Glossary

501(c)(3): Status of nonprofit organizations which are exempt from taxes due to their dedicated missions. Donations made to these organizations are tax-deductible.

Administrative Costs: The daily expenses associated with running an organization (rent, utilities, salaries, supplies, etc.).

Advocacy: Work that attempts to sway public opinion in favor of (or against) a cause, actions taken in support of a person or a group of people, or any work undertaken to influence policy.

Annual Giving Campaign: A campaign organizations repeat every year, typically for the purpose of raising unrestricted funds to cover operating expenses.

Annual Report: A report to stakeholders and the public in order to disclose financial details and demonstrate the impact of an organization.

Award Letter: A letter sent to notify an organization that a project has been funded or a grant or sponsorship has been approved. This letter generally states the amount and purpose of the award and outlines any legal or reporting requirements.

Board of Directors: The governing body of an organization, often tasked with setting strategy and overseeing the organization’s operations.

Bylaws: Rules that govern a nonprofit’s operations.

Capacity Building: Activities and/or investments that increase a nonprofit’s ability to fulfill their mission in the long term.

Capital Project: A project to construct or improve a facility.

Case Statement / Case for Support: Written material produced for the purpose of garnering support (particularly financial support) for an organization’s mission.

Cause Marketing: Marketing efforts by a for-profit company to bring awareness to or raise money for a cause or a specific organization. The arrangement benefits the cause or nonprofit directly and benefits the business by boosting their reputation as a good corporate citizen.

Community Development Block Grant: Federal funding through the US Department of Housing and Urban Development (HUD) that passes through to state and local governments who then decide which organizations and projects will be funded.

Community Development Organizations: Organizations that provide a wide range of programs in order to improve the lives of people in their community, typically through economic development, education, and the meeting of immediate needs.

Community Foundations: Groups that pool together donations, usually to give grants to local charities and other nonprofits.

Conversion / Conversion Rate: The number of people who performed a desired action (subscribed to your newsletter through your website, for example) out of the total number possible (total website visitors, for example).

Crowdfunding: Campaigns for collecting donations from many people (typically online) to reach a fundraising goal.

CTA (Call To Action): a prompt on a website, in an email, or elsewhere on the internet that encourages people to take an action (Buy Now, Subscribe, Learn More, etc.). Usually the CTA is a button that stands out and grabs attention.

Development / Resource Development: The process of gathering the resources necessary to carry out the mission of a nonprofit organization, typically through writing grants, requesting donations, and fundraising. Community outreach, networking, and MarCom (marketing and communications) are secondary activities vital to these efforts.
Note: “Development” also usually refers to the person, team, or department responsible for Resource Development.

Donor: A person, group of people, business, or organization that donates money, goods, services, or time.

Earmarks: Money or resources that are set aside (usually by the government) for a specific purpose.

Endowment: A gift to a nonprofit organization. Usually an endowment must be used for a specific purpose and is governed by strict rules. Often, endowments are used as investments and only the income investment may be used by the organization.

Event Sponsor: A business, organization, or person that donates money to a nonprofit fundraising event, usually in exchange for specific benefits related to publicity or marketing.

Executive Director: The leader of an organization. The ED manages finances, staff, programs, volunteers, and everyday operations, answering only to the Board of Directors.

Form 8283: A tax form for reporting non-cash donations to charities taken as tax deductions.

Form 990: A form used by the IRS to collect information about tax-exempt nonprofit organizations. Generally, most nonprofits must file a Form 990 every year to report revenue, expenses, and general information about the organization.

Foundation: A nonprofit organization whose main purpose is to fund other nonprofit organizations.

Fundraising Event: A special event (gala, dinner, walkathon, tournament, etc.) held for the specific purpose of raising funds for a nonprofit.

Giving Tuesday: A day to promote charitable donations. Many organizations hold donor campaigns on Giving Tuesday. In the United States, Giving Tuesday is the first Tuesday after Thanksgiving.

Grant: Money given to an organization by the government, a foundation, or another person or organization, usually for a specific purpose. Grants do not need to be repaid.

Grant Report: A report that provides information to a grantor about the success of the funded project. Reporting requirements vary widely from grant to grant.

Grassroots: Involving common people and community members in a movement, as opposed to management, leadership, or the elite members of an organization or political party.

In-Kind Donation: Donation of goods or services as opposed to money.

KPI: Key Performance Indicator. In marketing, KPIs measure the effectiveness of campaigns and marketing efforts. Metrics generally include revenue, conversions, client satisfaction, etc. KPIs can be any metrics that make sense for an organization’s strategy.

Live Auction: An auction typically conducted during a fundraising event with the goal of raising money for a nonprofit.

Mission Statement: A statement that succinctly describes the nonprofit’s purpose and the problems it is trying to solve.

Operating Expenses: Overhead, or expenses of day-to-day operations such as salaries, rent, and transportation.

Pass-Through Grant: A federal grant that awards funds to state governments, which then use it to make awards to local governments and nonprofit organizations.

Peer-to-Peer fundraising: Fundraising where supporters of a cause or organization collect donations from their peers (for example, getting sponsors for a 5k).

Planned Giving: Donations that are to be given to an organization in the future, usually when the giver dies.

Program Costs / Expenses: Costs directly to running the programs or providing the services offered by a nonprofit.

Raffle: Game of chance where everyone who purchases a ticket or number has an equal chance of winning, often used to raise funds at special events.

Restricted Funds: Funds that are donated for a specific purpose designated by the donor, grantor, or sponsor, which legally must be used for those exact purposes.

ROI: Return on Investment. A way to judge the success or failure of marketing endeavors based on cost and benefit.

SEO: Search Engine Optimization. The process of making your website more competitive for higher placement on SERPs (Search Engine Results Pages).

Silent Auction: An auction where people bid on items in writing or electronically instead of out loud or by raising paddles in a live auction.

Stakeholders: People and groups affected by and/or invested in the outcomes of a nonprofit’s programs. Stakeholders include the community served, the staff, the Board of Directors, donors, volunteers, etc.

Stewardship: The process of thanking donors and building relationships with them.

Sustainability: A nonprofit’s ability to succeed in fulfilling its mission and achieving its goals over the long term.

SWOT Analysis: A step in the planning process where planners evaluate current conditions by examining SWOTs (Strengths, Weaknesses, Opportunities, and Threats).

UBIT: Unrelated Business Income Tax. The tax nonprofit organizations must pay on revenue brought in by selling products or services through activities that are not part of their charitable mission.

Unrestricted Funds: Funds that are donated to an organization to use as they see fit, for no specific purpose.