Glossary

The nonprofit world is full of jargon, acronyms, and terms with special meanings in the nonprofit or fundraising context. Use this glossary to familiarize yourself with some of the words you'll hear over and over so you know what they mean and how to use them correctly.

A B C D E F G H I J K L M O P Q R S T U V W X Y Z

A

  • Allocation: The process of determining which grant or contract budgets can be used to pay for which expenses. Commonly used when discussing staff salaries and which staff members to allocate to a given grant or contract. Not to be confused with designation.

B

  • Bequest: Money donated (bequeathed) to an organization in a person’s will after they die. Also referred to as planned giving.
  • Board-designated funds (BDF): Any money whose specific purpose is decided by a Board. This can be a nonprofit Board designating money that they have received or a foundation Board designating money that they are giving away.
  • Boilerplate: Any written text that can be reused in new contexts or applications without significant changes to the original.
  • Budget modification: A formal change in a grant budget. This may be requested by a nonprofit if they need to make a change to how a grant is being spent and that change amounts to 10% or more of the total grant value.

C

  • Capital campaign: A large scale, generally lengthy fundraising campaign to raise significant funding for a capital project, which is generally a physical space, equipment, land, or anything that would be considered a “hard” cost.
  • Capital funding: Restricted funding that is generally raised for a brick-and-mortar location or other longtime use.
  • Community Board member: A Board member who is a member of the population of those your organization’s mission serves, or one with programmatic expertise of your mission’s population. These Board members are often not subject to the Board’s give/get minimum to maintain their Board membership.
  • Community-led: Decisions or actions that are determined or highly influenced by the community your organization’s mission supports.

D

  • Depreciation: An accounting term that refers to a reduction in the value of an asset with the passage of time, due in particular to wear and tear.
  • Designation: The process of determining the overall program or function that a grant will support, like youth counseling or general operating support. Not to be confused with allocation.
  • Donor-advised fund: A type of fund, usually managed by a bank or a large foundation, that allows a donor to invest money that they will then donate to various causes at their discretion. Many high-worth individuals use these to donate to nonprofit organizations.

E

  • Evidence-based: A term referring to programmatic activities that have scientific evidence supporting the actions that are taken. Many funders look for evidence-based practices to prove that a program will be, or can be, successful and meet its objective.

F

  • Fixed asset: In accounting terms, a fixed asset is also known as a capital asset; this is a tangible piece of property, plant, or equipment (PP&E) that you own or manage with expectations that it will continuously generate income.
  • Fringe: In a budget, the cost associated with staff benefits (e.g., health insurance) and required payroll taxes (e.g., FICA). Usually calculated as a percentage of salaries on a budget and added to those salaries for the total personnel cost.
  • Funding pause: When a funder temporarily suspends funding.

G

  • Ghost asset: An asset that cannot be physically accounted for yet appears on a stock list, impacting costs and operations.
  • Give/get: The annual requirement of each member of a Board of Directors to fundraise for the organization: to give their own money as donations and get other people to donate to the organization.
  • Governance: A set of principles, methods, and processes that are required to make strategic decisions in the organization’s best interest while also providing oversight and accountability. 

H

    I

    • Indirect cost rate: A flat percentage rate of a budget that funds administrative and/or overhead costs. The percentage may vary from grant to grant due to funder requirements. Certain government funders require indirect rates to be calculated and submitted by external auditors for approval. 10% is a common indirect rate that can be applied without approval and is referred to as a de minimis rate. Many private funders will not allow indirect costs over 15%.
    • Innovative: Used to refer to an entirely new program or service delivery method. Certain kinds of funding are restricted to work that funders consider to be innovative, meaning that existing programs are likely not eligible for that funding.
    • Inputs, outputs, and outcomes: Terms used in the context of data collection and analysis. Inputs refer to whatever goes into a program or service delivery, such as the availability of counseling services. Outputs are the immediate results of the activity, such as the number of people who receive counseling services. Outcomes are the impact of those activities, such as the increase in mental wellbeing as a result of receiving counseling.
    • Institutional funder: A category of funder that includes private foundations, government agencies, and corporations.

