System Terminology

Grant

Distribution

The most commonly used grant type for donor-advised, competitive and standard grants.

Grant Project

Consists of a Parent grant and a series of sub-grants.  Enables the grant to be recorded when a donor requests a specific amount to be scheduled but does not know the details of the sub-grants.

Interfund Transfer

Interfund Grant

Allows the processing of in-house transfers such as movement of money between funds established by the same donor and grant transfers as well as the movement of money away from a donor’s fund and into a fund established to support a specific charity.  

Designated Grant

Endowment Distribution

Recurring Grant

A grant established to pay one or multiple recipients based on a set financial amount to be distributed according to a defined schedule.  

Secure Grant

Utilized to ensure donor and fund confidentiality, secure grants restrict the viewing of the grant recipient name by displaying “Confidential”, unless the user has been granted specific permissions.

Challenge Grant

Matching Grant

A grant made contingent on the receipt of other monies being secured, usually within a specified time, the objective of which is to stimulate giving from other sources.

Proposal

Competitive Grant

A written application, often accompanied by supporting documents, submitted to a foundation or corporate giving program in requesting a grant. Most foundations and corporations require written proposals; others prefer preliminary letters of inquiry prior to a formal proposal.

Competitive grants come from discretionary funds and foundations evaluate Proposals to awards these funds to subsidize a wide variety of projects or programs that help address the needs of the community. Proposals and competitive grants are used interchangeably within this document.

Request for Proposal (RFP)

A foundation may create a specific grant program; it then 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.

Fund

Project (in Financial Edge)

Designation Record (in Jewish Federations)

A reserve of money set aside for a specific purpose. Gifts to foundations are deposited into Funds that are invested and managed by the foundation for making charitable grants. There are several different types of funds to help donors achieve their specific charitable goals including non-endowments, endowments, scholarships, and designated funds.

Designated Fund

The donor names one or more specified organizations as the designated beneficiary(ies) to receive the annual distributions of income.

Donor-Advised Fund

The donor or designated parties actively participate in the grantmaking process by making recommendations/ suggestions to the foundation. The donor or designated parties names organizations to be the recipient of grants from funds established by the donor or designated parties. The board has final authority to approve or disapprove the donor recommendations.

Endowed Fund

Assets given to the foundation for the purpose of establishing or adding to a permanent fund. Endowed assets are usually intended to be "in perpetuity." Generally, only a portion of the income is distributed each year. (see Corpus)

Non-Endowed Fund

These are temporary funds established with the foundation with the expectation that principal will be expended for charitable purposes within a relatively brief period. Examples include corporate funds, individual non-endowed donor-advised funds, special funds (capital campaign funds), etc., and often the foundation serves primarily in an agency capacity for administrative purposes.

Field-of-Interest Fund

A fund for which the donor specifies one or more general fields of interest to benefit from the fund distributions (i.e. to "assist the homeless," "to promote artistic expression," etc.). The foundation has full discretion to make specific grants within the general area(s) specified by the donor.

Requester

Fund Holder, Fund Advisor, or Donor

This is a person who has a relationship to the fund and usually can recommend grants from a fund to a nonprofit or to another fund.

Available Funds

Cash Available or

Spendable Income

Amount of money that can be allocated from a fund during the rest of the fiscal year

Corpus

A portion of the assets of an endowment fund that remain invested and may not be granted out.

Spending Policy

A policy that determines what percentage of an endowment fund should be spent to cover grants and operating expenditures. The foundation determines the "spending rate" at the beginning of each year, based upon considerations of the prior year's investment returns and other considerations, and sets it as a percentage of a rolling average of the prior year's balances.

Charitable Contribution

Assets given to the foundation by a donor (an individual, trust, estate, Group or organization, etc.) to carry out the foundation's charitable purpose. Normally, if possible, any non-cash contribution is immediately converted into a cash asset.

Charitable Deduction

The portion of a donor's gift to the foundation that may be deducted from the donor's income or estate taxes.

Grantee/Recipient

Individual or organization receiving a grant from the foundation.

Grant Purpose

Designation

The reason a donor or foundation will give a grant to a nonprofit.

Supporting Organization

Affiliate

Sponsored Organization

Another charitable organization that attaches itself to the community foundation to achieve public charity status, thus eliminating IRS payout requirements, excise taxes, etc. The board of the supporting organization must have a majority of its members selected by the community foundation and must meet certain other specifications.

Fiscal Sponsor

A fiscal sponsor (the preferred term) is a public charity that agrees to sponsor the charitable programs or activities of another organization or of individuals. A fiscal sponsor is legally responsible for all funds contributed to it for the sponsored project and must have complete discretion and control over the use of those funds. Fiscal sponsorship is often used by newly formed nonprofits that need to raise money during the start-up phase, before they are recognized as tax-exempt by the IRS.

Grant Committee

Distribution Committee

A standing committee of the foundation whose responsibility is to perform due diligence of all grant requests, determine their suitability for funding, and make the final recommendation to the Board of Directors for action.