Julep’s Nonprofit Glossary

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P&L: Abbreviation for Profit and Loss, a report that shows income and expenses for a specific time. See Income Statement or Statement of Activities.

Partnerships: Design, strategy, facilitation or management of multi-funder or multi-grantee projects.

Pass-through Funds: Funds received by an organization that must be spent on behalf or passed through to a secondary recipient. Examples include re-granted funds and direct payments to beneficiaries.

Payout Requirement: The minimum amount that a private foundation is required to expend for charitable purposes (includes grants and necessary and reasonable administrative expenses). In general, a private foundation must pay out annually approximately 5% of the average market value of its assets.

Peer-to-Peer Fundraising:A type of online fundraising campaign where individuals create personal fundraising pages and solicit donations on behalf of your organization from their friends, family, and extended personal networks. Also known as Social Fundraising.

Permanent Fund: See Endowment.

Permanent Restriction: A donor-imposed restriction that states all or part of a fund may be used under specified circumstances.

Permanently Restricted Asset: Tangible or intangible property subject to contributor-imposed restrictions on use that can never be removed.

Permanently Restricted Net Assets: The portion of the net assets limited by donor-imposed stipulations that will not expire with time or be fulfilled by actions of the organization. True endowments are permanently restricted funds.

Permanent Restriction: A donor-imposed restriction that states all or part of a fund may be used under specified circumstances.

Philanthropic Foundation: A corporation or trust that has been created through contributed funds, whether by an individual, family, corporation, or community, for support of nonprofit organizations, and to which such organizations may appeal for grants in support of their programs and projects.

Philanthropist: Broadly speaking, anyone who makes a gift, but usually used to describe a wealthy individual known for his or her exceptional generosity in support of charitable causes.

Philanthropy: The origin of the word is Greek and means love for mankind. Today, philanthropy includes the concept of voluntary giving by an individual or group to promote the common good. Philanthropy also commonly refers to grants of money given by foundations to nonprofit organizations. Philanthropy addresses the contribution of an individual or group to other organizations that in turn work for the causes of poverty or social problems-improving the quality of life for all citizens. Philanthropic giving supports a variety of activities, including research, health, education, arts and culture, as well as alleviating poverty.

Pilot: A grant to assist a new program or project which is specifically designed to be carried out as a test, usually on a smaller scale, of the feasibility and effectiveness of the program or project before it is fully implemented.

Pitch Letter: A relatively long piece of content sent to reporters and other possibly interested parties.

Planned Gifts: These are pledges to give in the future, usually after the donor’s death. The simplest kind of planned gift is a bequest or estate gift, which occurs when someone leaves money to a charity in his or her will. More complex planned gifts include charitable remainder trusts (in which income from a large donation invested as a trust is distributed to a beneficiary during his or her lifetime; when the beneficiary dies, the trust’s remaining money is given to the charity). Also known as a Legacy Gift.

Planned Giving: The application of sound personal, financial, and estate planning concepts to the individual donor’s plans for lifetime and testamentary giving.

Pledge: A pledge is a signed and dated commitment to make a gift over a specified period, generally two or more years. It is payable according to terms set by the donor, with scheduled monthly, quarterly, semi-annual, or annual payments.

Pledges/Grants Receivable: Amounts committed to the organization by an outside donor. Rather than the full or gross amount that is due, these receivables are presented on the balance sheet at net realizable value (i.e., the amount the nonprofit expects to receive after considering an estimate of uncollectible pledges or grants receivable.)

Pluralism: The coexistence of distinct cultural, ethnic, or religious groups within a single society.

Policy: A written and binding guideline for action; creates limits on the range of acceptable options.

Post-grant Evaluation: A review of the results of a grant, with the emphasis upon whether the grant achieved its desired objective.

Preliminary Proposal: A brief draft of a grant proposal used to learn if there is sufficient interest to warrant submitting a proposal.

Prepaid expenses: Costs, such as insurance, paid in advance of receiving benefits are recorded as an asset. The asset value is reduced (with an offset to expense) as the benefit associated with the cost is consumed. For example, the benefit of insurance coverage is consumed with the passage of time. The asset value of prepaid insurance would be reduced each month with an entry to insurance expense as the insurance is used up.

President: A term used to describe either the chief volunteer officer or the chief staff officer of an organization.

Press Release: Announcements to mass media (newspapers, radio, TV etc).

Principal: A sum of money invested or owed which is separate from the interest.

Principal Gift: Commonly defined as being $1 million or more and donated with stewardship from savvy experts. Often these gifts are given as appreciated assets, such as stock purchased at a lower value that has become more valuable over time. The donor receives a tax write-off for the appreciated amount.

Private Action: A non-governmental, nonprofit event.

