Glossary of Philanthropic Terms
Please remember that the information provided here is not intended as legal, tax or investment advice, so be sure to consult an attorney, tax professional or investment advisor about any specific situation, or for additional clarification.
Also see our Gift Planning Glossary.
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Correspondence sent to a donor as an expression of gratitude for their gift or service.
A donation—often from a trustee or director—that demonstrates a commitment to a campaign and provides momentum prior to the initiation of solicitation of gifts from external audiences.
The presentation of a cause to others, in order to positively influence the course of events.
This is normally a unit that is legally separate from the University; however, is closely associated to the University and assists the University in meeting its strategic goals. Examples include the Alumni Association, the Athletic Association and the U of I Foundation.
Used interchangeably with affiliated organization and University related organization.
Former university students (full or part-time, undergraduate or graduate) who have earned some credit toward a degree.
A fundraising program that generates private gift support on an annual basis. Typically, total gifts made on an annual basis to support yearly objectives. An annual fund is counted in a variety of ways at different institutions—and, the definition of annual fund often differs from an accounting perspective as compared to a fundraising perspective. Annual fund performance over previous years generally includes pledge(s) and all amounts, whereas, the definition of annual fund from an accounting perspective may be the unrestricted cash received during a fiscal year.
Also see Annual Giving.
Annual giving is just that—annual. By making contributions from year-to-year, donors provide a consistent stream of support for the mission of the designated nonprofit or charity.
Also see Annual Fund.
A voluntary report issued by a foundation or nonprofit corporation that provides financial data and descriptions of its fundraising or grantmaking activities. Annual reports vary in format from simple manuscript documents to detailed professionally published publications that provide substantial information about the organization’s programs.
An individual who receives or who is scheduled to receive annuity payments.
A series of equal payments to a person annually or at fixed intervals. An annual payment to an individual. An investment that provides such payment as income for a specified period, such as the duration of the recipient’s life.
Property (securities, real estate, tangible personal property) whose current fair market value is greater than its original tax basis.
Appreciated Securities Gift
A gift of securities with a market value beyond the donor's original tax basis. Appreciated securities generally represent a potential capital gain and capital gains taxes unless given to a charitable organization.
Articles of Incorporation
A document filed with the secretary of state or other appropriate state office by persons establishing a corporation. This is the first legal step in forming a nonprofit corporation.
Financial award made by a university to a graduate student with an expectation of service. The service can be teaching and/or research activities.
A person licensed or legally empowered to act for another (attorney-in-fact) or a licensed attorney-at-law who is qualified to represent a party in a court of law.
A general term for anything of monetary value given to a faculty member or student.
A generous donor, usually at the highest gift levels.
A bequest can be a legacy; a sum of money committed to an organization and donated upon the donor's death. A gift of personal or real property by means of a will when one dies.
Rules governing the operation of a nonprofit corporation, including matters of governance such as the election of directors, the creation of committees, the conduct of meetings and procedures for any alteration.
Also referred to as a capital development campaign. A capital campaign is an organized drive to solicit and accumulate substantial funds to finance major needs of an organization such as a new academic project, a building or major repair project. An intensive fundraising effort to meet specified organizational needs related to growing an endowment fund for the future, building construction, expansion, remodeling; or, equipment acquisition. A concentrated fundraising plan to meet a specific financial goal with a specified period of time.
The reasons for a nonprofit organization's fundraising efforts; justification for its position that it merits gift support.
An explanation of the organization’s or institution’s case for support in manuscript form. The case statement often becomes the overall message platform for the organization. The best case statements address the following:
- What about our organization or institution would make someone want to give?
- What will be accomplished as a result of supporter funding?
- Why is this fundraising effort important at this particular time?
The simple transfer of a gift of cash, check or currency to a nonprofit institution.
Certified Fund Raising Executive.
A kind of nonprofit corporation which exists to support charitable or nonprofit causes, and whose income is generally exempt from taxation by Federal and State law. A Section 501(c)(3) charitable corporation is a special kind of charitable corporation: persons who make donations to a Section 501(c)(3) charitable corporation are usually entitled to deduct the amount of their contribution from their gross income on their personal income tax returns. The Internal Revenue Code is extremely complex in this regard.
Usually refers to the amount which can be taken as an income tax deduction on a donor's federal tax return as a result of a charitable gift.
