WHAT DOES THAT MEAN?
You know the feeling: you’re in the middle of a big meeting and suddenly the acronyms start flying. You scribble furiously to write them down to the best of your ability:
Note to self: what’s a lie-bunt?
C-R-M? Lookup later!
Especially if you’re new to nonprofit fundraising, there’s a ton of jargon out there! So we’ve put together a list of must-know fundraising terms to prepare you for your next fundraising conversation. Not only will your meetings be more productive but you’ll also know the terminology to take your fundraising efforts to the next level.
33 fundraising terms to know (before you need them)
| Term | Definition | |
|---|---|---|
| 1. | Advancement | Advancement is a discipline within education similar to development and fundraising. It encompasses alumni relations, communications, development, marketing and is an integrated method of managing relationships to encourage philanthropy. |
| 2. | Appeal | A fundraising or donation appeal asks supporters to contribute money to your cause. Typically, the ask is part of a fundraising campaign. It can be delivered via letter, email, social media, or online campaign page - or a combination of these methods. |
| 3. | Call-to-Action | Written as a command, a Call-to-Action tells your supporters the specific action you want them to take. An effective CTA is key to a successful fundraising or engagement campaign. Examples include "Donate Now" or "Sign our Petition." |
| 4. | Capital Campaign | An effort over a set period of time to raise a particular amount of money to acquire or improve a physical asset. Most common is a "bricks and mortar" campaign to purchase, build, or renovate a building. |
| 5. | CFRE | CFRE stands for Certified Fund Raising Executive. It's an internationally recognized certification for fundraising professionals. Individuals with this certification have demonstrated their mastery of core knowledge and skills required of fundraising executives after five years of experience. |
| 6. | CRM/Database | CRM is short for Constituent Relationship Management. A CRM is software that allows you to record, track, and report on information about your relationships with supporters. Sometimes it’s also referred to as a database or called donor management software. |
| 7. | Crowdfunding | Raising funding for a project or venture by soliciting many small donations from a large number of people, generally online. |
| 8. | Donor Advised Fund (DAF) | A Donor Advised Fund is like a charitable investment account: a donor contributes to this account over time for an immediate tax benefit and then recommends grants to their favorite charity when they are ready. |
| 9. | EIN | Your Employer Identification Number (EIN)is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to business entities, including nonprofits, operating in the U.S. for the purposes of identification. It can also be called a Tax ID Number. |
| 10. | Endowment | An investment fund established by a foundation or nonprofit that makes consistent withdrawals from the invested capital. The principal investment amount is generally kept intact and grows over time, while the investment income is used as a revenue stream to support programs and operations. Building an endowment can be key to long-term sustainability. |
| 11. | Fair Market Value (FMV) | In the simplest sense, fair market value (FMV) is the price that property would sell for on the open market. It is an estimate of the value of an item and, if your nonprofit is selling items or event tickets to raise money, should be subtracted from the total donation amount to determine the tax-deductible amount ($). |
| 12. | #GivingTuesday | Celebrated on the Tuesday following Thanksgiving (in the U.S.) and the widely recognized shopping events Black Friday and Cyber Monday, #GivingTuesday is an online giving day that kicks off the charitable season. |
| 13. | In-Kind Gifts | In-kind gifts, also called gifts-in-kind or non-cash contributions, are donations of tangible goods to a charitable organization. You'll want to thank your donors for in-kind gifts, but by law, your nonprofit cannot assign the gift a dollar value. |
| 14. | Lapsed Donors | Donors who gave last year or earlier but have not given this year. This group deserves special attention because it's more cost-effective to retain donors than it is to acquire new ones. |
| 15. | LYBUNT | LYBUNT is a term used to refer to donors who contributed Last Year But Unfortunately Not This. These folks are also called lapsed donors. |
| 16. | Major Gifts | These are often the largest single gifts that your organization receives. There is no set dollar amount for a major gift; it might be $1,000 or $100,000 depending on the average amount for individual contributions to your nonprofit. |
| 17. | Matching Grant | A matching grant, sometimes called challenge funds, requires the recipient to raise an equal amount of money in order to receive the offer amount. |
