Nonprofit glossary

501(c)(3) Legal & Formation

The section of the federal tax code that exempts charitable, religious, educational, and scientific organizations from federal income tax and allows donors to deduct their gifts. Organizations recognized under this section are the most common type of nonprofit, and gifts to them are generally tax-deductible for individual donors (a feature shared by only a limited set of other organizations, such as certain veterans' groups and government units).

Also: 501c3, c3

501(c)(4) Legal & Formation

A tax-exempt social welfare organization that, unlike a 501(c)(3), may engage in unlimited lobbying and some political campaign activity to advance its cause, as long as politics is not its primary activity. The key trade-off is that donations to a 501(c)(4) are generally NOT tax-deductible for the donor, whereas gifts to a 501(c)(3) are.

Also: 501c4, c4, social welfare organization

509(a)(1)/(2)/(3) Legal & Formation

The subsections of the tax code that classify a 501(c)(3) as a public charity rather than a private foundation. 509(a)(1) covers organizations supported mainly by donations and government grants, 509(a)(2) covers those supported mainly by earned income from their exempt activities, and 509(a)(3) covers supporting organizations tied to other public charities.

Also: 509a1, 509a2, 509a3, public support test classification

Accessibility Marketing & Tech

Designing websites, documents, events, and services so that people with disabilities, including those with visual, hearing, motor, or cognitive impairments, can use them fully. In practice this means things like alt text on images, captions on video, keyboard navigation, readable color contrast, and wheelchair-accessible venues.

Also: a11y, digital accessibility, ADA accessibility

Accrual vs cash basis Finance

Under cash-basis accounting, revenue and expenses are recorded only when money actually changes hands; under accrual-basis accounting, they are recorded when earned or incurred, regardless of when cash moves. Accrual is required by GAAP and gives a more accurate picture of financial health, while cash basis is simpler and common for very small organizations.

Also: cash basis, accrual basis, modified cash basis

Annual Fund Fundraising

The ongoing, year-round campaign that raises unrestricted operating dollars an organization can spend on whatever it needs, typically through repeated appeals to a broad base of supporters. It is the foundation of most fundraising programs and is renewed every fiscal year.

Also: annual giving, annual appeal

Articles of Incorporation Legal & Formation

The founding legal document filed with a state agency (usually the Secretary of State) that officially creates a corporation and states its name, purpose, and registered agent. For nonprofits seeking exemption, the IRS requires specific language about charitable purpose and what happens to assets if the organization closes.

Also: Certificate of Incorporation, charter, AOI

Attribution vs. contribution Programs & Impact

Attribution claims that a specific result was caused by your organization's work alone, while contribution acknowledges that your work was one of several factors that helped produce the result. Because most social change has many causes, honest nonprofits usually claim contribution rather than sole attribution.

Also: attribution and contribution

Audit vs review vs compilation Finance

These are three levels of CPA financial engagements with decreasing scope and assurance: an audit provides the highest assurance through detailed testing and a formal opinion; a review provides limited assurance based mainly on inquiry and analysis; and a compilation simply presents management's figures in proper format with no assurance. Some states, grants, or lenders require a specific level based on the organization's size or funding.

Also: financial audit, financial review, compilation engagement

Automatic Revocation Governance & Compliance

The automatic loss of federal tax-exempt status that happens when an organization fails to file a required annual return or notice (the 990 series) for three consecutive years. Once revoked, the group must apply to the IRS to be reinstated.

Also: auto-revocation, revocation of exempt status

Beneficiary / participant Programs & Impact

The people a nonprofit's programs are meant to serve or benefit. Many organizations now prefer terms like 'participant,' 'client,' or 'community member' over 'beneficiary,' because they convey active involvement and dignity rather than passive charity.

Also: beneficiaries, participants, service recipients, clients

Bequest Fundraising

A gift to a charity directed through a person's will or living trust, paid out from their estate after they pass away. It is the most common form of planned giving and costs the donor nothing during their lifetime.

Also: charitable bequest

Board Independence Governance & Compliance

The degree to which board members are free of financial ties or family relationships with the organization or its insiders that could compromise objective oversight. Form 990 asks the organization to count how many of its voting board members are independent.

