THE MODERN FUNDRAISING GLOSSARY
THE MODERN FUNDRAISING GLOSSARY
501(C) | 501(C)(3)
501(c)(3) organizations are nonprofits that exist to serve a particular mission. 501(c)(3) refers to the US Internal Revenue Code that allows these organizations a federal tax exemption. There are many 501(c) categories, but the 501(c)(3) status specifically describes religious, charitable, scientific, public safety testing, literacy, education, amateur sports, or cruelty prevention organizations.
AI FOR FUNdraising
Artificial Intelligence for fundraising is all about modern fundraising. AI for fundraising automates the most time-consuming processes that get in the way of fundraisers being fundraisers – building and cultivating lasting relationships with donors that inspire giving.
AI FUNDRAISER ENABLEMENT
Artificial Intelligence empowers fundraisers to personalize outreach, build relationships, and inspire new and increased giving at scale. In short: it makes fundraising more straightforward and more fun.
An annual gift can be a contribution made to a nonprofit or higher education institution, provided yearly (the actual donation can be made daily, weekly, monthly, etc.), typically for unrestricted purposes. In short, these gifts are contributions raised on an ongoing basis for various uses.
Auxiliary portfolios are supplementary portfolios that support a fundraiser’s work with their primary portfolios. It does not replace a fundraiser’s primary portfolio. Auxiliary portfolios help fundraisers manage donor relationships deeper in the donor pyramid and with specific segments to donors to build the overall giving pipeline.
BOARD OF DIRECTORS
A nonprofit board of directors, or nonprofit board, oversees decisions and initiatives that help drive the organization’s mission.
A capital campaign is a fundraising initiative conducted by a nonprofit organization to secure substantial philanthropic revenue. They are often used as ways to secure funding for special projects, reinforce the organization’s mission to donors, and provide nonprofits with an opportunity to connect with donors in a meaningful way that leads them to give.
A challenge gift is a gift that is contingent on the organization meeting a specific goal. For example, a challenge gift could be part of a capital campaign that can only be received if the organization raises a certain amount by a specific day.
Corporate giving is a form of philanthropy that facilitates charitable giving to nonprofits, often driven by employee giving. For-profit organizations might align corporate giving to a 501(c) organization that aligns with a mission, cause, or community the company would like to support.
A nonprofit CRM is a type of donor management software that stores donor records, correspondence, and other relevant data that can help fundraisers build relationships with supporters.
DONATION ACKNOWLEDGEMENT LETTER
Donor acknowledgment letters show an organization’s gratitude and provide donors with the critical information they’ll need come tax season. However, they are not a replacement for a personalized thank you letter. Donor acknowledgment is just one step in proper gift stewardship.
Many times during Days of Giving, nonprofits will offer donation matching as an incentive to give. Donation matching is an easy way for donors to increase their contributions to the organization. The match is usually offered as part of a pledge from a major donor.
Donors make pledges to show their affinity and commitment to causes they care about. Pledges help nonprofits secure consistent support over time from a single donor.
Donor communication is how nonprofits engage with its constituency. It is meant to convey and reinforce the mission of the organization in the hopes of inspiring continued support from donors.
Donor discovery is the process of finding non-donors or current donors who may be interested in establishing a record of giving with an organization or even increasing their gifts to an organization. Donor discovery is often used to build the future giving pipeline and turn prospects into managed donors.
A donor journey is a process in which a donor goes from showing interest in your organization to eventually becoming a first-time donor and beyond. Donor journeys help inform fundraisers what a donor’s giving habits are and how to better understand what drives them to support the organization.
Donor management is the process of systematically building and maintaining relationships to inspire giving. Fundraisers are expected to manage donors within their assigned portfolios, although donor management may involve stewarding or qualifying new donors.
The donor pyramid, or fundraising pyramid, is a visual that categorizes prospects by their engagement level. Further, it provides nonprofits a path to move donors from lower giving levels to greater commitment.
The rate at which a nonprofit sees donors continue to give in consecutive years is known as donor retention. Retaining every single donor can be very challenging, however, fundraisers can take steps to boost donor retention through personalized stewardship and clearly communicating the impact of a donor’s gift.
Segmentation by definition is division into separate parts or sections. In fundraising, when we talk about segmentation, we are talking about a process of grouping together constituents into alike categories in order to get closer to personalizing our message at scale.
Fundraiser capacity refers to the maximum amount of donors or relationships, one fundraiser can effectively manage in their portfolio at one time. For example, most fundraisers that manage major donors hold between 130-150 donors in their portfolio. Fundraiser Enablement Powered by Artificial Intelligence is changing fundraiser capacity at a scale that was never thought possible before, empowering fundraisers to maintain 3-4x more personal relationships, on average.