| 18. | Merchant Account | In order to accept credit (and debit) cards for payment, organizations need to have a merchant account. A merchant account is just like a bank account - your organization's holding tank for your payments that you receive online. |
| 19. | NGO | Stands for Non-Governmental Organization. As the name suggests, NGOs operate independently of any government. While they are mainly government funded, they operate without government oversight or representation from that government. NGOs are a subset of NPOs. |
| 20. | NPO | Short for Nonprofit Organization. An NPO (or nonprofit) is a private organization offering a public service. |
| 21. | Peer-to-Peer (P2P) | Peer-to-Peer (or P2P) Fundraising is a type of online fundraising campaign. Individuals create personal fundraising pages and solicit donations on behalf of your organization from their friends, family, and extended personal networks. |
| 22. | Planned (or Legacy) Gift | A planned gift (or legacy gift) is a significant charitable gift that is arranged in the present and allocated at a future date, generally through a will or trust. The process of making these arrangements is called planned or legacy giving. |
| 23. | Principal Gift | Commonly defined as being $1 million or more and donated with stewardship from savvy experts. Often these gifts are given as appreciated assets, such as stock purchased at a lower value that has become more valuable over time. The donor receives a tax write-off for the appreciated amount. |
| 24. | Recurring Donation | A Recurring donation, or recurring gift, is an ongoing, specific gift amount determined by a donor that is charged monthly to a donor's credit card. |
| 25. | Restricted Gift | A donation made with the stipulation that it be used for a particular purpose or program. Empowers donors to feel secure that their gifts will be used as they envision. |
| 26. | ROI | Return on Investment is a way to evaluate efficiency, expressed as a percentage. For nonprofits, your investment is the dollar value of time and resources to achieve an outcome. Enables you to determine whether the initial investment is reasonable for the final outcome. The formula for calculating ROI is (Benefit-Cost)/Cost * 100. |
| 27. | Segmentation | Sementation is the process of dividing your supporters into groups based on shared characteristics and past engagement. These groups then receive more personally tailored outreach and fundraising appeals during your campaign. Learn more. |
| 28. | Soft Credit | A soft credit is a credit for a donation that a contact or donor did not actually make, but may have somehow influenced. |
| 29. | SYBUNT | Some Years But Unfortunately Not This. Describes donors who have contributed to your organization in the past but not within the previous year. Like LYBUNTs, they are considered Lapsed Donors. |
| 30. | Tax-Deductible Amount | Cash contributions to a registered 501 (c)(3) nonprofit are 100% tax-deductible. However, if you sell an item (such as an event ticket), the Fair Market Value of that item must be subtracted from the full payment amount. The remainder is the tax-deductible amount for the contribution. |
| 31. | Third Sector | Another name for the nonprofit sector. Also called the civic or social sector of the economy, the term distinguishes nonprofits from public or private sector enterprise. |
| 32. | Transaction Fee | A transaction fee is an expense a business or nonprofit must pay to process each electronic payment they receive. Transaction fees vary across service providers, costing up to 5.0% of the full transaction amount plus $0.20 to $0.35 per transaction. |
| 33. | Unrestricted Gift | A gift made by a donor with no limitations on how the gift is to be used. Nonprofits can generally use these gifts towards any purpose. |
TEST YOUR KNOWLEDGE: Vocab flashcards
This list is by no means definitive! Let us know in the comments if there are words you’d like us to add.
DreamorDonate
August 25, 2020Brilliant article, these are beyond essential terms and I’ll be sharing them with the team. Thank you!
Olivia Tsui
August 25, 2020Thanks. Yes, there’s certainly a lot to know, and we’re so glad this could be of use to you and your team!
Nazrul Islam Bhuiyan
June 13, 2022Very nice articles.
It was helpful as we try to help a small boy get back to his normal life.
The Catalyst
February 3, 2023A useful article on fundraising terms! Fundraising is an essential part of running a nonprofit organization, but it can be difficult to understand all the terms and concepts involved. The information provided in this article is a valuable resource for anyone looking to learn more about fundraising. From “donor acquisition” to “stewardship,” this article provides a comprehensive overview of 33 important fundraising terms. I appreciate the clear and concise definitions provided and am sure that it will be a valuable resource for anyone involved in nonprofit fundraising. Thanks for sharing!