Revenue Sources
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Goals and Financial Resources
Glossary
Source: Selected definitions are drawn form the dictionary of the Association of Fundraising Professionals (AFP), accessed at www.afpnet.com.
Administrative costs — All direct and indirect costs associated with the management of an organization's programs.
Appreciated property — Securities, real estate, tangible personal property, etc., whose current fair market value is greater than its original tax basis.
Asset — All items of value (such as real estate, cash, inventories, securities, or patents), owned by a person or a business, that constitute the resources of that person or business. An organization's holdings including current assets and fixed assets.
Case — The reasons why an organization both needs and merits philanthropic support, usually outlining the organization's programs, current needs and plans.
Challenge gift — A gift donated by a person made on condition that other gifts or grants will be obtained on some prescribed formula, usually within a specified period of time, with the objective of encouraging others to give. A challenge grant is a challenge gift donated by an organization, corporation or foundation.
Corporate sponsorship — Financial support of a project by a corporation in exchange for public recognition and other benefits. Also corporate underwriting.
Cost policy statement — A document that identifies a non-profit organization's policy on the costs that it considers direct, the costs it considers indirect and the rationale to support those costs.
Cost allocation plan — A document that identifies, accumulates and distributes allowable direct and indirect costs to cost objectives. The plan also identifies the allocation methods used for distribution to cost objectives on the basis of relative benefits received. The cost objectives include specific grants, cooperative agreements, contracts, programs, projects, titles/cost categories within a grant, a product or service provided to cost centers or other activities of a non-profit organization (e.g., fund raising, services to members).
Deferred gift — A gift (such as a bequest, life insurance policy, charitable remainder trust, gift annuity or pooled-income fund) that is committed to a charitable organization but is not available for use until some future time (usually the death of the donor).
Designated gift — A gift, the use of which is restricted by the donor. This gift is either a temporarily restricted gift or a permanently restricted gift.
Direct costs — Those costs that can be specifically identified with a particular cost objective. For example, salaries, fringe benefits and travel of a project director who is working 100% of the time on a grant/contract are direct costs. Some non-profit organizations also classify common or joint costs that can be readily assignable to cost objectives as direct costs (e.g., occupancy costs are allocated to a grant/contract as direct costs based on square feet of space occupied).
Earned income — Money received by a person or organization for product sales or service rendered.
Endowment — A permanently restricted net asset, the principal of which is protected and the income from which may be spent and is controlled by either the donor's restrictions or the organization's governing board.
Gift receipt — An official acknowledgment issued to a donor by a recipient organization. If the donation is (currently) more than $250, the IRS requires information naming the charity, the asset donated and any benefits received by the donor in exchange for the gift.
Indirect cost proposal — The documentation prepared by an organization to substantiate its claim for the reimbursement of indirect costs. This proposal provides the basis for the review and negotiation leading to the establishment of an organization's indirect cost rate, (i.e., ratio between total indirect expenses and some financial base).
Indirect costs — Those costs which are not readily identifiable with a particular cost objective but nevertheless are necessary to the general operation of a non-profit organization and the conduct of the activities it performs. The cost of executive salaries, payroll, accounting, personnel, depreciation, general telephone expenses, general travel and supplies expenses are examples of expenses usually considered as indirect costs.
Indirect cost rate — A percentage established by a Federal department or agency for a grantee organization which the grantee uses in computing the dollar amount it charges to the grant to reimburse itself for indirect costs incurred in doing the work of the grant project.
Institutional in-kind contributions — The value of non-cash contributions made by the intermediary to the project. Institutional in-kind contributions can include: volunteer services essential to the project; personnel services valued at a regular rate of pay plus appropriate fringe benefits; indirect costs; supplies, equipment, property, buildings and land already purchased and available for use regarding the project.
In-kind — In goods or services, not in money, such as a contribution of equipment, supplies, space or staff time. The donor may place monetary value on such a contribution for tax purposes. See Institutional in-kind contributions and Third party in-kind contributions.
Life-income gift — A gift arrangement by which a donor makes an irrevocable transfer of property to a charity while retaining an income interest to benefit the donor and any other beneficiary for life or a specified period of years, after which the remainder is distributed to the charity.
Matching gift — A gift contributed on the condition that it is matched, often within a certain period of time, in accordance with a specified formula. Also can be gift by a corporation matching a gift contributed by one or more of its employees.
990 — An Internal Revenue Service financial information return submitted annually by most tax-exempt organizations and institutions except religious. Form 990-PF is submitted annually to the IRS by private foundations reporting on their holdings, income, grants and activities. Form 990-T is submitted annually by not-for-profit organizations to declare any unrelated business income.
Pledge — A promise that is written, signed and dated to fulfill a commitment at some future time; specifically, it is a financial promise payable according to terms set by the donor. Such pledges may be legally enforceable, subject to state law.
ROI — Return on investment.
Temporarily restricted gift — A gift that is temporarily restricted for a particular purpose but, when spent, becomes an unrestricted gift for accounting purposes and is at that time reported as income.
Third party in-kind contributions — The value of non-cash contributions provided by non-Federal third parties. Third party in-kind contributions may be in the form of real property, equipment, supplies and other expendable property and the value of goods and services directly benefiting and specifically identifiable to the project or program.
Unearned income — Organizational income derived from philanthropic gifts and investments, as contrasted with fees for service or product sales.
Unrelated business income (UBI) — Income that is the result of any legal trade or business conducted by a not-for-profit organization to make money in a way not directly related to its Federal, tax-exempt mission.
UBIT — Tax on unrelated business income
Unrestricted gift — A gift made without any condition or designation.
Resources/References |
Goals and Financial Resources