Also: independent board members, independent directors

Bylaws Governance & Compliance

The internal rulebook that governs how an organization operates, covering things like the size and election of the board, officer roles, meetings, voting, and how the rules can be amended. Unlike the Articles of Incorporation, bylaws are usually not filed with the state but are required by the IRS and reviewed by funders.

Capacity-building grant Grants

Funding meant to strengthen a nonprofit's internal ability to operate and grow, paying for things like staff training, technology, strategic planning, or fundraising systems rather than direct program services. The goal is to make the organization more effective and sustainable over the long term.

Also: Capacity building, Organizational development grant

Capital Campaign Fundraising

A time-limited, intensive fundraising effort to raise a large sum for a specific, often one-time purpose such as constructing a building, buying equipment, or building an endowment. Donors typically commit gifts paid out over several years.

Case for support Fundraising

A clear, persuasive document or statement that explains why an organization exists, what problem it solves, and why a donor or funder should give to it now. It is the core argument fundraisers build appeals, grant proposals, and campaigns around.

Also: case statement, case for giving

Charitable Solicitation Registration Legal & Formation

A requirement in most U.S. states that a nonprofit register with the state (usually the attorney general or secretary of state) before asking residents for donations. Rules and thresholds vary by state, and many require annual renewal.

Also: charitable registration, fundraising registration, state solicitation registration

Conflict of Interest Policy Governance & Compliance

A written policy requiring board members and key staff to disclose personal or financial interests that could clash with the organization's best interests, and to step back from related decisions. The IRS asks on Form 990 whether the organization has adopted one.

Also: COI policy

CRM (Constituent/Customer Relationship Management) Marketing & Tech

Software that stores and organizes information about the people an organization interacts with, such as donors, volunteers, and program participants, including their contact details, giving history, and communication record. Nonprofits use it to track relationships, segment outreach, and avoid losing data in scattered spreadsheets.

Also: CRM, donor database, constituent relationship management, donor management system

De minimis indirect cost rate Grants

A simplified, default indirect cost rate that an organization may charge to federal awards without negotiating a formal rate agreement, applied to its Modified Total Direct Cost base. Under the federal Uniform Guidance this rate is up to 15% of MTDC (raised from the former 10% as of the October 2024 revisions).

Also: de minimis rate, 15% de minimis

Determination letter Legal & Formation

The official written notice from the IRS confirming that an organization qualifies for tax-exempt status and stating its classification (such as public charity or private foundation). Nonprofits keep this letter on file and share it with donors, grantmakers, and banks as proof of their exempt status.

Also: exemption letter, IRS determination letter

Dissolution clause Legal & Formation

A required provision in a nonprofit's Articles of Incorporation stating that if the organization closes, its remaining assets must be distributed to another tax-exempt charitable organization or to the government, never to individuals. The IRS requires this language as a condition of granting 501(c)(3) status.

Document Retention Policy Governance & Compliance

A written policy setting how long an organization keeps different records and when it may securely destroy them, which also helps prevent destroying documents relevant to a legal matter. The IRS asks on Form 990 whether the organization has adopted one.

Also: document retention and destruction policy, records retention policy

Donation Receipt / Written Acknowledgment Fundraising

The written confirmation a charity provides to a donor documenting a gift, which the donor needs to claim a tax deduction. The IRS requires a donor to obtain a contemporaneous written acknowledgment for any single contribution of $250 or more; it must state the amount of cash and a description of any non-cash property, and either confirm no goods or services were provided or describe and estimate the value of any that were.

Also: $250 rule, gift acknowledgment, tax receipt

Donor Lifetime Value (LTV) Fundraising

The total net revenue an organization can expect to receive from a supporter over the full span of their relationship, not just from a single gift. It helps fundraisers decide how much it is worth investing to acquire and keep a donor.

Also: LTV, lifetime value, donor LTV

Donor Retention Rate Fundraising

The percentage of donors who gave in one period (such as last year) who give again in the next period. It is a core health metric for a fundraising program because keeping an existing donor is far cheaper than acquiring a new one; the nonprofit-sector average hovers around 40-45%.

Also: retention rate

Donor-Advised Fund (DAF) Fundraising

A charitable investment account a donor opens at a sponsoring organization (such as a community foundation or a financial firm's charitable arm); the donor takes the tax deduction when they contribute, then recommends grants out to charities over time. Because the sponsor has exclusive legal control over the funds, a nonprofit receiving a DAF grant cannot issue a tax receipt to the individual advisor (the advisor already deducted the gift when funding the DAF, and a grant recommendation is not separately deductible).