Charitable Gift Annuity
As stipulated in an irrevocable agreement (contract), a fixed sum of money paid at certain regular times by a charity or nonprofit to a donor or other designated beneficiary, or both, in exchange for the donor’s gift of cash or property. The annuity to be paid is normally determined from actuarial tables based on age(s) of the annuitant(s).
Charitable Remainder Annuity Trust
An irrevocable trust arrangement, established by a donor. This type of agreement provides that a fixed dollar amount—at least 5% of the fair market value of the assets initially placed in trust—be paid to the beneficiary at stated periods, not less often than annually. Donors may name themselves or another beneficiary under the trust; or they may name themselves beneficiary for life and then another person. Upon termination of the trust, the remainder is transferred to the charity or nonprofit named in the agreement.
Charitable Remainder Trust
An irrevocable trust established to provide payments for the life of one or more people or for a term not to exceed 20 years, with the irrevocable remainder being distributed to one or more qualified charities or nonprofits.
Charitable Remainder Unitrust
A type of life-income trust. An irrevocable trust arrangement, established by one or more donors, which provides that a fixed percentage (not less than 5%) of the fair market value of the assets in trust computed annually, be paid to the beneficiary(ies) at stated periods, not less often than annually. This percentage is paid to one or more noncharitable beneficiary for life or a term not to exceed 20 years, with the remainder being distributed to one or more qualified charities or nonprofits.
A private foundation, which is funded by a profit-making corporation and has as its primary purpose the distribution of grants for charitable use according to established guidelines. A company-sponsored foundation often maintains close ties with the donor company, but it is a separate, legal organization, sometimes with its own endowment, and is subject to the same rules and regulations as other private foundations.
These are funds intended to be used during the current fiscal year. Current contributions of cash, stocks, bonds, mutual fund shares, real estate and personal property are considered "outright gifts". In an academic setting, such gifts can provide current support for a variety of urgent needs, such as establishing scholarships or purchasing lab equipment.
A commitment or gift established during a donor's lifetime, the principal benefits of which do not accrue to the institution until some future time, usually at the death of the donor and/or his income beneficiary.
Funds under the control of the governing body, and which have been earmarked for a specific use.
A gift, the use of which is restricted by the donor. Such a gift’s use may be either temporarily or permanently restricted.
The total process by which a nonprofit organization increases public understanding of its mission and acquires financial support of its mission. Refers to all of the dynamics of a continuing fundraising program (annual giving, special gifts, deferred gifts, trust relations, communications, etc.).
Money that can be expended, without restrictions, for an organization’s needs.
Typically supports the visit of an eminent scholar for a specific, short period of time.
The person or organization who receives a gift or charitable commitment.
A donor is anyone who gives resources—financial, social, intellectual and time—to a nonprofit organization, public charity or fund. A donor is committed to making a positive difference in human society.
The policy and practice of providing recognition to a donor via personal contact (letter or phone call) or publication using communications vehicles such as a newsletter, web site, etc. Calls attention to the fact that a donor has made a gift, and thanks them for their engagement with the organization and its mission.
Planned program of developing and maintaining donor interest through acknowledgments, information, personal involvement and so forth.
In an endowment fund, the principal is invested, and only a portion of the investment earnings is spent. The rest of the earnings are channeled back into the fund, so that the endowment grows over time. In this way, the endowment becomes a perpetual source of funding for whatever the donor wishes to achieve. (Endowments may be either restricted or unrestricted, depending on whether there are purpose restrictions on the use of the income from the endowment.)
Everything that a person owns; an individual’s possession and/or investments.
A federal tax on the net value of an estate, before it is distributed to beneficiaries.
In law, a person appointed by a testator to carry out the wishes specified in the testator’s will. Can be a trust company or individual appointed to carry out the terms of a will. The executor will often handle all necessary tax filings for the estate as well.
Related to the Brilliant Futures Campaign ((link to BF)). Smart, talented people are the center of a knowledge economy, and one of the University’s chief goals is to be an educational leader in today’s evolving global society. To achieve this objective, the University needs to attract and retain the most gifted teachers. The creation and support of endowed chairs and professorships can attract and retain faculty and supplement state funds to provide a more competitive salary structure. With their faculty support, donors are making a powerful commitment to fostering research and scholarship in a given discipline and to building outstanding academic programs at both the graduate and undergraduate level. In fact, the named endowed chair exemplifies the highest honor that the University can confer on a highly valued, prominent faculty member, in large part because it permits them to utilize dedicated resources for pioneering scholarly research and challenging teaching initiatives.
