Annual report: A voluntary report
issued by a foundation or corporation that provides financial data and
descriptions of its grantmaking activities. Annual reports vary in
format from simple typewritten documents listing the year's grants to
detailed publications that provide substantial information about the
grantmaker's grantmaking programs. Approximately 1,100 foundations
Assets: The amount of capital or
principal — money, stocks, bonds, real estate, or other resources —
controlled by a foundation or corporate giving program. Generally,
assets are invested and the resulting income is used to make grants.
Associates program: A fee-based
membership program of the Foundation Center providing toll-free e-mail
and telephone reference, photocopy and fax service, computer searches
of Foundation Center databases, attendance at an annual conference, and
access to a special Associates-only web site.
Beneficiary: In philanthropic terms, the
donee or grantee receiving funds from a foundation or corporate giving
program is the beneficiary, although society may benefit as well.
Capital support: Funds provided for endowment purposes, buildings, construction, or equipment.
CD-ROM: Acronym for Compact Disk-Read
Only Memory. CD-ROMs are
high-capacity computer disks that allow publishers and other
information providers to distribute large amounts of information in a
Challenge grant: A grant that is paid
only if the donee organization is able to raise additional funds from
other sources. Challenge grants are often used to stimulate giving from
other donors. See also matching grant.
Community foundation: A 501(c)(3)
organization that makes grants for charitable purposes in a specific
community or region. The funds available to a community foundation are
usually derived from many donors and held in an endowment that is
independently administered; income earned by the endowment is then used
to make grants. Although a community foundation may be classified by
the IRS as a private foundation, most are public charities and are thus
eligible for maximum tax-deductible contributions from the general
public. See also 501(c)(3); public charity.
Community fund: An organized community
program which makes annual appeals to the general public for funds that
are usually not retained in an endowment but are instead used for the
ongoing operational support of local agencies. See also federated giving program.
Company-sponsored foundation (also
referred to as a corporate foundation): A private foundation whose
assets are derived primarily from the contributions of a for-profit
business. While a company-sponsored foundation may maintain close ties
with its parent company, it is an independent organization with its own
endowment and as such is subject to the same rules and regulations as
other private foundations. See also private foundation.
Cooperating Collection: A member of the
Foundation Center's network of libraries, community foundations, and
other nonprofit agencies that provides a core collection of Center
publications in addition to a variety of supplementary materials and
services in areas useful to grantseekers.
Corporate foundation: See company-sponsored foundation.
Cooperative venture: A joint effort
between or among two or more grantmakers. Cooperative venture partners
may share in funding responsibilities or contribute information and
Corporate giving program: A grantmaking
program established and administered within a for-profit corporation.
Because corporate giving programs do not have separate endowments,
their annual grant totals generally are directly related to company
profits. Corporate giving
programs are not subject to the same reporting requirements as
DIALOG: An online database information
service made available by the Thomson Corporation. The Foundation
Center offers two large files on foundations and grants through DIALOG.
Distribution committee: The committee
responsible for making grant decisions. For community foundations, the
distribution committee is intended to be broadly representative of the
community served by the foundation.
Donee: The recipient of a grant. (Also known as the grantee or the beneficiary.)
Donor: An individual or organization that makes a grant or contribution to a donee. (Also known as the grantor.)
Employee matching grant: A contribution
to a charitable organization by an employee that is matched by a
similar contribution from his or her employer. Many corporations have
employee matching-gift programs in higher education that encourage
their employees to give
to the college or university of their choice.
Endowment: Funds intended to be invested in perpetuity to provide income for continued support of a not-for-profit organization.
Expenditure responsibility: In general,
when a private foundation makes a grant to an organization that is not
classified by the IRS as a "public charity," the foundation is required
by law to provide some assurance that the funds will be used for the
intended charitable purposes. Special reports on such grants must be
filed with the IRS. Most grantee organizations are public charities and
many foundations do not make "expenditure responsibility" grants.
Family foundation: An independent private
foundation whose funds are derived from members of a single family.
Family members often serve as officers or board members of family
foundations and have a significant role in their grantmaking decisions.
Federated giving program: A joint
fundraising effort usually administered by a nonprofit "umbrella"
organization that in turn distributes the contributed funds to several
nonprofit agencies. United Way and community chests or funds, the
United Jewish Appeal and other
religious appeals, the United Negro College Fund, and joint arts
councils are examples of federated giving programs. See also community fund.
Field offices: The Washington, D.C.,
Atlanta, Cleveland, and San Francisco reference collections operated by
the Foundation Center, all of which offer a wide variety of services
and comprehensive collections of information on foundations and grants.
Fiscal sponsorship: Affiliation with an
existing nonprofit organization for the purpose of receiving grants.
Grantseekers may either apply for federal tax-exempt status or
affiliate with a nonprofit sponsor.
501(c)(3): The section of the tax code
that defines nonprofit, charitable, tax-exempt organizations; 501(c)(3)
organizations are further defined as public charities, private
operating foundations, and private non-operating foundations. See also
operating foundation; private foundation; public charity.
Form 990-PF: The public record
information return that all private foundations are required by law to
submit annually to the Internal Revenue Service (IRS).
Form 990: The information return that public charities file with the Internal Revenue Service (IRS).