Also: DAF

EIN Legal & Formation

The Employer Identification Number is a nine-digit federal tax ID the IRS assigns to an organization, functioning like a Social Security number for the entity. It is needed to open a bank account, hire staff, and apply for tax-exempt status, and can be obtained for free directly from the IRS.

Also: Employer Identification Number, Federal Tax ID, FEIN

Email open rate and click-through rate Marketing & Tech

Two metrics that measure email performance: the open rate is the percentage of delivered emails that recipients opened, and the click-through rate (CTR) is the percentage who clicked a link inside the message. Click rate is generally a more reliable signal of engagement than open rate, since modern privacy features can inflate or hide opens.

Also: open rate, click rate, CTR, click-through rate, email engagement metrics

Endowment Fundraising

A pool of donated funds invested for the long term, where the principal is generally preserved and only a portion of the investment earnings is spent each year to support the organization in perpetuity. Donor-established endowment gifts are usually classified as net assets with donor restrictions (specifically, restricted in perpetuity); a board can also designate its own unrestricted funds as a 'quasi-endowment.'

Excess Benefit Transaction Governance & Compliance

A deal in which a nonprofit gives a disqualified person, such as an executive or board member, more value than it receives in return, for example overpaying for services or property. It triggers IRS penalties under the intermediate sanctions rules.

Also: excess benefit

Exempt purpose Legal & Formation

The specific charitable, religious, educational, scientific, or similar mission that qualifies an organization for tax exemption under the tax code. The organization must be organized and operated primarily to advance this purpose, and activities outside it can jeopardize its exempt status.

Federal grant Grants

Funding awarded by an agency of the U.S. federal government to support work that serves a public purpose, governed by strict rules under the federal Uniform Guidance (2 CFR Part 200). These grants require registration in SAM.gov, generally come with detailed reporting and compliance obligations, and may trigger a Single Audit when a nonprofit expends $1,000,000 or more in federal awards in a single fiscal year (the threshold raised from $750,000, effective for fiscal years beginning on or after October 1, 2024).

Also: Federal funding, Federal award

Fiduciary Duty Governance & Compliance

The legal obligation board members owe to act in the nonprofit's best interest. It is usually broken into three parts: the duty of care (act with reasonable diligence and attention), the duty of loyalty (put the organization ahead of personal interests), and the duty of obedience (stay true to the mission and follow the law).

Also: duty of care, duty of loyalty, duty of obedience

Fiscal sponsorship Legal & Formation

An arrangement in which an established 501(c)(3) accepts and manages tax-deductible donations and grants on behalf of a project or group that does not yet have its own tax-exempt status. It lets new initiatives operate and fundraise legally, usually in exchange for an administrative fee, without forming a separate nonprofit first.

Also: fiscal sponsor

Fiscal year Finance

The 12-month period an organization uses for budgeting, accounting, and financial reporting, which need not match the January-to-December calendar year. Many nonprofits use a July 1 to June 30 fiscal year, and the choice sets the deadline for the annual IRS Form 990, which is due the 15th day of the 5th month after the fiscal year ends.

Also: FY, financial year

Form 1023 Legal & Formation

The long-form IRS application a nonprofit files to be recognized as a 501(c)(3) tax-exempt organization. It requires detailed narratives, financial projections, and governing documents, and is used by larger or more complex organizations that do not qualify for the streamlined version.

Also: Application for Recognition of Exemption, 1023

Form 1023-EZ Legal & Formation

A shorter, lower-cost online version of the 501(c)(3) exemption application available to smaller organizations that expect annual gross receipts of $50,000 or less and total assets of $250,000 or less. Applicants must first complete an eligibility worksheet, and certain entities like churches and private foundations cannot use it.

Also: 1023-EZ, Streamlined Application for Recognition of Exemption

Form 8283 Fundraising

The IRS form a donor (not the charity) files with their tax return to report non-cash charitable contributions when the total claimed deduction for such items exceeds $500. For an item or group of similar items valued over $5,000, the donor must also obtain a qualified appraisal, and the charity signs the form to acknowledge receipt.