Fair Market Value
A value generally defined as the amount that a willing purchaser would pay a willing seller in a normal market. Charitable gifts are generally valued at their fair market value. The responsibility for determining this value is generally left to the donor. The Internal Revenue Service requires donors to obtain appraisals for certain gifts of personal property, other than securities and other items that have an established market, when a charitable tax deduction is taken.
Financial award to a graduate student usually including a stipend and payment of tuition and fees. There is no expectation of service from the recipient.
A person who acts on behalf of another, usually in a financial matter. A person, such as a trustee or executor, responsible for handling the business affairs or the estate of another individual. In an organizational setting, a person, such as a company director or an agent of a principal, who stands in a relationship of trust, of confidence and responsibility to another or others.
Section of the Internal Revenue Code that designates an organization as charitable and tax-exempt. Examples of organizations qualifying under this section include religious, educational, charitable, amateur athletic, scientific or literary groups, organizations advocating for public safety or organizations involved in prevention of cruelty to children or animals. Most organizations seeking foundation or corporate contributions secure a Section 501(c)(3) classification from the Internal Revenue Service (IRS).
Friend of the University
An individual who has generously contributed to a university although they are not an alumnus or alumnae of the institution.
This agreement establishes the guidelines for the operation of a fund established by gift, property or cash, usually an endowment or quasi-endowment.
Securing assets and resources from donors to support the mission of a non-profit or charitable organization.
A gift is the receipt of something of value, such as money or other economic assets, by a non-profit or charity, from a donor who provides support for the organization’s mission and programs. There is no economic benefit provided by the nonprofit in return. An individual, a corporation, or even another non-profit entity may be the donor of a gift.
The formal procedure and related organizational mechanisms used by a nonprofit or charity for determining if a gift is appropriate and can be used to further the organization’s mission.
Non-cash gifts of tangible or intangible property are generally known as gifts-in-kind. Tangible property can fall into two distinct categories, and its value is derived from its physical existence: (1) objects, such as art, equipment, software, automobiles, printed materials, etc.; (2) or, services, such as providing photography or video editing services. The value of a gift of tangible property is typically established by independent appraisals. Intangible personal property is property whose value stems from intangible elements. Examples include patents and copyrights.
The process of generating a receipt form for every gift made to a non-profit or charity by its donors.
A financial gift or donation given to support a person, organization, project or program. A grant usually carries conditions imposed by the donor, requiring very specific actions including detailed reporting on the part of the recipient.
Includes everything in which the decedent owned an interest at his or her death, embracing life insurance, joint property, and transfers made in contemplation of death or intended to take effect at or after death, or where the power to change the enjoyment of property has been retained.
Collectively, nonprofit or tax-exempt organizations that are specifically not associated with any government, government agency or commercial enterprise.
A donation or gift of goods or services rather than cash or appreciated property.
Also see Gift-in-Kind.
Inter Vivos Gift
In law, a gift made by a donor during their lifetime as opposed to testamentary disposition.
Death without having made a legal will; not disposed of by a legal will.
A process and/or program of building awareness and support from all of constituent stakeholders.
Jointly Owned Property
Property owned by two or more persons, usually with the right of ownership in the one or ones who survive; normally unaffected by a will. In certain states, however, it may be willed under well-defined circumstances. Inherent in most joint ownership arrangements is automatic passage of sole and absolute ownership to the surviving joint owner when one joint owner dies. Except where a married couple is involved, jointly owned property is included in the estate of the deceased to the extent that the deceased provided the resources to secure the property.
A gift donated at the beginning of a campaign that “sets the standard” for future giving.
Bequest. A disposition in a will of personal property.
Life Estate (a.k.a Life Interest)
An interest or claim that is held only for the duration of the life of the person to whom interest in given, or for the duration of the life of another person. Interest in or claim on property that is not full ownership. The benefit from the property only accrues to the party holding it for the duration of the party's life or the life of some other person.
Life Income Gift
A gift arrangement by which a donor makes an irrevocable transfer of property to a nonprofit or 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 nonprofit or charity.
Life Insurance Gift
The irrevocable assignment of a life insurance policy for charitable disposition.
