501(c)(3)
Section of the Internal Revenue Code that designates an organization as charitable and tax-exempt. Organizations qualifying under this section include religious, educational, charitable, amateur athletic, scientific or literary groups, organizations testing for public safety or organizations involved in prevention of cruelty to children or animals.

509(a)
Section of the tax code that defines public charities (as opposed to private foundations). A 501(c)(3) organization must have a 509(a) designation to further define the agency as a public charity.

Advisory Board
A group of individuals who offer advice, inform or notify. An advisory board differs from an elected board in that they do not have any oversight responsibilities.

Altruism
Altruism, like passion, is the key intent that philanthropy expresses; a concern for the welfare of others; selflessness.

Annual Report
A voluntary report published by a foundation or corporation describing its grant activities.

Assets
Cash, stocks, bonds, real estate or other holdings of a foundation. Generally, assets are invested and the income is used to make grants.

Bequest
A bequest can be a legacy; a sum of money committed to an organization and donated upon the donor’s death.

Board of Directors
A body of advisors who hold oversight responsibility for the organization.

Challenge Grant
A grant that is made on the condition that other funding be secured, either on a matching basis or some other formula, usually within a specified period of time, with the objective of encouraging expanded fundraising from additional sources.

Charitable Giving Plan
A plan that best reflects one’s life experiences, values, goals and passions that structures giving to a charitable organization(s).

Charitable Lead Trust
A legal device used to set aside money or property of one person for the benefit of one or more persons or organizations. Specifically, this type of trust allows for a regular, fixed amount to go to a charity for a specific number of years. At the end of that time, the remainder of the trust passes to one’s heirs.

Charitable Remainder Trust
A legal device used to set aside money or property of one person for the benefit of one or more persons or organizations. Specifically, this type of trust allows one to take a deduction for a gift to the trust in the year in which the trust is formed. One receives income from this type of trust for life and after one’s death, the assets pass to the charity you designated.

Charity
In its traditional legal meaning, the word charity encompasses religion, education, promotion of health, relief of poverty or distress, assistance to the government, and other purposes that benefit the community. Nonprofits organizations that are organized and operated to further one of these purposes generally will be recognized as exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code and will be eligible to receive tax-deductible charitable gifts.

Community Foundation
A community foundation is a tax-exempt, nonprofit, autonomous, publicly supported, philanthropic institution composed primarily of permanent funds established by many separate donors for the long-term diverse, charitable benefit of the residents of a defined geographic area. Community foundations provide an array of services to donors who wish to establish endowed and non-endowed funds without incurring the administrative and legal costs of starting independent foundations.

Corporate Foundation
A corporate foundation is a private foundation that derives its grant making funds primarily from the contributions of a profit making business. The company sponsored foundation may maintain close ties with the donor company, but it is a separate legal organization, and is subject to the same rules and regulations as other private foundations.

Corporate Giving Program
A corporate giving program is a grant making program established and administered within a for profit company. Gifts or grants go directly to charitable organizations from the corporation as a planned part of the company’s annual budgeting process.

Designated Funds
A type of restricted fund in which the fund beneficiaries are specified by the grantors.

Discretionary Funds
Grant funds distributed at the discretion of one or more trustees, which usually do not require prior approval by the full board of directors. The governing board can delegate discretionary authority to staff.

Donee
The receiving organization of a donor’s resources.

Donor
A donor is anyone who gives resources – financial, social, intellectual and time – to a nonprofit organization, public charity or fund.

Donor Advised Fund
A fund held by a community foundation or other public charity, where the donor or a committee appointed by the donor, may recommend eligible charitable recipients for grants from the fund. The public charity’s governing body must be free to accept or reject the recommendations.

Donor Designated Fund
A fund held by a community foundation where the donor has specified that the fund’s income or assets be used for the benefit of one or more specific charities.

Employee Matching Gift
When an employee makes a donation to charity, the company matches that donation dollar-for-dollar.

