Nonprofit Glossary

A 501(c)(3) is a tax-exempt nonprofit organization recognized by the IRS. Donations to 501(c)(3) organizations are tax-deductible for donors.

An annual fund is a yearly fundraising campaign that covers a nonprofit's operating expenses. It provides the unrestricted revenue organizations need to keep programs running.

A nonprofit annual report is a comprehensive document summarizing the organization's activities, financials, and impact over the past year for donors and stakeholders.

A beneficiary is the person or group that directly benefits from a nonprofit's programs and services. Understanding beneficiaries is essential for measuring impact.

A bequest is a gift made to a nonprofit through a donor's will or living trust, providing charitable support from the donor's estate after death.

A nonprofit board of directors is the governing body responsible for organizational oversight, fiduciary duty, and strategic direction. Board members often play a key role in fundraising.

A campaign thermometer is a visual progress indicator showing how close a fundraising campaign is to reaching its goal, creating urgency and social proof.

Capacity building is the process of strengthening a nonprofit's ability to fulfill its mission effectively, including staff development, systems improvement, and organizational growth.

A capital campaign is a major, time-limited fundraising effort to raise a specific amount of money for a significant project like a building, endowment, or program expansion.

A case for support is a compelling document that explains why donors should give to your nonprofit. It articulates the need, your solution, and the impact of giving.

Cause marketing is a partnership between a nonprofit and a for-profit business where both benefit — the business gains goodwill, and the nonprofit gains exposure and funding.

A charitable contribution is a donation of money, property, or goods to a qualified nonprofit organization. Contributions to 501(c)(3) organizations are typically tax-deductible.

A charitable remainder trust (CRT) is a planned giving vehicle where a donor places assets in a trust, receives income during their lifetime, and the remainder goes to a nonprofit.

A charitable trust is a legal arrangement where assets are held and managed by a trustee for the benefit of a charitable organization, providing tax benefits to the donor.

A community foundation is a public charity that manages donor funds and makes grants to nonprofits within a specific geographic area. They pool resources to strengthen local communities.

Corporate giving encompasses the charitable donations, sponsorships, and grant programs that businesses direct toward nonprofit organizations.

Crowdfunding is a method of raising money from a large number of people, typically through an online platform. For nonprofits, it enables campaign-based fundraising with broad reach.

Cultivation is the process of building relationships with prospective donors before asking for a gift. It involves education, engagement, and trust-building over time.

A development director leads a nonprofit's fundraising strategy, manages the development team, and oversees donor relationships, campaigns, and revenue goals.

A development plan is a comprehensive fundraising strategy document that outlines revenue goals, strategies, timelines, and resources for a nonprofit's fundraising program.

Direct mail is a fundraising channel that uses physical letters, postcards, or packages sent to donors' homes to solicit charitable gifts.

A donation page is the web page where donors complete their charitable contribution, including payment information, gift amount, and any designations.

Donor acquisition is the process of attracting and converting new donors to your nonprofit. It is typically the most expensive stage of the donor lifecycle.

A donor-advised fund (DAF) is a charitable investment account where donors receive an immediate tax deduction and recommend grants to nonprofits over time.

Donor communication encompasses all the ways a nonprofit interacts with its donors — emails, letters, phone calls, social media, and events — to build and maintain relationships.

Donor fatigue occurs when supporters become overwhelmed or disengaged from excessive fundraising appeals, leading to decreased giving and increased attrition.

The donor lifecycle maps the stages of a donor's relationship with a nonprofit, from first awareness through acquisition, retention, upgrade, and legacy giving.

A donor management system (DMS) is software that helps nonprofits track donor information, gift history, communications, and relationships in a centralized database.

A donor pyramid is a visual model showing the progression of donor relationships from first-time small gifts at the base to major and planned gifts at the top.

Donor recognition is the practice of publicly or privately acknowledging donors for their charitable contributions, reinforcing their connection to your mission.

Donor retention is the percentage of donors who give again in a subsequent year. It is the most important metric for sustainable fundraising growth.

Donor stewardship is the ongoing process of thanking, updating, and engaging donors after they give — building the relationship that leads to future gifts.

Earned income is revenue a nonprofit generates through the sale of goods or services, as opposed to donations or grants. It provides diversified, sustainable funding.

An endowment is a pool of invested assets where the principal is preserved and the investment income funds nonprofit operations or programs in perpetuity.

Event fundraising uses organized gatherings — galas, auctions, walks, and virtual events — to raise money and engage donors through shared experiences.

A feasibility study is a confidential assessment conducted before a capital campaign to determine whether a nonprofit can realistically achieve its fundraising goal.

A fiscal sponsor is a 501(c)(3) organization that provides legal and tax-exempt status to a project or group that does not have its own nonprofit status.

Fundraising ROI measures the return on investment of fundraising activities — how much revenue is generated for every dollar spent on fundraising.

A gift acknowledgment is a formal written communication from a nonprofit to a donor confirming receipt of a charitable contribution. It is required by the IRS for gifts of $250 or more.

