CharityEngine’s Nonprofit Glossary

Term 

Definition 

501(c)(3) 

A tax-exempt nonprofit organization under the IRS code. 

501(c)(4) 

A tax-exempt nonprofit organization focused on social welfare, such as lobbying and advocacy 

Advocacy Software for Nonprofits 

Fundraising software with tools to help advocacy nonprofits galvanize supporters to take action. These can include legislative and zip-to-district matching. 

Aggregator 

An aggregator is a type of payment processing service that processes payments through a single merchant account for all contributions. This means that all nonprofits that use the same aggregator also use the same merchant account. Aggregators provide ease of use but little customization, flexibility, or speed. 

Annual Report 

A comprehensive report, often prepared for the Board of Directors, that details a nonprofit’s activities and financial health over the past year. 

Articles of Incorporation 

The legal documents filed with the state to establish a nonprofit organization. 

Audit 

A third-party review of financial records. 

Best Nonprofit CRM 

A fundraising platform that best enables your nonprofit to deliver on its mission. 

Board Development 

The process of providing board members with training and resources to perform their role effectively. 

Board Giving 

The philanthropic actions taken by a nonprofit board. 

Board of Directors 

An elected group that oversees a nonprofit's operation, governance, and financial stability. 

Board Recruitment 

The process of recruiting individuals to serve on your nonprofit board.  

Bylaws 

Rules by which your nonprofit is governed. 

Capacity Building 

The process of strengthening the skills, knowledge, and resources of an individual, group, or organization. 

Capital Campaign 

A fundraising effort launched to raise significant funds for a strategic project, such as construction of a new building. 

Case for Support 

A document that explains what your nonprofit does, why it’s important, and why people should support you. 

Case Statement 

A document that details the reasons for supporting your nonprofit’s mission. 

Charitable Contribution 

Often tax-deductible, this is a monetary donation made to your nonprofit. 

Community Foundation 

An organization that provides grants to local charities. 

Conflict of Interest 

A situation in which personal interests might interfere with someone’s duties to the nonprofit. 

Core Values 

The root beliefs of your organization (how you achieve your core purpose). 

Corporate Giving 

Charitable grants and donations from a business.  

Corporate Sponsorship 

Financial or in-kind support from a business, usually in exchange for promotion or recognition. 

Cost-Benefit Analysis 

A calculation to examine the monetary cost of an item, such as a fundraising platform, versus the benefit derived from using that item. 

CRM for Charities 

A technology platform that helps nonprofits store, update, and report on donor data. 

Crowdfunding 

A fundraising technique, often via online platforms, in which money is raised by many people giving small amounts. 

Development 

Finding, cultivating, and securing financial support for a nonprofit.  

Donor Acquisition 

The process of identifying, recruiting, and securing new donors through nonprofit marketing. 

Donor Advised Fund 

A giving account established at a public charity. Donors contribute to the fund and can help advise the distribution of donations. 

Donor Journey 

The complete experience a donor has with a nonprofit, from awareness about an organization to becoming an advocate for that nonprofit.  

Donor Retention 

Actions taken by a nonprofit to keep existing donors. 

Dues 

The price members pay to be in your nonprofit. 

E-commerce for Nonprofits 

A method to diversify nonprofit income. Selling items, whether physical items or an experience, can help nonprofits expand their reach and raise money. 

Endowment 

A type of fund in which the principal is retained while the investment income is used for nonprofit expenses. 

Ethical Fundraising 

Demonstrating accountability and respect for donors. 

Executive Director 

The senior position in a nonprofit, responsible for the overall operations and administration. 

Fiduciary 

A person who manages assets on behalf of another and is committed to acting in their best interest. 

Fiscal Sponsor 

A tax-exempt organization that provides its tax status to an organization that doesn’t have its own. 

Form 990 

The IRS form nonprofits must file annually to provide financial information. 

Foundation 

A type of nonprofit that provides grants to other nonprofits or individuals. 

Fund Accounting 

A specialized accounting system used by nonprofits that organizes its resources into funds, and the overall fund balance is the sum balance of the smaller funds. This method emphasizes accountability rather than profitability.  

Fundraising 

Activities taken by a nonprofit to solicit donations. 