Refers to a revocable arrangement established during lifetime. This method of giving allows donors to make certain provisions for themselves and their families, and thereafter, provide for a benefit to the specified nonprofit or charity to further its programs. While a living trust can be a generic name for any trust which comes into existence during the lifetime of the person or persons creating the trust, most commonly it is a trust in which the trustor(s) receive benefit(s) from the profits of the trust during their lifetimes, followed by a distribution upon the death of the last trustor to die, or the trust continues on for the benefit of others, with profits distributed to them.
Typically, a gift made by a corporation matching a gift contributed by one or more of its employees. A gift contributed on the condition that it be matched, often within a certain time period, in accordance with a specified formula.
Matching Gifts Program
A grant or contributions program that will match employees' or directors' gifts made to qualifying educational, arts and cultural, health or other organizations. Specific guidelines are established by each employer or foundation.
Gift made to perpetuate the memory of an individual. This term should not be confused with a gift to honor a living person.
An endowment fund that normally carries the name of the contributor and/or the purpose of the gift. The donor—which can be either a firm, an individual or a foundation—may also designate their endowment for specific purposes and place some restrictions on the use of the funds.
An important way to utilize the concept of endowment to recognize key faculty members who are making extraordinary contributions to their field, and extend high-caliber performance in research, teaching and scholarship, often into entirely new areas. A professorship may be awarded for a set term or the tenure of the holder, to recognize current faculty or attract new faculty. The donor—which can be either a firm, an individual or a foundation—may also designate their endowment for specific purposes and place some restrictions on the use of the funds.
The study of an organization’s program or situation to determine what activities or programs should be expanded to satisfy a need related to the organization’s mission.
Annual return required by Internal Revenue Service of all organizations exempt from income tax as specified under section 501(c)(3) of Internal Revenue code.
Pertains to or provides benefit to the public, or to society as a whole, without financial incentive or profit. A non-profit organization is designated by the Internal Revenue Service as a tax-exempt organization. Also referred to as a not-for-profit.
Philanthropy is defined in different ways. Generally, it is voluntary action for the public good, a love for humanity, usually expressed by an effort to enhance the well-being of others through personal acts of practical kindness or by financial support of a cause or causes. Any effort to relieve human misery or suffering, improve the quality of life, encourage aid or assistance, or foster preservation of values through gifts, service or other voluntary activity. Philanthropic giving supports a variety of activities, including research, health, education, arts and culture, as well as alleviating poverty.
A gift arranged through the process of gift planning.
A systematic process focused on assisting a donor to integrate sound personal, financial and estate-planning concepts with the individual’s plans for lifetime or testamentary giving. The benefits of these gifts would be realized by the nonprofit or charity at some time in the future. Planned giving can involve various forms of life income plans, bequests, homes and farms subject to life estates, revocable trusts and life insurance.
A promise that is written, signed and dated, to fulfill a commitment at some future time. A promise to pay or provide a specified charitable commitment within a specified period of time. For example, some donors make multiyear pledges promising to give a specific amount of money each year.
A printed form used by a donor as a response to a fundraising appeal.
Pooled Income Fund
A type of life-income trust. A trust into which two or more donors irrevocably transfer property, contributing the remainder interest in the property to a nonprofit or charity. The property conveyed must be commingled with other property transferred into the fund, and each donor retains an annual income interest based upon the proportionate share of assets which he/she contributed to the total fund. As with the annuity trust and uni-trust, the donor may name himself, herself or others as beneficiaries.
Power of Attorney
The legal commission that empowers a person to act for another. The legal document which grants authority for one person (not necessarily an attorney-at-law) to act as another's agent.
The area of a nation’s economy and civic enterprise that is under private, rather than governmental, control.
A court-supervised process of settling an estate in which all expenses are addressed as part of the process and all property is distributed according to the terms of a will. The legal determination that a will is genuine. The act or process by which a will is approved and legally established; the act or determination of a competent court which establishes the validity of a will.
Related to the Brilliant Futures Campaign. Programmatic support provides an important expansion of the academic learning environment, by supporting opportunities to engage the most important intellectual leaders and prominent agenda setters from around the world to present their thoughts and findings at each campus of the University of Illinois. Such distinguished guests often teach short courses, offer public lectures, conduct seminars and lead colloquia and symposia planned around their research, professional endeavors or areas of expertise. Programmatic support can also enable the University to create much-needed research programs and/or facilities that will unite disciplines and improve teaching and research in all of the diverse fields of learning and inquiry led by the U of I and its campuses.
A written plan and request for private financial support. Typically, outlines the chief goals and objectives of the area to be funded, and benefits to be accrued as a result.
