Julep’s Nonprofit Glossary
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Identification: The process of ascertaining, through investigation, research, and analysis, which of various candidates appear to be most promising as prospective leaders, workers, and donors.
Impact Investing: Relates to loans and other investments (as distinguished from grants) designed to achieve a grantmaker’s philanthropic purposes and interests.
Inclusion: Authentically bringing traditionally excluded individuals and/or groups into processes, activities, and decision/policymaking in a way that shares power.
Income Statement: A report that summarizes an organization’s financial transactions over a specified period. Also known as a Statement of Activities.
Incorporation: A legal process through which a group is created and recognized by the state as an entity separate from the individuals who manage or govern it; limits individual responsibility for actions of the group.
Incubator: A tax-exempt organization that has as its mission to act as a fiscal sponsor for organizations that have not yet been recognized as tax-exempt.
Indemnification: A guarantee by an organization to pay board members’ legal costs for claims that result from board service.
Independent Foundation: A grant-making nonprofit organization that is not closely associated with a for-profit business or family and are usually founded by one individual, often by bequest. Sometimes individuals or groups of people, such as family members, form a foundation while the donors are still living. They are occasionally termed “non-operating” because they do not run their own programs and make grants to other tax-exempt organizations to carry out their charitable purposes. Private foundations must make charitable expenditures of approximately 5% of the market value of their assets each year. Although exempt from federal income tax, they pay a yearly excise tax of 1 or 2% of their net investment income.
Independent Sector: A term used to describe all nonprofit organizations, as distinct from government and corporations formed to make a profit, also called the third sector.
Indicia: Mark on an envelope indicating a nonprofit mailing permit for reduced rate bulk mailing; used in place of stamps or meters.
Indirect Public Support: A contribution from the public received through campaigns conducted by federated fundraising agencies such as the United Way or through a related organization.
Individual Donors/Philanthropists: An individual or family who makes charitable contributions at significant levels over a sustained period, usually to the benefit of multiple organizations.
Infrastructure: An underlying base or foundation; the basic facilities needed for the functioning of a system.
Initiative: The ability to originate or follow through with a plan of action; the action of taking the first or leading step.
In-Kind Gifts: Donations of tangible goods to a charitable organization. By law, nonprofits cannot assign the gift a dollar value. Also known as In-kind Contributions, Gifts-in-kind, or Non-cash Contributions.
Intermediate Sanctions: Penalty taxes applied to disqualified persons of public charities (see Disqualified Person) that receive an excessive benefit from financial transactions with the charity. An excessive benefit may result from overcompensation for services or from other transactions such as charging excessive rent on property rented to the charity. Unlike private foundations, public charities are not barred from engaging in financial transactions with disqualified persons if the transaction is fair to the charity. Penalty taxes also may apply to organization managers, such as the charity’s board, that knowingly approve an excess benefit transaction.
International Grantmaking: Policies and procedures related to compliance with requirements governing international grants. Design of international grantmaking programs and partnerships with local NGOs.
Intestate: Without a will.
Internal Controls: The system of practices, procedures and policies intended to safeguard the assets of the organization from fraud or error and ensure accurate record keeping.
Internal Revenue Service: (IRS) The federal agency with responsibility for regulating foundations and their activities.
Inventory: The cost of finished goods held for sale by an organization, or the raw materials and works-in-process that will become finished goods. Recorded as an asset until the item is sold.
IRA Rollover: A type of donation that comes from a donor’s individual retirement account and can be as large as $100,000 from each year.
IRS 990: The standard federal reporting requirement for nonprofit organizations and private foundations. Most nonprofits are required to submit an annual information return to the Internal Revenue Service. The specific version is determined by the type of nonprofit, organization size, and activities.
IRS Letter of Determination: Official documentation given by the IRS verifying an organization’s tax-exempt status.
Inventory: Tangible property held for sale or materials used to make products that are held for sale.
Investments:
1. The value of stocks and bonds held as investments. In audited financial statements, the amount reported is the fair market value as of the balance sheet date.
2. A general term to describe financial Assets owned by an organization. The category is broad and may include stocks, bonds, and other financial instruments. Investments are subject to numerous accounting rules and standards.
Investment Income: Income earned from investments including dividends on stock and interest on bonds. Realized gains/losses on investment securities may be included in this account or as its own line item.
Involvement: The calculated effort, perennially undertaken by development offices, to stimulate interest and enthusiasm on the part of prospective donors and candidates for volunteer leadership through active participation in institutional affairs; an extension of cultivation.