Gift Acceptance Policy 

Clear guidelines detailing the types and cost of the gifts a nonprofit can accept. 

Grant 

Funds nonprofits receive from the government, business, or community foundation. These are given to support a mission and are not intended to be repaid.  

Grant Writing 

Completing applications for nonprofit grants from institutions. 

Grassroots Fundraising 

Fundraising effort involving communities and local volunteers. 

Impact Measurement 

A metric that reflects the effectiveness and outcomes of a nonprofit’s activities. 

In-Kind Donation 

A non-monetary donation of goods or services to a nonprofit. 

Institutional Funds 

An investment vehicle only available to institutional investors, such as pension funds, insurance companies, and foundations. 

IRS Determination Letter 

Document from the IRS recognizing tax-exempt status. 

Key Performance Indicators (KPIs) 

The metrics a nonprofit chooses to track. These measure the organization’s success in reaching its goals. 

Leadership Development 

The process of improving the skills of leaders. 

Legacy Giving 

Gifts made to a nonprofit in a will or as part of an estate plan. 

Lobbying 

Any activities that attempt to influence legislation and policy. 

Logic Model 

A visual representation of the relationships between your resources, activities planned, and results you hope to achieve. 

Major Gift Software 

Fundraising software developed to help nonprofits identify, recruit, and manage major gift donors. 

Major Gifts 

Significant monetary donations from individuals or corporations. 

Matching Gifts 

Donations from an employer that match donations made by their employees. 

Membership 

Offering nonprofit membership is an effective way to engage supporters and incentivize giving. Memberships help donors feel connected to your nonprofit. 

Merchant Account 

An aggregator is a type of payment processing service. This type of service processes payments through a single merchant account for all contributions. This means that all nonprofits who use the same aggregator also use the same merchant account. They provide ease-of-use, but not much customization, flexibility, or speed. 

Mission Drift 

When a nonprofit’s resources and activities move away from a stated goal. 

Mission Statement 

A written and unchanging statement that details a nonprofit’s purpose and goals. 

Multichannel Fundraising 

Using multiple outreach methods, such as phone calls, email, direct mail, and text, to engage donors and raise money. 

NCOA 

A secure dataset maintained by the USPS of millions of permanent National Change of Address records. 

Needs Assessment 

The process for determining if there is an actual, measurable need your nonprofit’s mission will address. 

Nonprofit 

A tax-exempt organization that operates for the public, social, or environmental good, rather than to make a profit. 

Nonprofit Credit Card Processing 

The process by which a credit card donation is processed and routed to a nonprofit’s account. 

Nonprofit CRM 

A Customer Relationship Management (CRM) system built for nonprofits that helps them manage donors, volunteers, and other supporters. Robust CRMs also offer tools to execute common fundraising campaigns. 

Nonprofit CRM Features 

The functionality of a software platform. Nonprofits should choose the platform with the most necessary features to achieve their goals. 

Nonprofit CRM Software 

Software specifically developed to help nonprofits with donor management and fundraising. 

Nonprofit Event Management Software 

Software designed to help nonprofits with planning and executing fundraising events. 

Nonprofit Governance 

The framework nonprofits use to manage their operations, including financial and compliance responsibilities. 

Nonprofit Payment Processing 

The process through which donations to nonprofits are processed and routed to a bank account. 

Nonprofit Sector 

The sector that qualifies as tax-exempt with the IRS. 

Online Advocacy Software 

Programs available on the internet to help advocacy nonprofits manage their efforts to create change. 

Operating Budget 

The annual financial plan, detailing expected expenses and income. 

Operating Reserve 

A portion of funds nonprofits set aside to stabilize finances. 

Outcome Evaluation 

A review of the changes or results of a nonprofit’s activities. 

Outreach 

Any method nonprofits use to engage and recruit supporters. 

Overhead 

Administrative and general expenses necessary to run an organization. These can include salaries and expenses such as rent. 

Partnership 

A relationship in which a corporation and a nonprofit join forces to meet a common goal. 

Payment Gateway 

A payment gateway uses a series of encryptions to securely authorize a transaction before it moves forward.  