Private Foundation: A private foundation is a 501(c)(3) organization that is originally funded from one source, that derives revenue from earnings on its investments, and that makes grants to other charitable organizations as opposed to administering its own programs. Gifts to private foundations are not normally as advantageous to the donors as gifts to a public charity. Note that there is no technical definition in the federal income tax law.

Private Inurement: Benefits received by an insider with sizable influence over a nonprofit organization’s decisions when benefit is of greater value than service provided.

Pro bono: Used to describe work or services done or performed free of charge for charity or a nonprofit organization.

Project Budget: An itemized list of all estimated support, revenue, and expenses that an organization anticipates receiving for a specified project.

Project Management: Conduct of a specific grant program or initiative.

Property: Any object of value owned or lawfully acquired as real estate; a piece of land.

Property & Equipment: The Asset value of the physical items an organization owns such as buildings and improvements, equipment, and furniture that will be used for more than one year. Often called fixed assets.

Proposal: A written request or application for a gift or grant that includes why the project or program is needed, who will carry it out, and how much it will cost.

Prospect Mailing: Sending mail to prospects to acquire new members or donors.

Prospective Donor: Any logical source of support, whether individual, corporation, organization, government at all levels, or foundation; emphasis is on the logic of support.

Program Expenses are the costs associated with the delivery of goods and services to beneficiaries, customers or members that fulfill the organization’s mission.

Program Grant: A grant that is used to fund a particular program usually including salaries or personnel related costs.

Program Officer: A staff member of a foundation or corporate giving program who reviews grant proposals and requests, and processes applications for the board of trustees, recommend policy, and manages the budget. Also referred to as a Corporate Affairs Officer, Program Associate, Public Affairs Officer, or Community Affairs Officer.

Program-related Investment: A loan or other investment made by a private foundation to a profit-making or nonprofit organization for a project related to the foundation’s stated purpose and interests. Program related investments are an exception to the general rule barring jeopardy investments. Often, program related investments are made from a revolving fund; the foundation generally expects to receive its money back with limited, or below-market, interest, which then will provide additional funds for loans to other organizations. A program related investment may involve loan guarantees, purchases of stock or other kinds of financial support.

Program Service Revenue: Exchanges between a nonprofit and another party in which the nonprofit provides a service in exchange for a transfer of cash or another asset. For example, nonprofits may receive fees from governmental agencies or from clients they serve.

Program-specific Audit: A systematic financial examination of an organization by an independent body of an individual program rather than the entity.

Program Support Grant: A funding agreement supporting a specific program or project.

Principal: The amount of money that is borrowed and that the borrower must pay back to the lender. The interest, or price of borrowing, is added to the principal.

Principal Gift: Depending on the organization, a gift of several hundred thousand to millions of dollars; high-dollar gifts made by fewer individuals.

Promissory Note: See Note Payable.

Public: Pertaining to or affecting the people or community; for everyone’s use; widely or well known.

Public Charity: A nonprofit organization that is exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code and that receives its financial support from a broad segment of the public. Religious, educational, and medical institutions are deemed to be public charities. Other organizations exempt under Section 501(c)(3) must pass a public support test (see Public Support Test) to be considered public charities or must be formed to benefit an organization that is a public charity. Charitable organizations that are not public charities are private foundations and are subject to more stringent regulatory and reporting requirements. See Private Foundation or Supporting Organization.

Public Foundations: A tax-exempt, nonprofit, publicly supported charitable institution whose primary purpose is grantmaking to multiple organizations and whose sources of annual support are a mix of private and public donations.

Public Good: Any good that, if supplied to anybody, is necessarily supplied to everybody, and from whose benefits it is impossible or impractical to exclude anybody.

Public Policy: Planning and conduct of advocacy and other efforts to influence social policy.

Public Service: To perform a deed that contributes to the general welfare of all.

Public Support Test: There are two public support tests, both of which are designed to ensure that a charitable organization is responsive to the public rather than a limited number of persons. One test, sometimes referred to as 509(a)(1) or 170(b)(1)(A)(vi) for the sections of the Internal Revenue Code where it is found, is for charities like community foundations that mainly rely on gifts, grants, and contributions. To be automatically classed as a public charity under this test, organizations must show that they normally receive at least one-third of their support from the public (including government agencies and foundations). However, an organization that fails the automatic test still may qualify as a public charity if its public support equals at least 10 percent of all support and it also has a variety of other characteristics–such as a broad-based board– that make it sufficiently “public.” The second test, sometimes referred to as the section 509(a)(2) test, applies to charities, such as symphony orchestras or theater groups, that get a substantial part of their income from the sale of services that further their mission, such as the sale of tickets to performances. These charities must pass a one-third/one-third test. That is, they must demonstrate that their sales and contributions normally add up to at least one third of their financial support, but their income from investments and unrelated business activities does not exceed one-third of support.

Publication 78: A list maintained by the IRS of organizations qualified to receive tax-deductible contributions.