General/operating support: A grant made
to further the general purpose or work of an organization, rather than
for a specific purpose or project; also called an unrestricted grant or
General purpose foundation: An independent private foundation that awards grants in many different fields of interest. See also special purpose foundation.
Grantee financial report: A report
detailing how grant funds were used by an organization. Many corporate
grantmakers require this kind of report from grantees. A financial
report generally includes a listing of all expenditures from grant
funds as well as an overall organizational financial report covering
revenue and expenses, assets and liabilities. Some funders may require
an audited financial report.
Grassroots fundraising: Efforts to raise
money from individuals or groups from the local community on a broad
basis. Usually an organization's own constituents — people who live in
the neighborhood served or clients of the agency's services — are the
sources of these funds. Grassroots fundraising activities include
membership drives, raffles, auctions, benefits, and a range of other
Guidelines: Procedures set forth by a funder that grantseekers should follow when approaching a grantmaker.
Independent foundation: A grantmaking
organization usually classified by the IRS as a private foundation.
Independent foundations may also be known as family foundations,
general purpose foundations, special purpose foundations, or private
non-operating foundations. See also private foundation.
In-kind contribution: A contribution of
equipment, supplies, or other tangible resource, as distinguished from
a monetary grant. Some corporate contributors may also donate the use
of space or staff time as an in-kind contribution.
Letter of inquiry / Letter of intent: A
brief letter outlining an organization's activities and its request for
funding that is sent to a prospective donor in order to determine
whether it would be appropriate to submit a full grant proposal. Many
grantmakers prefer to be contacted in this way before receiving a full
Matching grant: A grant that is made to match funds provided by another donor. See also challenge grant; employee matching gift.
Operating foundation: A 501(c)(3)
organization classified by the IRS as a private foundation whose
primary purpose is to conduct research, social welfare, or other
programs determined by its governing body or establishment charter. An
operating foundation may make grants, but the amount of grants awarded
generally is small relative to the funds used for the foundation's own
programs. See also 501(c)(3).
Operating support grant: A grant to cover the regular personnel, administrative, and miscellaneous expenses of an existing program or project. See also general/operating support.
Payout requirement: The minimum amount
that private foundations are required to expend for charitable purposes
(including grants and, within certain limits, the administrative cost
of making grants). In general, a private foundation must meet or exceed
an annual payout requirement of five percent of the average market
value of its total assets.
Private foundation: A nongovernmental,
nonprofit organization with funds (usually from a single source, such
as an individual, family, or corporation) and program managed by its
own trustees or directors. Private foundations are established to
maintain or aid social, educational, religious, or other charitable
activities serving the common welfare, primarily through the making of
grants. See also 501(c)(3); public charity.
Program amount: Funds that are expended to support a particular program administered internally by a foundation or corporate giving program.
Program officer: A staff member of a
foundation who reviews grant proposals and processes applications for
the board of trustees. Only a small percentage of foundations have
Program-related investment (PRI): A loan
or other investment (as distinguished from a grant) made by a
foundation to another organization for a project related to the
foundation's philanthropic purposes and interests.
Proposal: A written application, often
accompanied by supporting documents, submitted to a foundation or
corporate giving program in requesting a grant. Most foundations and
corporations do not use printed application forms but instead require
written proposals; others
prefer preliminary letters of inquiry prior to a formal proposal.
Consult published guidelines.
Public charity: A nonprofit organization
that qualifies for tax-exempt status under section 501(c)(3) of the IRS
code. Public charities are the recipients of most foundation and
corporate grants. Some public charities also make grants. See also 501(c)(3); private
Qualifying distributions: Expenditures of
a private foundation made to satisfy its annual payout requirement.
These can include grants, reasonable administrative expenses,
set-asides, loans and program-related investments, and amounts paid to
acquire assets used directly in
carrying out tax-exempt purposes.
RFP: An acronym for Request for Proposal.
When the government issues a new contract or grant program, it sends
out RFPs to agencies that might be qualified to participate. The RFP
lists project specifications and application procedures. While an
increasing number of foundations use
RFPs in specific fields, most still prefer to consider proposals that
are initiated by applicants. For a current listing of selected RFPs,
see our RFP Bulletin.
Seed money: A grant or contribution used
to start a new project or organization. Seed grants may cover salaries
and other operating expenses of a new project.
Set-asides: Funds set aside by a
foundation for a specific purpose or project that are counted as
qualifying distributions toward the foundation's annual payout
requirement. Amounts for the project must be paid within five years of
the first set-aside.
Special purpose foundation: A private foundation that focuses its grantmaking activites in one or a few areas of interest. See also general purpose foundation.
Tax-exempt: Refers to organizations that
do not have to pay taxes such as federal or state corporate tax or
state sales tax. Individuals who make donations to such organizations
may be able to deduct these contributions from their income tax.
Technical assistance: Operational or
management assistance given to nonprofit organizations. This type of
help can include fundraising assistance, budgeting and financial
planning, program planning, legal advice, marketing, and other aids to
management. Assistance may be offered directly by the staff of a
foundation or corporation, or it may be provided in the form of a grant
to pay for the services of an outside consultant. See also in-kind contributions.
Trustee: A foundation board member or
officer who helps make decisions about how grant monies are spent.
Depending on whether the foundation has paid staff, trustees may take a
more or less active role in running its affairs.