Also: 8283, Noncash Charitable Contributions form

Form 990 Governance & Compliance

The annual information return that most tax-exempt organizations file with the IRS to report finances, governance, and programs. The full Form 990 is required for larger organizations, generally those with gross receipts of $200,000 or more or total assets of $500,000 or more.

Also: 990, Return of Organization Exempt From Income Tax

Form 990-EZ Governance & Compliance

A shorter version of the annual IRS information return for mid-sized tax-exempt organizations. It can generally be filed by groups with gross receipts under $200,000 and total assets under $500,000.

Also: 990-EZ, Short Form Return

Form 990-N (e-Postcard) Governance & Compliance

The simplest annual IRS filing, an electronic postcard for small tax-exempt organizations whose gross receipts are normally $50,000 or less. It asks only for basic identifying information rather than detailed financials.

Also: 990-N, e-Postcard, Electronic Notice

Form 990-PF Governance & Compliance

The annual IRS return that all private foundations must file regardless of size. It reports the foundation's investments, grants made, and compliance with rules unique to private foundations such as the requirement to pay out roughly 5% of net investment assets for charitable purposes each year.

Also: 990-PF, Return of Private Foundation

Form 990-T Finance

The IRS return a tax-exempt organization uses to report and pay tax on income from unrelated business activities. It is filed in addition to the regular 990 series return when the organization has $1,000 or more of gross unrelated business income.

Also: 990-T, Exempt Organization Business Income Tax Return

Functional expenses Finance

A way of classifying spending by its purpose rather than its type, grouping costs into program services and supporting activities (management/general and fundraising). Nonprofits report this breakdown, often in a grid that cross-references purpose against natural categories like salaries or rent, in a statement of functional expenses.

Also: statement of functional expenses, SOFE

Fund accounting Finance

An accounting method used by nonprofits that tracks money in separate "funds" based on the purpose or restrictions attached to it, rather than focusing on profit. It lets an organization show that money intended for one purpose was actually spent on that purpose.

Also: fund-based accounting

GAAP Finance

The standardized set of U.S. accounting rules and conventions that organizations follow so their financial statements are consistent, comparable, and reliable. Funders and auditors generally expect nonprofit financials to be prepared in accordance with these standards.

Also: Generally Accepted Accounting Principles

General operating support Grants

Flexible grant money that a nonprofit can use for any of its core costs, including rent, salaries, utilities, and day-to-day operations, rather than for one specific project. It is highly valued because it gives organizations the freedom to spend where the need is greatest. When a funder places no purpose restriction on it, it supports net assets without donor restrictions.

Also: GOS, Operating support, Unrestricted funding, Core support

Gift Acceptance Policy Governance & Compliance

A board-approved written policy that spells out what types of gifts an organization will and will not accept, and under what conditions. It protects the nonprofit from costly or risky donations such as real estate with environmental liabilities, restricted gifts it cannot fulfill, or assets that are hard to value or sell.

Gift Range Chart Fundraising

A planning tool, used mainly in capital and major campaigns, that lays out how many gifts at each dollar level are needed to reach the campaign goal, typically showing that a small number of large gifts must come from the top. It guides the team on how many prospects to identify and solicit at each tier.

Also: gift table, gift pyramid

GivingTuesday Fundraising

A global day of generosity held each year on the Tuesday after Thanksgiving in the United States, kicking off the year-end giving season. Nonprofits commonly run focused fundraising and awareness campaigns around it to capture donations while charitable giving is top of mind.

Also: Giving Tuesday, #GivingTuesday

Google Ad Grant Marketing & Tech

A program from Google that gives eligible 501(c)(3) nonprofits up to $10,000 per month in free Google Search text ads, letting them appear at the top of search results without paying. The money is in-kind advertising credit, not cash, and comes with rules such as maintaining a 5% click-through rate and tracking meaningful conversions.

Also: Google Ad Grants, Google for Nonprofits Ad Grant, Ad Grants

Grant Grants

An award of money given by a funder (such as a foundation, corporation, or government agency) to support a specific project or the general work of a nonprofit, which usually does not have to be repaid. In exchange, the recipient typically agrees to use the funds as described and to report on how the money was spent and what it accomplished.

Grant report Grants

A document a nonprofit submits to a funder after receiving a grant, describing what was accomplished, how the money was spent, and what results or challenges occurred. Submitting accurate, on-time reports is usually required to stay eligible for future funding from that funder. Reports may be interim (during the grant period) or final (at the end).