Endowment
The principal amount of gifts and bequests that are accepted subject to a requirement that the principal be maintained intact and invested to create a source of income for the foundation. Donors may require that the principal remain intact in perpetuity, or for a defined period of time.

Federated Fund
A centralized campaign whereby one organization raises money for its member agencies. These annual workplace giving campaigns raise millions of dollar for distribution to local, state and national nonprofit organizations. The United Way is an example of a federated fund.

Field of Interest Fund
A fund held by a community foundation that is used for a specific charitable purpose such as education or health research.

Grant
An award of funds to an organization or individual to undertake charitable activities.

Grant Monitoring
The ongoing assessment of the progress of the activities funded by a donor, with the objective of determining if the terms and conditions of the grant are being met and if the goal of the grant is likely to be achieved.

Grantee
The individual or organization that receives a grant.

Grantor
The individual or organization that makes a grant.

In-Kind Contribution
A donation of goods and services rather than cash or appreciated property.

Legacy
The gift that an individual leaves, both in the details of their will and in the tradition of giving they shared with their descendants.

Leverage
A method of grant making practiced by some foundations and individual donors. 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.

Matching Grant
A grant or gift made with the specification that the amount donated must be matched on a one-for-one basis or according to some other prescribed formula.

Memorialize
To honor the memory of an individual or group by donating resources or establishing a fund that reflects the gifts, values or concerns of the individual or group.

Nonprofit Organization
A term describing the Internal Revenue Service’s designation of an organization whose income is not used for the benefit or private gain of stockholders, directors, or any other persons with an interest in the company. A nonprofit organization’s income must be used solely to support its operations and stated purpose.

Operating Foundation
Operating Foundations are private foundations that use the bulk of their income to provide charitable services or to run charitable programs of their own. They make few, if any, grants to outside organizations. The Carnegie Endowment for International Peace and the Getty Trust are examples of operating foundations.

Philanthropist
A person who loves humanity, is committed deeply to making society a better place, who believes that each individual, each dollar and each action makes a difference.

Philanthropy
The origin of the word comes from the Greek meaning “love for mankind”. Today, philanthropy most generally means the voluntary giving by an individual or group to promote the common good.

Pledge
A promise to make future contributions to an organization. For example, some donors make multi-year pledges promising to grant a specific amount of money each year.

Private Foundation
A nongovernmental, nonprofit organization with funds (usually from a single source, such as an individual, family or corporation) and program managed by its own trustees or directors, established to maintain or aid social, educational, religious or other charitable activities, primarily through grants.

Professional Advisor
Individuals who assist in planning and executing charitable giving through providing information on giving options according to one’s specific financial situation. Types of professional advisors include: attorney, accountant, estate planner, financial planner, stockbroker, insurance broker, planned giving officer and philanthropy consultant.

Restricted Fund
A fund whose assets are specifically designated by the donor as to the causes and types of organizations who may receive grants.

Seed Money
A grant or contribution used to start a new project or organization.

Supporting Organization
A supporting organization is a charity that is not required to meet the public support test because it supports a public charity. To be a supporting organization, a charity must meet one of three complex legal tests that assure, at a minimum, that the organization being supported has some influence over the actions of the supporting organization.

Tax-Exempt Organizations
Organizations that do not have to pay state and/or federal income taxes. Organizations other than churches seeking recognition of their status as exempt under Section 501(c)(3) of the Internal Revenue Code must apply to the IRS. Charities may also be exempt from state income, sales and local property tax.

Tithing
A belief, found in many faiths, of giving 10% back to the place of worship.

Trust
A legal device used to set aside money or property of one person for the benefit of one or more persons or organizations.

Trustee
The person(s) or institutions responsible for the administration of the trust.

Unrestricted Funds
Normally found at community foundations, an unrestricted fund is one that is not specifically designated to a particular use by the donor.

Venture Philanthropy
A philanthropy that borrows some of the best practices from the venture capital world to invest deeply in nonprofits to build their capacity effectively. Venture philanthropists value their donor dollars in terms of the social return on investment.

Volunteerism
Performing an act of kindness, freely giving of your talent, time and effort for the benefit of the community.