure: A form on which board members annually detail personal and professional connections that could create a potential conflict of interest.
Disclosure Requirement: Regulations requiring nonprofits to share financial or other information with the public, defining IRS form 990 as a public document.
Discretionary Fund: Grant fund distributed at the discretion of one or more trustees, which usually do not require prior approval by the full board of directors. The governing board can delegate discretionary authority to staff.
Disqualified Person (Private Foundation): Substantial contributors to a private foundation, foundation managers, certain public officials, family members of disqualified persons and corporations and partnerships in which disqualified persons hold significant interests. The law bars most financial transactions between disqualified persons and foundations. See Self-Dealing.
Disqualified Person (Public Charity): As applied to public charities, the term disqualified person includes (1) organization managers, (2) any other person who, within the past five years, was in a position to exercise substantial influence over the affairs of the organization, (3) donors and donor advisors with regard to transactions with a particular donor advised fund, (4) investment advisors to assets of donor advised funds, (5) and disqualified persons of supporting organizations who are also disqualified persons of the supported organization, (6) family members of the above, and (7) businesses they control. Paying excessive benefits to a disqualified person will result in the imposition of penalty excise taxes on that person, and, under some circumstances, on the charity’s board of directors. See Intermediate Sanctions.
Dissolution of Nonprofit: The formal procedure by which an organization ceases to operate or exist; involves filing with the state and distribution of assets.
Distribution Committee: The board responsible for making grant decisions.
Diversification: The great range of individual differences that exist in each species.
Diversity: All the ways in which people differ, and it encompasses all the different characteristics that make one individual or group different from another. It is all-inclusive and recognizes everyone and every group as part of the diversity that should be valued. A broad definition includes not only race, ethnicity, and gender— the groups that most often come to mind when the term “diversity” is used — but also age, national origin, religion, disability, sexual orientation, socioeconomic status, education, marital status, language, and physical appearance. It also involves different ideas, perspectives, and values.
Donated Goods: Non-cash donation of physical goods, such as the donation of supplies instead of cash.
Donated Services: Record donated services as revenue and an expense and/or asset if the services would otherwise need to be purchased if specialized skills are required and if the provider of the services has those skills.
Donated Use of Facilities: Recognize revenue and a prepaid asset when a lease is finalized to the extent the organization receives a below market rate for use of facilities. Reduce the asset and recognize expense as time passes and the lease is used up.
Donee: A charitable organization receiving gift pledges.
Donor: The individual, organization, or institution who has made a gift or pledge of something of value to an organization in either the current fiscal year or in the immediate past fiscal year. Also known as supporter or prospect.
Donor Acquisition: The process of identifying and obtaining donors.
Donor Advised Fund: (DAF) A fundraising vehicle that operates like a charitable investment account: a donor contributes to this account over time for an immediate tax benefit and then recommends grants to their favorite charity when they are ready. The funds are started by donors through commercial investment companies or at community foundations. In a donor-advised fund, donors put money into their accounts, receive tax benefits, and then can direct money to a charity whenever they want. Donors are not required to donate any minimum amount per year. A fund may be classified as donor advised if it has at least three characteristics: (1) a donor or person appointed or designated by the donor has, or reasonably expects to have, advisory privileges with respect to the fund’s distributions or investments, (2) the fund is separately identified by reference to contributions of the donor(s), and (3) the fund is owned and controlled by a sponsoring organization, such as a community foundation. A fund possessing these characteristics may be exempt from the donor advised fund classification if it grants to one single public charity or government unit or if the fund meets certain requirements applicable to scholarship funds.
Donor or Committee Advised Fund: A fund held by a community foundation where the donor, or a committee appointed by the donor, may recommend eligible charitable recipients for grants from the fund. The community foundation’s governing body must be free to accept or reject the recommendations.
Donor Database: The list of people who’ve given to your organization, either recently or at some point in the past. It might also include people who are strong potential donors, such as volunteers or anyone who has attended one of your events. A donor database will include things like contact information, when and how much a person gave, whether they’re recurring donors, and how often they volunteer with your nonprofit.
Donor Designated Fund: A fund held by a community foundation where the donor has specified that the fund’s income or assets be used for the benefit of one or more specific public charities. These funds are sometimes established by a transfer of assets by a public charity to a fund designated for its own benefit, in which case they may be known as grantee endowments. The community foundation’s governing body must have the power to redirect resources in the fund if it determines that the donor’s restriction is unnecessary, incapable of fulfillment, or inconsistent with the charitable needs of the community or area served.
Donor-directed Gift: A gift or bequest to a foundation, organization, or institution whose donor specifies to whom the money should be distributed.
Donor-imposed Condition: A condition specified by a donor that will release them from an obligation.
Donor-Imposed Restriction: A donor-imposed condition, temporary or permanent, that specifies a use or uses for a contribution.
Donor List: A list of contributors prepared for a particular purpose or in conjunction with building lists for the future.
Donor Profile: A description of basic information about an individual donor through research.
Donor Recognition: The policy and practice of recognizing gifts, first through immediate acknowledgment by card or letter and subsequently through personalized notes, personal expressions of appreciation directly to donors, published lists of contributors, and other appropriate ways.
Donor Relations: Planned program of maintaining donor interest through acknowledgments, information, personal involvement, and the like.
Donor Retention: The percentage of people who repeatedly support your organization and are typically calculated by year.
Drop Date: Date on which direct mail letters must be delivered to a post office for mailing.
Due Diligence: An expectation that a board member exercises reasonable care and follows the business judgment rule when making decisions.
Due to Third Parties: Certain nonprofit organizations, such as the United Way and federated membership organizations, collect contributions from one group and transfer them to another nonprofit. When these organizations are operating as a transfer agent with no variance power to change the recipient, then the associated cash receipts are not recorded as revenues by the transfer agent, rather they are carried as liabilities.
Duty of Care: A requirement that board members be reasonably informed about the organization’s activities, participate in decisions, and do so in good faith and with the care of an ordinarily prudent person in similar circumstances.
Duty of Loyalty: A requirement that a board member remain faithful and loyal to the organization and avoid conflicts of interest.
Duty of Obedience: A requirement that a board member remain obedient to the central purposes of the organization and respect all laws and legal regulations.