Words, Words, Words: Glossary of Fundraising Terms

As the practice of fundraising has evolved and become more professionalized and complex, many new terms have been created or repurposed that people unfamiliar with fundraising may not understand. For this reason, the Association of Fundraising Professionals (AFP) developed a complete glossary of terms to help individuals become more comfortable “talking the talk” of development. In this Annual Manual Guide, we have gathered the most common terms from that glossary (and added a few of others) to help anyone new to development understand the lingo.

The complete list of terms can be found at http://www.afpnet.org/files/contentdocuments/afpfundraisingdictionary.pdf

acknowledgment Written expression of gratitude for gift or service.

acquisition mailing (or prospect mailing) A mailing to prospects to acquire new members or donors.

advisory board A group of influential and prominent individuals whose association with a development program is calculated to lend luster and implied endorsement of the program’s goals and objectives.

anecdote A short story that vividly illustrates the impact that a program has had on a participant’s life.

annual giving Annually repeating gift programs; seeking funds on annual or recurring basis from the same constituency; income is generally used for operating budget support.

annual report A yearly report of financial and organizational conditions prepared by the management of an organization.

benefactor One who makes a major gift to an institution or agency; also, an arbitrary classification of contributors whose gifts are above a certain level, which is calculated to single them out as a group and to stimulate similar giving by others.

bequest A transfer, by will, of personal property such as cash, securities, or other tangible property.

capital campaign A carefully organized, highly structured fundraising program using volunteers supported by staff and consultants to raise funds for specific needs, to be met in a specific time frame, with a specific dollar goal. Allows donors to pledge gifts to be paid over a period of years.

case statement Also called a Case for Support. A document which describes a nonprofit and discusses the mission, vision, and purpose of the program and it’s fundraising efforts. The Case Statement provides a clear and compelling set of reasons why an individual would donate to an organization or program.

certified fundraising executive (CFRE) A credential granted to a fundraiser by the Association of Fundraising Professionals (AFP), which is based on performance as a fundraising executive, knowledge of the fundraising field, tenure as a fundraiser (minimum of five years), education, and service to the profession.

charitable deduction The value of money or property transferred to a 501(c)(3) organization, deductible for income, gift, and estate tax purposes. In most cases, the term charitable deduction refers to the portion of a gift that can be deducted from the donor’s income subject to federal income tax. A donor’s charitable deduction should not be confused or equated with the value of a gift; that is, gifts for the purpose of life income agreements are not federally deductible at their full value.

corporate foundation The philanthropic arm created by a corporation to deal with requests for contributions from various agencies—locally, regionally, or nationally.

crowdfunding The practice of funding a project or venture by raising many small amounts of money from a large number of people, typically via the Internet.

cultivation The process of promoting or encouraging interest and/or involvement on the part of a potential donor or volunteer leader; an educative process to inform about an institution and the reasons why it merits support.

development Also referred to as fundraising. Development is a strategic approach to identifying and engaging prospective donors for a specific organization or program.

direct mail Solicitation of gifts or volunteer services and distribution of information pieces by mass mailing.

donor The individual, organization, or institution that makes a gift.

donor database A digital system for storing a variety of information about a donor, such as their contact information, relationships to other donors, and donation history, in a way that makes information easy to sort and retrieve. Because of their ability to query records and generate reports, databases are much more powerful than a basic spreadsheet.

electronic funds transfer (EFT) A method whereby donors instruct their banks to make monthly deductions from their accounts, designated for the charitable organization of their choice.

endowment Principal or corpus maintained in a permanent fund to provide income for general or restricted use of an agency, institution, or program.

family foundation A foundation whose funds are derived from members of a single family. Generally, family members serve as officers or board members of the foundation and play an influential role in grantmaking decisions.

feasibility study An in-depth examination and assessment of the fundraising potential of an institution or agency, conducted by fundraising counsel and presented in the form of a written report setting forth various conclusions, recommendations, and proposed plans.

form 990 A form submitted by grantmaking foundations to the IRS disclosing the organization’s finances, board members, and often a listing of their grants made in the previous year. These are public documents.

grant A free gift of money, which does not need to be repaid, given to support a specific project. Grants are generally recognized to be gifts from a philanthropic foundation.

grant proposal An application to a grantmaking agency which makes the case for why a grant for a particular project is in fact an investment toward a positive change that aligns with the foundation’s guiding principles.

independent sector A term used to describe all nonprofit organizations, as distinct from government and corporations formed to make a profit, also called the third sector; not to be confused with the organization Independent Sector.

letter of inquiry A letter sent by an organization to a foundation or corporation presenting a project for which funding is being sought and asking the foundation or corporation if they will consider funding the project or receiving a full proposal.

lybunt “Last Year But Unfortunately Not This [Year]” – those donors who made a gift to a particular nonprofit last year but have not done so this year

newsletter A collection of stories, photos, announcements and individual profiles sent via mail or email to donors and prospects for the purpose of informing them on the programming and impact of a nonprofit organization.

philanthropic foundation A corporation or trust that has been created through contributed funds, whether by an individual, family, corporation, or community, for support of nonprofit organizations, and to which such organizations may appeal for grants in support of their programs and projects.

planned gift A gift provided for legally during the donor’s lifetime, but whose principal benefits do not accrue to the institution until some future time, usually at the death of the donor or his or her income beneficiary.

pledge A signed and dated commitment to make a gift over a specified period, generally two or more years, payable according to terms set by the donor, with scheduled monthly, quarterly, semi-annual, or annual payments.

qualification Typically an initial interaction with a donor or prospective donor, qualification  is determination of whether a donor has enough linkage, interest and ability to warrant investing more time and energy developing the relationship.

restricted gift A gift for a specified purpose clearly stated by the donor.

solicitation The act of asking a constituent for a specific amount of money, for a specific purpose within a specific timeframe.

stewardship The guiding principle in philanthropic fundraising. Stewardship is defined as the philosophy and means by which an institution exercises ethical accountability in the use of contributed resources and the philosophy and means by which a donor exercises responsibility in the voluntary use of resources.

sybunt “Some Year But Unfortunately Not This [Year]” – those donors who made a gift to a particular nonprofit in past years but not last year and have not done so this year

testimonial A statement made by somebody who has had a positive encounter with a nonprofit detailing just how the organization has been important in their life.

unrestricted gift A gift to an institution or agency for whatever purposes officers or trustees choose.

This Glossary of Fundraising Terms is an excerpt from the Petrus Annual Manual How-To Guides. Visit www.petrusdevelopment.com/annualmanual today to read more about this program, watch videos, and complete our contact form to receive two free downloads of the How-To Guides.