A gift-in-kind is a non-cash donation of goods, services, or property to a nonprofit. Common examples include donated auction items, office supplies, or professional services.

A gift range chart (also called a gift table) maps out the number and size of gifts needed at each level to reach a fundraising campaign goal.

A giving circle is a group of individuals who pool their charitable contributions and collectively decide which nonprofits or causes to fund.

A giving society is a named group of donors who give at or above a specific threshold. It provides recognition, community, and incentive for sustained giving.

Giving Tuesday is a global generosity movement held on the Tuesday after Thanksgiving, encouraging people to give to charitable causes through donations, volunteering, and acts of kindness.

Grant writing is the process of preparing and submitting proposals to foundations, corporations, and government agencies requesting funding for nonprofit programs and projects.

Grassroots fundraising raises money from a broad base of community supporters through small, individual donations rather than relying on large institutional gifts.

Impact investing directs capital toward enterprises and funds that generate measurable social or environmental benefits alongside financial returns.

An impact report is a document that communicates the measurable results of a nonprofit's work, showing donors and stakeholders how their support made a difference.

An in-kind donation is a non-cash gift of goods, services, or time contributed to a nonprofit organization instead of a monetary donation.

Institutional giving refers to grants and donations from foundations, corporations, and government agencies, as opposed to gifts from individual donors.

A lapsed donor is someone who previously gave to your nonprofit but has not donated within a defined period, typically 12-24 months.

Legacy giving (also called planned giving) involves charitable gifts that donors arrange during their lifetime but that are typically fulfilled through their estate after death.

A major donor program is a structured approach to identifying, cultivating, soliciting, and stewarding donors who give at your organization's highest levels.

A major gift is a significant charitable donation — the threshold varies by organization but typically represents the top 10-20% of gifts by dollar amount.

A matching gift is a corporate program where an employer matches an employee's charitable donation, effectively doubling (or more) the gift to the nonprofit.

Monthly giving is a recurring donation model where donors authorize automatic monthly contributions, providing nonprofits with predictable, sustained revenue.

Nonprofit accounting is a specialized form of financial management that tracks revenue and expenses by fund, distinguishes restricted from unrestricted resources, and follows GAAP for nonprofits.

Nonprofit governance is the system of policies, practices, and structures through which a board of directors oversees an organization's mission, strategy, and financial health.

Online giving is the process of making charitable donations through digital channels — websites, mobile apps, social media, and email — rather than cash, checks, or phone.

An operating budget is a nonprofit's annual financial plan that outlines expected revenue and expenses for running the organization's programs and operations.

An operating reserve is a designated pool of unrestricted funds that a nonprofit maintains to cover unexpected expenses or revenue shortfalls, typically 3-6 months of operating costs.

Peer-to-peer fundraising empowers supporters to create personal fundraising pages and solicit donations from their own networks on behalf of your nonprofit.

Philanthropy is the desire to promote the welfare of others, expressed through charitable donations of money, time, or resources to causes that benefit society.

Planned giving encompasses charitable gift arrangements made as part of a donor's financial or estate plan, including bequests, trusts, and beneficiary designations.

A pledge is a donor's commitment to give a specific amount over a defined period, allowing donors to make larger gifts through installment payments.

Prospect research is the process of identifying and evaluating potential donors by analyzing their financial capacity, philanthropic history, and connection to your mission.

A public charity is a 501(c)(3) nonprofit that receives a substantial portion of its support from the general public or government, as opposed to a private foundation.

A recurring donation is an automatic, scheduled gift that repeats at a set interval — typically monthly — providing nonprofits with predictable, sustained revenue.

A restricted fund holds donations that donors have designated for a specific purpose, program, or project. The nonprofit must use these funds according to the donor's intent.

A social enterprise is a business that prioritizes social, environmental, or community impact alongside financial sustainability, often operated by or connected to a nonprofit.

A solicitation is a direct request for a charitable donation, delivered through any channel — in person, by mail, email, phone, or online.

A sponsorship is a business arrangement where a company provides funding or resources to a nonprofit in exchange for visibility, brand association, or other marketing benefits.

A stewardship plan is a structured schedule of communications, recognition activities, and touchpoints designed to thank and engage donors after they give.

A sustainer program is a structured monthly giving initiative that creates a named community of recurring donors, providing predictable revenue and deeper engagement.

A tax deduction for charitable giving reduces a donor's taxable income by the amount donated to a qualified 501(c)(3) organization, subject to IRS limits.

A tax receipt is a written document from a nonprofit to a donor confirming a charitable contribution, providing the information needed for the donor to claim a tax deduction.

An unrestricted fund holds donations that can be used for any organizational purpose, giving nonprofit leadership full flexibility to allocate resources where most needed.

Volunteer management is the process of recruiting, training, coordinating, and retaining volunteers who contribute their time and skills to a nonprofit's mission.

Wealth screening is the process of analyzing donor databases against external data sources to estimate donors' financial capacity to give.

Year-end giving refers to the surge in charitable donations that occurs in November and December, when donors make tax-motivated gifts and respond to holiday appeals.