PCI-Certified 

A step above compliance, PCI certification requires a rigorous process and a comprehensive audit by a qualified security assessor to ensure all of the proper security measures are taken while processing payments. 

PCI-Compliant 

The Payment Card Industry (PCI) created a series of standards for companies and nonprofits to uphold to process payments safely. PCI-compliant processing services adhere to these guidelines and internally check their processes with a self-assessment to avoid violations. 

Peer-to-Peer Fundraising 

A method of fundraising in which individual supporters host campaigns to collect donations from friends on behalf of your nonprofit.  

Philanthropy 

Free gifts of time or money to support a nonprofit. 

Planned Giving 

Donations to a nonprofit decided in advance, often as a part of financial or estate planning. 

Pledge 

A commitment to donate a sum, with smaller payments being pledged over time. 

Pro Bono 

Any professional services provided for free, without the expectation of payment. 

Program Evaluation 

A periodic assessment of your nonprofit’s programs, efforts, and outcomes. 

Program Officer 

A position in a nonprofit responsible for managing grants and building relationships with grantors. 

Program Service Revenue 

A common way for nonprofits to raise money, this refers to a nonprofit charge related to its mission. For example, an animal shelter can charge an adoption fee and still be a nonprofit. 

Prospect Research 

A method, often involving artificial intelligence, that nonprofits can use to gather information on potential donors, particularly major gift prospects.  

Public Support Test 

A test to ensure a public charity still meets its tax-exempt status. To calculate, divide the amount of public support by the total support received. If the amount of public support exceeds 33.33%, it qualifies as a public charity. 

Recurring Donations 

A donation made regularly, most often monthly, by a donor over a sustained period of time. 

Restricted Funds 

Funds a donor directs to a specific program or purpose. 

Restricted Grant 

A grant from a donor or an organization that specify how and when the funds are to be used. 

Revenue 

The total income received by a nonprofit, inclusive of donations, grants, and other sources. 

Social Enterprise 

A revenue-generating business with a mission. These companies use profits to address a social need. 

Special Events 

Fundraising events, such as auctions or galas, organized by a nonprofit. 

Sponsorship 

Financial or in-kind support offered to a nonprofit. In return, the organization or individual receives public recognition. 

Stakeholder Engagement 

A measure of how involved supporters are with a nonprofit. 

Stakeholders 

Individuals or groups engaged with a nonprofit. 

Stewardship 

The plan to manage, thank, and nurture donors to ensure continued support. 

Strategic Plan 

The documentation of a nonprofit’s overall direction and strategy, explaining how resources will be allocated to attain goals. 

Sustainability 

The ability of a nonprofit to sustain itself over the long term. A hallmark of sustainability is a robust monthly giving program. 

Sustained Giving 

A component of fundraising in which donors commit to an ongoing donation. 

Tax Deductible 

Contributions that can be deducted from a donor’s taxable income. 

Tax-Exempt Status 

An IRS designation that means income is exempt from federal, state, and local taxes.  

Text-to-Give Fundraising 

This type of fundraising asks people to donate to your nonprofit via text messages on their phones. 

Third-Party Fundraiser 

An individual or group that raises money for a nonprofit without direct involvement. 

Transparency 

Openness about a nonprofit’s operations and finances. 

Unrestricted Funds 

Income that can be used at a nonprofit’s discretion for expenses like overhead. 

Virtual Private Network 

A virtual private network (or VPN) uses encryptions to ensure internet security during payment processing. It’s used to keep payment data in the hands of the right people and to prevent fraudulent payments.  

Volunteer 

One who donates time and skills to a nonprofit without financial compensation. 

Volunteer Appreciation 

A plan to appreciate, recognize, and thank nonprofit volunteers. 

Volunteer Coordinator 

The nonprofit team member responsible for recruiting and managing volunteers. 

Volunteer Management Software 

Software with the functionality to manage, nurture, support, and thank volunteers. 

Volunteerism 

The practice of offering skills and time to a nonprofit without financial compensation. 

Work Plan 

A detailed outline of tasks, timelines, and responsibilities required to meet specific goals. 

Year-End Giving 

The campaigns launched during October, November, and December to capitalize on the seasonal uptick in year-end charitable donations.