Also: Grantee report, Progress report, Final report, Interim report

Grants.gov Grants

The central U.S. government website where federal grant opportunities are posted and where nonprofits find and submit applications for federal funding. Organizations must register on the site before they can apply, and an active SAM.gov registration (including a Unique Entity Identifier) is required first.

Also: Grants dot gov

Impact Programs & Impact

The lasting, broader change in a community or social problem that can be attributed to an organization's work, beyond its immediate outcomes. It is the deepest level of result, often measured over years, and is harder to prove because many factors outside the organization also shape it.

Also: social impact

In-kind contribution Finance

A donation of goods, services, or use of property instead of cash, such as donated supplies, free professional services, or rent-free space. These gifts are recorded at their fair market value, and donated services are recognized only when they create or enhance a nonfinancial asset or require specialized skills that would otherwise have to be purchased.

Also: in-kind donation, gift-in-kind, GIK, non-cash contribution

Incorporator Legal & Formation

The person (or persons) who signs and files the Articles of Incorporation to legally bring the organization into existence. The role is typically a one-time formation step and does not require the incorporator to remain involved in governance afterward.

Indirect costs Finance

Expenses that support the organization as a whole and cannot be tied easily to a single program or grant, such as accounting, executive leadership, rent, utilities, and IT. They are recovered on grants either through a negotiated rate or the de minimis rate, and are often loosely called overhead.

Also: overhead, facilities and administrative costs, F&A costs

Intermediate Sanctions Governance & Compliance

IRS excise taxes (penalty taxes) imposed under Section 4958 on insiders who receive an excess benefit from a public charity or social welfare organization (a 501(c)(4)), and sometimes on the managers who approved it, rather than revoking the whole organization's exemption. They give the IRS a middle-ground enforcement tool short of taking away tax-exempt status.

Also: Section 4958 sanctions

Letter of Inquiry (LOI) Grants

A short letter (usually one to three pages) that a nonprofit sends to a potential funder to briefly describe a project and ask whether the funder is interested before a full application is invited. Funders use it to screen ideas, so a favorable response is often an invitation to submit a complete proposal. Note that a 'Letter of Intent' sometimes means the same thing, but in some grant and contract settings it instead signals a commitment to apply or to partner, so confirm which the funder means.

Also: LOI, Inquiry Letter, Concept paper

Logic model Grants

A one-page visual chart that maps how a program works by linking its resources (inputs) and activities to its intended results (outputs, outcomes, and long-term impact). Funders use it to see at a glance whether a plan is realistic and how success will be measured. It is related to, but distinct from, a logical framework (logframe), which presents similar information as a matrix often used in international development.

Also: Program logic model

Major Gift Fundraising

A donation large enough to receive personalized cultivation and individual attention, rather than being solicited through a mass appeal. There is no universal dollar figure; each organization sets its own threshold based on its budget and donor base (often anywhere from $1,000 to $25,000 or more).

Also: major donor

Matching Gift (Employer) Fundraising

A program in which a company matches the charitable donations its employees make, often dollar-for-dollar, effectively doubling the gift to the nonprofit. The employee submits a request to their employer, who then sends its own contribution to the same charity.

Also: employer matching, matching gifts

Matching grant Grants

A grant in which the funder agrees to give money only if the nonprofit raises a set amount from other sources, often dollar for dollar. It is designed to encourage additional fundraising and broaden the base of support for a project. A challenge grant is a similar arrangement, often tied to a fundraising goal or milestone.

Also: Match, Challenge grant

Modified Total Direct Cost (MTDC) Finance

A federal-grants cost base used to calculate indirect costs, consisting of direct salaries, wages, fringe benefits, materials, supplies, services, travel, and the first $50,000 of each subaward. It excludes items like equipment, capital expenditures, rent, tuition, scholarships, and the portion of any subaward over $50,000. (The subaward threshold was raised from $25,000 to $50,000 in the October 2024 Uniform Guidance revisions; older awards may still use $25,000.)

Also: MTDC

Monitoring and Evaluation (M&E) Programs & Impact

The practice of regularly tracking a program's activities and results (monitoring) and periodically judging how well it is working and why (evaluation). Together they help an organization learn, improve, and demonstrate results to funders and stakeholders.

