501(c)(3) status A reference to the paragraph in the tax code that defines which types of organizations are recognized to be free from federal income taxes, defined as “organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes ….” See also tax-exempt status.

990 form An informational return required by the Internal Revenue Service for all nonprofits with incomes of $25,000 or more and for all foundations. Foundations file a special version of the form, the 990-PF.

ask As in “the ask,” the actual request for a specific amount of money in a grant cover letter or proposal.

board of directors The governing body of a nonprofit organization or foundation. See also trustee.

budget A statement of a program’s or organization’s expenses and sources of revenue (income).

budget narrative An explanation of key expenses or income items in a budget used to highlight particular expenses critical to the program, explain any exceptionally high or low expenses a funder might question, and describe how additional income for a program will be raised.

buzzword A term in fashion for a time typically used to describe an approach or technique. In an attempt to seem current, users frequently obfuscate, rather than elucidate, the issue.

capital support Grant for a major project that will have a long-term effect on a charity, usually for a building or endowment.

case statement The essential part of any funding request. It engages the reader, explains why the project or organization is worthy and needs support, and demonstrates the urgency with which funding is needed.

challenge grant A grant made by a funder to encourage additional contributions toward a program. The challenger’s grant is made conditional on a specific amount being raised to match it.

community foundation A public foundation receiving contributions from a wide segment of the population to support charitable purposes in a specific geographic area.

competitive grant A grant awarded on merit rather than financial need. All grants referred to in this book are competitive grants.

corporate foundation A foundation set up and administered by a corporation, but legally no different from other private foundations and governed by the same IRS regulations.

corporate giving office The office in a company responsible for making grants without the legal restrictions borne by the corporate foundation. It’s frequently the source for gifts of products, or in-kind gifts.

corporate sponsorship See sponsorship.

cover letter A letter accompanying a grant proposal to introduce the proposal and the organization to the funder.

cross-tabs Tabulations used in evaluation data whereby one set of data is counted in relationship to another set of data, such as counting the number of people from large charities rating the workshop excellent and comparing it to the number from small charities giving it an excellent rating to see which group was better served by the workshop.

cultivation A means of educating a funder or donor about a charity in preparation for a solicitation. This can be done through events, meetings, newsletters, and other methods of contact.

development See fundraising.

discretionary grant A trustee-designated grant that might lie outside the funder’s guidelines.

earned income Revenue not dependent on grants. Popular with funders because more earned income means less dependence on grants. Earned income can come from service fees, products sold, or even interest income.

executive summary A section of a grant proposal that puts forth the major reasons for the grant request with references to the budget and all major aspects of the proposal.

fair market value That part of a contribution that’s not tax-deductible because the donor has received something of value in return (such as a meal at a benefit dinner).

family foundation A foundation controlled by family members of its primary donor.

final report A report required by most funders at the end of the grant period describing the results and how the program was conducted, along with a budget showing how the funder’s grant was spent.

fiscal sponsorship A formal relationship between a nonprofit organization and an individual or an organization that’s unincorporated or in the process of seeking nonprofit status. The relationship is formed so the organization or person without nonprofit status has access to contributions from foundations, corporations, individuals, and government agencies.

formula grant A type of government grant used to reimburse your charity for services you’ve already performed based on a mathematical formula that, for example, might multiply the number of your clients by the average cost of providing a service in your city by some percentage the government has decided on.

foundation A private organization formed to make grants or carry out specific programs. See also operating foundation.

funders A generic term used to refer to foundation, corporation, and government grantmakers as a group.

fundraiser A generic term for anyone who raises money for a nonprofit organization, political candidate, or other cause. By law in some states, it refers specifically to someone who personally solicits money from someone and who may receive donations directly on behalf of the nonprofit or other cause. See also fundraising counsel.

fundraising The practice of soliciting money from a wide variety of sources for use by a nonprofit organization in pursuit of its mission. One aspect of fundraising is grant writing, but it also includes membership, direct mail, special events, and planned giving.

fundraising counsel Defined by law in some states as someone who aids a nonprofit in raising money but does not personally ask anyone for money and does not receive contributions on behalf of a nonprofit. Most freelance grant writers fall into this definition.

general operating support (GOS) A grant to pay for the everyday expenses all organizations have, such as rent, utilities, and insurance and also for personnel who are not involved in programs (like the grant writer). GOS can also help pay for programs, which is sometimes necessary when a program is just getting started.