An endowment from which the funds, both principal and interest, may be expended at the discretion of the governing board.
Real Estate Gift
Gift of real property, e.g. land or buildings.
Formal or informal acknowledgment of a gift or contributed services; an event, communication or item honoring a gift or service.
Related to the right to receive the remaining principal when a trust terminates. A donor gives the designated nonprofit or charity the right to receive that property in the future, after the donor’s death or the death of another person, or after a certain number of years.
That portion of the estate that remains after all other bequests have been distributed or paid, and debts and expenses have been paid.
Gift, grant or pledge of money limited by the donor for a specific purpose with moral and legal restraints precluding use for any other purpose.
A trust that can be changed or terminated by the person creating it.
Also see Trust.
Financial award to an undergraduate student to help pay for educational expenses.
Used broadly to mean stocks, bonds, promissory notes; a document showing ownership in a financial enterprise. Securities, including stocks and bonds, may be used to make a gift to nonprofit or charity. The amount of the deduction is normally based on the asset's current market value rather than the donor's actual cost of acquiring the securities. The method for transferring securities differs, depending on how the securities are held.
This term is reserved for specific fundraising activities, such as, construction of a facility. There is a specific purpose, a limited timetable and generally a one-time effort.
This refers to the responsibility of a nonprofit or charity to insure that gifts received are used as intended by the donor, and to report to the contributors or their families regarding the specific use of gifts.
Related to the Brilliant Futures Campaign. Many of our top-quality U of I students—of all income levels—base their final college choice on the financial support that they are able to obtain. For them, financial aid is the lifeline to their college opportunities. By helping to bridge the gap between a family’s income and higher education costs, scholarships and other gifts to the University allow us to keep tuition more affordable and learning opportunities more accessible.
The donor stipulates that upon the passage of time or the occurrence of a specific event the endowment principal can then be utilized either for a specific purpose or for the general operation of the institution.
Of, or pertaining to, a will or such testament as a document. Founded on, derived from or created by a will.
A gift of property to a person or an organization by will, effective upon the death of the donor.
Having made a legally valid will before death.
An arrangement whereby one or more persons or institutions holds and manages property for the benefit of another. The person establishing the trust is known as the settler, donor trustor, grantor or creator. The person or financial institution holding legal title to the property and having the responsibility to manage it is the trustee. The person(s) or institutions to be benefited by the trust are the beneficiaries. Trusts may be revocable or irrevocable. Most charitable trusts are established irrevocably. When the trust cannot be changed or withdrawn by the trustor, it is termed irrevocable.
A person or agent, such as a bank, holding legal title to property in order to administer it for a beneficiary.
Unrestricted funds are those received from the donor with no limitations on how the gift is to be used. They are often considered the most powerful form of private support because they permit the nonprofit or charity to act with operational and intellectual flexibility based on current immediate need. Unrestricted funds are particularly vital for initiatives and projects for which other sources of funding may be unavailable or inadequate.
Volunteering is effort voluntarily undertaken to benefit a cause that you strongly believe in. Volunteers devote their time and energy to causes and organizations that matter to them. If a volunteer cares enough about an organization or institution to spend time helping it to achieve its goals, then that volunteer is conveying to others that the institution is valuable and worth supporting. Through their work, volunteers motivate and recruit other volunteers, stimulate community awareness of the organization and enhance its culture by bringing a wide range of experience and enthusiasm for service to students, faculty and staff. They also set a positive example for other constituents by demonstrating the value of hands-on service and commitment.
Volunteers tend to be motivated to support a nonprofit or charity because they believe in its mission, wish to connect with others involved in the organization’s community, appreciate access to specific information or people or are grateful for the opportunities that the organization has enabled for them.
The legal declaration of a person's intentions as to the disposal of his or her estate after death. A written instrument legally executed by which a person makes disposition of his or her property to take effect after death.
A will entirely written and signed by the testator or maker in his or her own hand.
An oral will made by a person in his last illness or extremity before witnesses, often not honored in a court of law.
A will whereby assets controlled by the will are directed to be poured-over into a trust.
Wills made by two persons in which they leave everything to the other.
Workplace Giving Campaign
Many corporations work with non-profit organizations to encourage employees to contribute to charitable causes. Companies often support these efforts through matching gifts, payroll deductions and informational materials or events. Companies are increasingly tying this type of employee involvement program to their broader community affairs, employee volunteer and philanthropy programs.