Also: M&E, MEL, monitoring, evaluation and learning

Moves Management Fundraising

A structured process for advancing a relationship with a prospective major donor through a planned series of intentional touchpoints, or 'moves,' that build engagement until the person is ready to be asked for a significant gift. Each move is a deliberate step such as a meeting, tour, or personal note designed to deepen the donor's connection.

Net assets with donor restrictions Finance

Resources that a donor has limited to a specific purpose, program, or time period, so the organization may only use them as the donor directed. Restrictions can be temporary (released once the purpose is met or the time passes) or permanent (such as an endowment whose principal must be kept intact).

Also: restricted net assets, temporarily restricted net assets, permanently restricted net assets

Net assets without donor restrictions Finance

The portion of a nonprofit's resources that the board can use for any purpose that advances the mission, because no donor placed limits on how or when it may be spent. This is what most people loosely call "general" or "unrestricted" money.

Also: unrestricted net assets

NICRA Grants

A formal agreement between an organization and its federal cognizant agency that sets the specific indirect cost rate(s) the organization may charge to federal awards. Holding one is an alternative to using the simpler de minimis rate.

Also: Negotiated Indirect Cost Rate Agreement

Nonprofit corporation Legal & Formation

A legal entity formed under a state's nonprofit corporation statute to pursue a mission rather than to distribute profits to owners. It is the standard legal structure that an organization creates before applying to the IRS for federal tax exemption.

Also: not-for-profit corporation

Notice of Funding Opportunity (NOFO) Grants

The official government document announcing that federal grant money is available, including who can apply, how much funding exists, the program's purpose, evaluation criteria, and the application deadline. It is the government's version of a Request for Proposals and is typically posted on Grants.gov. Older awards may still call it a Funding Opportunity Announcement (FOA).

Also: NOFO, Funding Opportunity Announcement, FOA

Operating reserve Finance

Unrestricted funds a nonprofit sets aside to cover expenses during revenue gaps, emergencies, or unexpected shortfalls, providing financial cushion and stability. A commonly recommended target is enough to cover three to six months of operating expenses.

Also: reserve fund, rainy day fund

Outputs vs. outcomes Programs & Impact

Outputs are the direct, countable products of an activity (such as 200 meals served or 50 people trained), while outcomes are the changes in people's lives or conditions that result (such as improved nutrition or new job placements). Funders increasingly want to see outcomes, because counting activity alone does not prove the work made a difference.

Also: outputs and outcomes

Pass-through funds Grants

Money that one organization receives from an original funder and then distributes to other groups, rather than spending it directly itself. A common example is a state agency that receives federal grant money and passes it on to local nonprofits, which become subrecipients responsible for following the same rules. In federal grants, the organization that distributes the funds is called a pass-through entity.

Also: Pass-through funding, Pass-through entity, Flow-through funds

Planned Giving Fundraising

A category of larger gifts that a donor arranges as part of their overall financial or estate plans, often taking effect at or near death or structured to provide tax or income benefits. Common vehicles include charitable bequests, charitable gift annuities, and charitable remainder trusts.

Also: legacy giving, gift planning

Pledge Fundraising

A donor's formal promise to give a specified amount, often paid in installments over a set period rather than all at once. Pledges let organizations plan future revenue, and under accounting rules a documented unconditional pledge is generally recorded as revenue when promised, before the cash arrives.

Also: pledge commitment

Private Benefit Governance & Compliance

An improper advantage that a nonprofit's activities provide to private individuals or entities beyond what is incidental to accomplishing its exempt purpose. Unlike inurement, it can apply even to outsiders, not just insiders, and more than an insubstantial amount can threaten exemption.

Private foundation Legal & Formation

A type of 501(c)(3) organization, often funded by one family, individual, or company, that typically makes grants rather than running its own programs. Private foundations face stricter IRS rules, including excise taxes and a requirement to pay out roughly 5% of their net investment assets each year.

Private Inurement Governance & Compliance

A prohibited situation in which a nonprofit's income or assets flow to an insider, such as a director, officer, or other person with influence over the organization, for their private gain. Any amount of inurement can jeopardize tax-exempt status.