goals Accomplishments that will have been achieved at the end of a program. See also objectives.

grant writing The skill or practice of asking for money in the form of a grant from a foundation, corporation, government agency, or individual by crafting a well-considered document (the proposal) that outlines how the money will be used, what receiving the money will accomplish, and who will undertake the tasks described in the proposal. Grant writing is one aspect of fundraising.

in-kind gifts Free goods or services donated by a funder in lieu of or in addition to a cash grant.

indirect expenses A portion of a charity’s general operating expenses that, although not a direct result of a program, is necessary to maintain the organization so it can run the program. Indirect expenses include rent, utilities, insurance, payroll charges, and administrative and fundraising personnel.

indirect rate A percentage that expresses the relationship between the total costs of running a charity and the portion of those expenses allocated to a particular program.

informational meeting A meeting with funders to pave the way for a grant proposal while pretending simply to be gathering information.

inquiry letter A letter written to a funder to see if a program would be of interest. This usually precedes a grant proposal and is required by some funders.

interim report A progress report required by some funders before the end of the grant period. It’s usually required when asking that a grant period be extended.

jargon See buzzwords.

matching grant A grant made to help meet a challenge grant. See also challenge grant.

metrics A term common in the corporate world meaning the measurable outcomes of a project.

need What a nonprofit’s program seeks to satisfy, which is the justification for seeking a grant.

need-based grants See formula grant.

nongovernmental organization (NGO) A nonprofit organization outside the United States.

nonprofit A term used to describe an organization “organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes” by the IRS. A nonprofit can make a profit (called a budget surplus); it’s just that profit is not the motivating factor. (Note that non-profit is also an acceptable spelling.)

objectives The measurable steps taken to reach a program’s goals or achieve the intended results. See also goals.

operating foundation A foundation that exists to carry out its own programs, usually making few if any grants.

organizational budgets A charity’s total operations, including all personnel and expenses and all sources of income.

outcomes method A means of organizing a grant proposal that focuses on the results anticipated at the end of the program. See also process method.

process method A means of organizing a grant proposal that focuses on the way a program will be carried out. See also outcomes method.

program Activities carried out to achieve a limited set of goals and objectives within a set period of time.

program budget All expenses directly related to a program and all income raised specifically for it.

program or project grant A competitive grant to support a particular program.

program officer (foundation) An employee of a foundation whose job is to answer questions from potential and current grantees, conduct initial proposal reviews, and prepare acceptable proposals for consideration by the foundation’s trustees. The responsibilities of the job vary by foundation.

program officer (nonprofit) An employee of a charity whose purpose is to carry out programs. These might be service providers from librarians to doctors to research assistants, but the term can also refer to a choral director or soccer coach.

program-related investment (PRI) A means of funding used by foundations that allows them to “invest” in a nonprofit endeavor in hopes of the funds being returned to the foundation at some point with interest.

proposal A document prepared to solicit a grant from any source. See Chapter 13 for the parts of a proposal.

proprietary A term that means “privately owned and controlled.” You should consider all materials a client supplies you about its programs and operations and all materials you create for that client proprietary, or belonging to, the client. Proprietary materials cannot be shared with anyone else without permission.

regrant A grant made by a charity with funds it has raised for that purpose. When seeking a grant to support regrants, be sure the funder allows this—many don’t, including many federal grants.

renewal grant A grant from the same funder to continue the same program. This can be a loaded phrase. On the one hand, it signifies a continuing relationship with your charity, which is a good thing to remind them about. On the other, it might imply to a funder that you expect them to continue supporting your charity and maybe even take their continued support for granted.

request for proposal (RFP) A proactive means funders employ to encourage proposals for a program established by the funder.

social responsibility A corporate euphemism for a corporate contributions program.

sponsorship A grant made usually by a corporation to a nonprofit or a for-profit in return for tangible benefits to the corporation, usually through marketing.

stewardship A term usually used to mean the practice of looking after a group of people or managing affairs, but in our parlance, it refers to looking after donors to ensure their continued interest (and donations).

tax-exempt status A designation by some level of government that an organization is a charity and is not subject to taxes imposed by that government body. See also 501(c)(3) status.

trustee An official at a foundation or at a nonprofit organization who holds the assets of the organization in trust for the public good; also sometimes known as a member of the board of directors. At a foundation, the trustees hold the authority to make grants and determine policy.

venture philanthropy A form of grantmaking that usually involves greater reporting requirements and greater involvement by the funder in the charity’s program.