Julep’s Nonprofit Glossary
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LAI Principle: The fundraising axiom of qualifying prospects based on Linkages, Ability, and Interest.
Lapsed Donor: Donor who gave last year or earlier but have not given this year. This individual deserves special attention because it’s more cost-effective to retain donors than it is to acquire new ones.
LYBUNT: (Last Year But Unfortunately Not This) A term used to refer to donors who contributed Last Year But Unfortunately Not This. They can be great prospects to reach out to during your year-end appeals. Also known as Lapsed Donors.
Leadership: The force within an institution, agency, program, or fundraising campaign that stimulates others to act or give.
Leadership Gift: A leadership gift is a large donation made by a single person, a small set of people, or a foundation at the very start of the fund drive. It is typically the largest gift of the drive and is used to inspire others to contribute.
Leadership Training: The education of those with or progressing toward a position of authority.
Leadership Transition: Support and planning to facilitate senior-level staff transitions and growth. Also known as Succession Planning and Leadership Development.
Leasehold Improvements: Remodeling, renovation, and upgrades to leased space to suit the tenants’ needs. The cost of improvements may be paid for by the landlord or by the tenant. When paid by the nonprofit tenant, the cost of improvements becomes an asset and is depreciated over the term of the lease.
Letter of Determination: A document issued by the IRS recognizing an organization’s tax-exempt status and providing its public charity classification.
Letter of Inquiry: (LOI) A brief letter outlining an organization’s activities and a request for funding sent to a prospective donor to determine if there is sufficient interest to warrant submitting a full proposal. This saves the time of the prospective donor and the time and resources of the prospective applicant. Also referred to as a Query Letter.
Letter of Intent: A prospective donor’s intention to make a gift. The letter may also contain the prospective donor’s wishes as to the specific type, size, and purpose of the gift. Usually, such a letter is not legally binding but does assist the donor and institution in planning.
Letter of Support: A personalized communication from a stakeholder to a potential funder expressing their support of a grant application.
Legacy: Personal property, money, and other valuables that are bequeathed by will; anything that is handed down from an ancestor, predecessor, or earlier era. A demonstrative legacy is a legacy payable primarily out of a specific fund. A specific legacy is a legacy of a particular article or specified part of the estate.
Legacy Society: Usually comprised of donors who’ve left a gift in their estate plans for the organization; some organizations have formal societies depending on their size.
Leverage: A method of grantmaking practiced by some foundations. Leverage occurs when a small amount of money is given with the express purpose of attracting funding from other sources or of providing the organization with the tools it needs to raise other kinds of funds. Also known as the Multiplier Effect.
Liability: An accounting, an organization’s legal debts or obligations recorded on the statement of financial position.
Life Income Gift: An irrevocable gift of cash, securities, or real estate to a gift-supported organization, with the donor receiving income from the donated assets for a period through an annuity or trust arrangement for him- or herself or other beneficiaries.
Life Income Pooled Trusts: A charitable remainder trust that holds the com- mingled irrevocable gifts of donors who receive income annually based on the earnings of the trust and their individual entitlement as participants. On termination of an income interest, the underlying property is transferred to a charitable organization or institution.
Life Insurance Gifts: The irrevocable assignment of a life insurance policy for charitable disposition for which the present value is fully tax-deductible, as are the premiums paid by the donor.
Life Interest: An interest or claim that does not amount to ownership and that is held only for the duration of the life of the person to whom the interest is given or for the duration of the life of another person; an interest in property for life.
Limited-purpose Foundation: A type of foundation that restricts its giving to one or very few areas of interest, such as higher education or medical care.
Liquid Net Assets: The amount of unrestricted net assets that is not invested in property and equipment. This amount is the true amount of unrestricted net assets available as a cushion for unexpected problems or opportunities and to support operations. See Net Assets.
Liquidity: A measure of how much cash and assets that can be easily converted to cash, such as short-term investments, an organization has available for use in the immediate or near future.
Liability: In accounting, an organization’s legal debts or obligations recorded on the statement of financial position.
Loaned Executives: Corporate executives who work for nonprofit organizations for a limited time period while continuing to be paid by their permanent employers.
Lobbying: Efforts to influence legislation by influencing the opinion of legislators, legislative staff and government administrators directly involved in drafting legislative proposals. The Internal Revenue Code sets limits on lobbying by organizations that are exempt from tax under Section 501(c)(3). Public charities may lobby as long as it does not become a substantial part of their activities. Private foundations generally may not lobby except in limited circumstances, such as on issues affecting their tax-exempt status or the deductibility of gifts to them. Conducting nonpartisan analysis and research and disseminating the results to the public generally is not lobbying for purposes of these restrictions. Also see Public Charities and Private Foundations.
Lobbying vs. Advocacy: Advocacy is when nonprofit organizations advise stakeholders, legislators, or citizens on their own behalf to affect some aspect of society integral to the nonprofit’s mission. All nonprofits can advocate for measures that will affect their mission or the health and well-being of their clients. Lobbying is when one seeks to influence legislation.
Lobbyist: Someone who attempts to influence the votes of public officials, for or against, specific causes.
Long-term Debt/Liabilities: An obligation to pay a loan or other obligation with a maturity or due date of more than one year.