Also: inurement

Program / management & general / fundraising expenses Finance

The three functional spending categories nonprofits use: program expenses pay for mission activities and services; management and general (administrative) expenses cover overall operations and governance; and fundraising expenses cover the cost of soliciting donations and grants. Watchdogs and donors often look at the share spent on programs versus overhead.

Also: program expenses, M&G, administrative expenses, overhead, supporting services

Program officer Grants

A staff member at a foundation or government agency who manages grants in a particular subject area, reviews applications, advises applicants, and serves as the main point of contact for grantees. Building a good relationship with this person can improve a nonprofit's chances and ease ongoing communication.

Also: PO, Grant officer, Foundation officer

Prospect research Fundraising

The process of gathering and analyzing information about potential funders or donors, such as their giving history, funding priorities, and capacity to give, to find the best matches for an organization. It helps a nonprofit focus its time on funders most likely to say yes.

Also: Prospecting, Donor research, Funder research

Public charity Legal & Formation

A type of 501(c)(3) organization that receives broad financial support from the general public, government, or many donors, rather than from a single source. Public charities enjoy higher donor deduction limits and fewer operating restrictions than private foundations, and most operating nonprofits aim for this status.

Public Support Test Governance & Compliance

An IRS calculation that a public charity must pass to show it receives a broad base of support from the general public, government, or many donors rather than just a few sources. Generally an organization must show that at least one-third of its support is public, with a 10% facts-and-circumstances alternative available in some cases.

Also: public support percentage, one-third support test

Quid Pro Quo Contribution Fundraising

A payment a donor makes partly as a gift and partly in exchange for goods or services received in return, such as a gala ticket or auction item; only the amount exceeding the fair market value of what the donor received is tax-deductible. For any such payment over $75, the IRS requires the charity to give the donor a written statement disclosing the deductible amount and a good-faith estimate of the value received.

Also: $75 rule, quid pro quo

Quorum Governance & Compliance

The minimum number of board members who must be present at a meeting for the board to conduct official business and take valid votes. The required number is set in the organization's bylaws.

Recurring / Monthly Giving Fundraising

A program in which donors set up automatic, repeating donations (most commonly charged to a card or bank account each month) rather than giving one-time. Recurring donors typically retain at much higher rates and have a higher lifetime value than one-time givers, providing predictable income.

Also: monthly giving, sustainer program, recurring donors

Registered agent Legal & Formation

A person or company designated to receive official legal documents and government notices on behalf of an organization at a physical address within the state of incorporation. Every incorporated nonprofit must name and maintain one to stay in good standing with the state.

Also: agent for service of process, statutory agent, resident agent

Request for Proposals (RFP) Grants

A public announcement from a funder inviting nonprofits to apply for funding, spelling out the goals, eligibility rules, deadlines, and what each application must include. It signals exactly what the funder wants to pay for and how to compete for the money.

Also: RFP, Request for Applications, RFA, Call for Proposals

Restricted grant Grants

A grant that can only be spent on a specific purpose, project, or time period set by the funder, rather than on general expenses. The nonprofit must track these funds separately and use them exactly as agreed, or it may have to return the money. In audited financial statements these amounts are reported as net assets with donor restrictions.

Also: Restricted funding, Project grant, Program grant

Restricted vs unrestricted funds Finance

Restricted funds carry donor-imposed limits on their use (a specific program, project, or time frame), while unrestricted funds can be spent on any legitimate organizational need at the board's discretion. Spending restricted money outside its intended purpose is a serious compliance problem and can require returning the gift.

SAM.gov Grants

The official U.S. government System for Award Management website where organizations must register, for free, to be eligible to receive federal grants or contracts. Registration assigns a Unique Entity Identifier and must be renewed each year (registrations expire after 365 days) to stay active.

Also: System for Award Management, SAM, SAM dot gov

Single Audit Grants

A comprehensive audit of an organization's finances and its compliance with federal program requirements, required when it spends a large amount of federal award money in a fiscal year. The current threshold that triggers a Single Audit is $1,000,000 in federal awards expended in the year (raised from $750,000 under the October 2024 Uniform Guidance revisions).

Also: A-133 audit, Uniform Guidance audit, OMB Single Audit

Soft Credit Fundraising

An internal accounting notation that gives a person or entity recognition credit for a gift they influenced or facilitated but did not legally make from their own funds, while the official 'hard credit' and tax receipt go to the legal donor. Common examples include crediting an individual advisor for a grant from their donor-advised fund, or crediting a spouse alongside the named donor.