Fundraiser Onboarding means introducing a new fundraiser to their new portfolio and ensuring they are equipped for success. Typically, fundraiser onboarding is seen as a multi-year process that takes both time and training to generate significant giving revenue.
Fundraising appeals are a way to inspire potential donors to support a cause. An appeal should always be rooted in emotion and speak to what opportunities or value their gift can create for the organization.
Fundraising events are opportunities to get your donor base more engaged with your organization and mission while inspiring giving. Fundraising events can include golf tournaments, galas, a 5K, and many more events.
Fundraising productivity refers to the relationship between a gift officer's efficiency (inputs) and effectiveness (outputs). Gains in productivity are achieved by optimizing individual efficiency and effectiveness. Therefore, you are looking to maximize production by reducing time, cost, and effort inputs in simple terms.
A gift ask is an actual question inviting a person or company to take a specific concrete step on behalf of your organization. A gift ask is usually well-timed and well researched, because it asks a donor for a specific commitment or dollar amount.
GivingTuesday is a global generosity movement unleashing the power of radical generosity. GivingTuesday was created in 2012 as a simple idea: a day that encourages people to do good. Since then, it has grown into a year-round global movement that inspires hundreds of millions of people to give, collaborate, and celebrate generosity.
GRATEFUL PATIENT FUNDRAISING
Grateful patient programs are fundraising initiatives that allow hospitals and other healthcare organizations to find more major gift prospects among their patients. They raise money from present and former hospital patients and aim to increase gifts from past donors.
A lapsed donor is someone who had contributed to an organization in the past but not recently. Depending on the organization, that time period could be the last 12 months or as much as 3 years.
Major gifts are donations that pass a certain threshold as defined by the organization and are the most substantial financial contributions it receives. Nonprofits typically receive around 80 percent of its fundraising income from roughly 20 percent of donors as a result of these larger contributions.
Mid-level giving is a donor journey and strategy for your nonprofit's mid-tier donors. These donors give less than major donors, but they're giving more than your typical annual donor. By drawing this important donor group in more closely, you can identify who has the capacity to make a major gift.
Personalization is customizing something so that it’s specific for an individual. Just like you may tailor a gift for a good friend, fundraisers can craft communications based on what they know about prospects and donors. Personalization greatly increases the chances that your communication will be well-received and acted upon.
A planned or legacy gift is a donation that is often received at the time of death through a will. Planned giving is a complex discipline of fundraising that includes years of relationship building and stewardship.
Fundraisers maintain portfolios of donors to focus the relationships they build and giving revenue they are responsible for. A portfolio contains the donors who a fundraiser manages, and is typically comprised of 130-150 donors.
A principal gift is typically classified as a gift valued at $1 Million or more. Depending on the organization, gifts of this size could also be classified as major gifts.
A fundraising proposal must convince funders that your organization is fiscally sound, transparent, and capable of achieving the goals and objectives of the proposal. It must also tell the story in a compelling manner while persuading the donor that this project is meaningful.
Recurring giving is a regular, ongoing donation to your organization. Many donors elect to give on a recurring basis rather than a one-time gift to lessen the financial strain while still proving support to causes they believe in.
saas FOR NONPROFITS
Software as a service (SaaS) for nonprofits assists with an organization’s ability to carry out its mission. It can be as simple as website hosting software or a fundraiser enablement tool that integrates with an existing work process. Organizations often refer to the applications they use as a “tech stack.”
A nonprofit strategic plan is a formal process an organization creates to accomplish its goals and objectives for the year.
SYBUNT, which stands for “Some Years But Unfortunately Not This” year, classifies donors that have given a gift in previous fiscal years but not the current year.
Nonprofits use wealth screening to gain insights into a donor’s ability to give. This helps fundraisers focus their time and effort on cultivating relationships with donors that have a better chance of providing philanthropic support.
WHAT IS NONPROFIT FUNDRAISING?
Most nonprofit organizations look to supporters and donors to help raise the capital needed to act out their mission. This process is called fundraising. Many organizations also raise funds through grants, which can also blend into an overall business model for a 501(c)(3) organization.
Workforce expansion is the concept of enabling employees to perform at a level that multiplies the output of the organization’s workforce without making any additional hires.
Many donors will provide gifts to causes and organizations they support at the end of the calendar year. Because of this, it is a busy time of year for fundraisers to acknowledge new gifts that come in, as well as make asks to past supporters who have not yet given that calendar year.