Working in the nonprofit sector is rewarding and fulfilling, but just like any other profession, it comes with its own vocabulary.
The nonprofit sector employs 13.6 million people in the United States, and that number grew 33% from 2006 to 2021—far outpacing private-sector growth at 9%. That means there are lots of new faces at nonprofit organizations.
Understanding and utilizing the right terminology can be crucial to your organization's success, especially when it comes to fundraising. Whether you're just starting out or looking for a refresher, here's an essential glossary of terms for nonprofit fundraisers:
Annual Fund: A campaign that seeks regular support for an organization's ongoing operational costs.
Acquisition: The process of identifying and gaining new donors for the organization.
Beneficiary: The person or group that receives benefits or services from the nonprofit's work.
Bequest: A donation given through a will or an estate. It's a form of planned giving where individuals leave assets to a nonprofit in their will.
Capital Campaign: A fundraising campaign that seeks large amounts, often for infrastructure projects like new buildings or major renovations.
Challenge Grant: A donation that is made on the condition that other funds must be secured, either on a matching basis or via some other formula, for receiving the grant.
Cultivation: The process of developing and enhancing relationships with potential major donors over time.
Direct Mail: A fundraising method that uses letters, postcards or other mailed materials to solicit donations.
Donor-Advised Fund (DAF): An account where donors contribute and get an immediate tax deduction, but they recommend grants from the fund over time.
Endowment: Funds that are kept permanently and invested, with only the income used for charitable purposes.
Fiscal Sponsorship: A formal arrangement where a nonprofit organization provides financial and administrative support to a project or initiative that lacks its own tax-exempt status.
Grant: Money given by a foundation, corporation or government agency for a specific purpose.
In-Kind Donation: Gifts of tangible items, like food, clothes or services, instead of money.
Lapsed Donor: A previous donor who hasn't donated again within a specific timeframe.
Loyalty Giving: Regular donations from donors, often monthly or annually, signifying their continuous support.
Major Gifts: Large donations (the exact amount can vary by organization), usually given by individuals who are deeply involved with the mission of the nonprofit.
Matching Gift: A donation made by a company to match the donation of an employee, effectively doubling (or sometimes tripling) the gift.
Memorial Gift: A donation made in honor of someone who has passed away.
Mid-Level Gift: A donation amount that falls between the typical, smaller, individual contributions and major gifts.
Non-Governmental Organization (NGO): A type of nonprofit that operates independently from government, typically working on social or political issues.
Operating Support: Funds given to cover an organization’s day-to-day, ongoing expenses, such as salaries.
Peer-to-Peer Fundraising: A fundraising method where supporters raise money on behalf of an organization, typically by leveraging their personal networks.
Planned Giving: Donations made as part of a donor's financial or estate planning, which can include bequests, trusts or annuities.
Pledge: A commitment by a donor to give a certain amount of money over a specific period.
Prospect: A potential donor who hasn't yet given but has the capacity and potential interest to do so.
Raffle: A fundraising method where tickets are sold for a chance to win prizes.
Renewal: The act of soliciting and securing another gift from a current or previous donor.
Restricted Gift: Donations that are given for a specific purpose or project.
Retention Rate: The percentage of donors from a previous year who donate again in the current year.
Soft Credit: Recognition given to a donor who influenced a gift but didn't actually make the donation. For example, if a donor's spouse makes a donation, the donor might receive soft credit for influencing the decision.
Solicitation: The act of asking for or trying to obtain something, especially donations.
Sponsorship: Financial support from businesses in return for advertising or publicity.
Stewardship: The act of managing and caring for the resources donors entrust to a nonprofit, ensuring they're used as donors intend.
Thank You Letter (or Acknowledgment Letter): A letter sent to donors to express gratitude and provide official documentation for their gift.
Tribute Gift: A donation made in someone's honor or memory, often on special occasions like birthdays or anniversaries.
Unrestricted Gift: Donations that can be used for any purpose, often decided by the organization.
Volunteer: An individual who dedicates time and effort without pay to support an organization's mission.
Each term carries significant weight in the realm of nonprofit fundraising. Familiarizing yourself with this expanded glossary will provide a robust foundation, ensuring you are well-prepared to navigate the multifaceted landscape of nonprofit work.