    J

      K

        L

        • Level setting: Also referred to as “bringing everyone up to speed” or simply providing context, this is when you begin a meeting by laying out the objectives and goals of a conversation.
        • LOI/EOI: Letter of interest, AKA letter of intent, letter of inquiry, or expression of interest. A kind of “mini proposal” that institutional funders review before inviting organizations to submit full grant proposals.

        M

        • Matching requirement: When funding, typically public money, requires that a certain portion of funding for a project come from another source. For example, a local government may give a grant that can cover up to 75% of a project’s cost with a 25% matching requirement. The 25% remaining must come from another funder. In this example, a project that costs a total of $100,000 would be eligible to receive $75,000 from the local government and must use other funds to cover the remaining $25,000.
        • Mission drift: Organizations experience mission drift when they engage in significant activities that are outside of the organization’s mission and purpose, pulling focus away from the organization’s core services.

        N

        • No-cost extension: An increase in the time period a grantee has to spend a grant, but not in the amount of the grant itself (more time but not more money). This may be requested by a nonprofit if they cannot spend all of their grant money in the original time period.

        O

        • Operating reserve: Money an organization sets aside in a separate account to cover operating expenses in an emergency; also referred to as a “rainy day fund.”
        • OTPS: Other than personnel services. Any line on a budget that is not a personnel line or an indirect line, such as supplies or technology purchases.

        P

        • P2P: Peer to peer, or person to person. A term used in fundraising when a fundraiser speaks to an individual or couple/family about a donation. This is often used to define conversations made between individuals of the same general age.
        • Personnel: Accounting term meaning staff salaries as well as fringe benefits.
        • Private funder: A funder, like a foundation, corporation, or individual, who is not a government funder. In fundraising, private revenue can come from many different sources but is best understood in contrast to government (public) revenue.
        • Process: The steps needed to complete an activity.
        • Program/Service Delivery: The specific process of how you provide help to those you serve. For example, we feed those experiencing homelessness by offering two meals per day in our community center, 5 days a week.
        • Programmatic enhancement: Revenue that is made to enhance a current program. This funding is not general support for the program but the addition of a new element. This could be an additional staff member or funding for specific supplies or technology.
        • Protocol: Standard actions or best practices to complete an activity
        • Public funder: A government funder – whether city, county, state, or federal. Public revenue comes from the government in the form of contracts and is derived from tax dollars.

        Q

        • QAQI: Quality assurance and quality improvement; the activities undertaken to assess a program’s effectiveness and make improvements as needed.

        R

        • Restricted revenue: Revenue that has limitations – restrictions – on how it can be spent. Typically this refers to purpose restrictions (a grant that can only be spent on a specific program or service), but there are also time restrictions (requiring that the revenue be spent in a certain time period) and budget restrictions (such as a grant budget that does not allow personnel costs). Compare to unrestricted revenue.
        • RFP: Request for Proposal; this term can be used for private or public funding.

        S

        • Scope change: This can be on behalf of your organization or a funder, but it means a change to the type of program they are willing to support. For example, if a funder was previously supporting middle and high school music programs, but now wants to only focus on elementary school, that is a scope change.
        • Scope of work: A detailed narrative description of how a project will be carried out. It defines project-specific activities, deliverables and timelines for an organization providing services under the grant.
        • Single Audit: An extremely confusing term referring specifically to an additional audit required for those organizations that receive $750,000 or more of federal funding in one year.
        • Soft credit: A way of crediting the efforts of one person for influencing another person to donate to an organization. Most commonly used in the context of Board giving to track the get portion of a Board member’s give/get.
        • Strategy: A thoughtful plan for future activities, built up of your tactics.
        • Supplemental funding: Additional funding for a program or project that is an add-on to either the original grant amount or the original project costs. Supplemental funding can come from the original funder or a different funder.
        • Sustainability: The ability of your program or organization to continue providing your current services and programs into the future after a specific funding line ends.
        • SWOT analysis: A form of analysis that asks you to list all Strengths, Weaknesses, Opportunities, and Threats for what you are analyzing.

        T

        • Tactics: The actions you take to accomplish your strategy.

        U

        • Unrestricted revenue: Revenue that can be spent on any purpose, program, service, or function. Unrestricted revenue can come in the form of general operating support grants, individual donations, bequests, and more. Compare to restricted revenue.

        V

        W

        X

        Y

        Z