Also: soft credits

SROI (Social Return on Investment) Programs & Impact

A method for putting a monetary value on the social, environmental, and economic benefits a program creates, then comparing that value to the cost of producing it. A result is often stated as a ratio, such as $4 of social value for every $1 invested, though the figures rely on assumptions and proxies and should be read as estimates.

Also: SROI, social return on investment

Statement of activities Finance

A core nonprofit financial report showing all revenue, gains, expenses, and losses over a period, and how those changed the organization's net assets. It is the nonprofit equivalent of a for-profit income statement or profit-and-loss report.

Also: SOA, income statement, P&L, statement of revenues and expenses

Statement of financial position Finance

A snapshot at a single date of what a nonprofit owns (assets), what it owes (liabilities), and the difference between them (net assets). It is the nonprofit equivalent of a for-profit balance sheet.

Also: SOFP, balance sheet

Stewardship Fundraising

The ongoing practice of thanking donors, reporting on how their gifts were used, and demonstrating impact to build trust and loyalty after a gift is made. Good stewardship is a primary driver of donor retention and future giving.

Supporting organization Legal & Formation

A public charity, classified under section 509(a)(3), that exists to benefit, support, or carry out the purposes of one or more other public charities rather than operating independently. It qualifies as a public charity through its relationship with the organizations it supports instead of by passing a public support test.

Sustainability (in a proposal) Grants

The section of a grant application that explains how the program will keep going after the grant money runs out, such as through other funders, earned revenue, or community support. Funders look for it to be confident they are not the only source keeping the project alive.

Also: Sustainability plan, Continuation plan

Tax-exempt status Legal & Formation

Official recognition by the IRS (and usually the state) that an organization does not have to pay federal income tax on revenue related to its mission. This status is granted only after the organization applies and is approved, and it must be maintained through ongoing compliance such as annual filings.

Also: tax exemption, exempt status

TechSoup Marketing & Tech

A nonprofit organization that helps other nonprofits, charities, and libraries get donated or deeply discounted software, hardware, and technology services from companies like Microsoft, Google, and Adobe. Organizations verify their eligibility through TechSoup to access these reduced-cost tech products.

Also: Tech Soup

Theory of change Grants

A clear explanation of how and why a nonprofit believes its work will lead to the change it wants to see, laying out the steps and assumptions that connect activities to long-term impact. It is broader and more narrative than a logic model, focusing on the reasoning behind the strategy.

Also: ToC

UCOA Finance

A standardized, nonprofit-specific template of account categories and numbers that organizations can adopt for their bookkeeping. Using it helps map financial data cleanly onto IRS Form 990 and improves comparability across organizations.

Also: Unified Chart of Accounts, Unified Chart of Accounts for Nonprofits

UEI Grants

The Unique Entity Identifier, a free 12-character alphanumeric code assigned to an organization through SAM.gov that the federal government uses to track entities that receive grants or contracts. It replaced the older DUNS number on April 4, 2022, as the official identifier for federal funding. The identifier itself does not expire, although the organization's SAM.gov registration must be renewed annually.

Also: Unique Entity Identifier, Unique Entity ID

Unrelated Business Income Tax (UBIT) Finance

A federal tax a nonprofit owes on net income from a trade or business it runs regularly that is not substantially related to its exempt purpose. The taxable income itself is often called unrelated business taxable income (UBTI).

Also: UBIT, UBTI, Unrelated Business Taxable Income

WCAG 2.1 AA Marketing & Tech

Version 2.1 of the Web Content Accessibility Guidelines at conformance level AA, the technical standard most commonly required for making websites usable by people with disabilities. Level AA includes all the basic Level A requirements plus stricter ones such as minimum color contrast and clear error messages, and it is the benchmark courts and regulators typically point to for ADA-related web access; the U.S. Department of Justice's 2024 ADA Title II rule adopts WCAG 2.1 Level AA as the standard for state and local government web content.

Also: WCAG 2.1 Level AA, WCAG AA, Web Content Accessibility Guidelines 2.1

Whistleblower Policy Governance & Compliance

A written policy that lets employees, volunteers, and others report suspected illegal or unethical conduct without fear of retaliation, and explains how those reports are handled. The IRS asks on Form 990 whether the organization has one.