Terminology

This introduces you to the most standard definitions and descriptions that you are likely to encounter in the grant writing process.

5% of Corpus

The minimum amount of money that foundations are legally obligated to give away each year, without being taxed.

501(c)(3)

Section of the Internal Revenue Service Code that designates an organization as charitable, tax-exempt, and nonprofit. Organizations qualifying under the code include religious, educational, charitable, amateur athletic, scientific or literary groups, organizations testing for public safety, or organizations involved in prevention of cruelty to children or animals.

990-PF

IRS form filed annually by all private foundations and used by the IRS to determine if a private foundation is complying with the Internal Revenue Code and Tax Reform Acts. The 990-PF form lists foundation assets, receipts, expenditures, compensation of officers, and grants made during the year. (The letters “PF” stand for “Private Foundation.”)

Community Foundation

Publicly supported organizations whose grantmaking body is made up of funds from many donors. Usually gives to a range of nonprofits in a particular geographic area. Board members represent the local community.

Corporate Foundation

A type of foundation that receives its income from the profit-making company whose name it bears but is legally an independent entity. Corporations may fund these foundations with a donation of permanent assets or give periodic a percentage of the company’s profits. (Also known as a company-sponsored foundation.)

Donee

The individual or organization that receives a grant.

Donor

The individual or organization that makes a grant.

Endowment

A gift or bequest that is intended to be kept permanently and invested to create income for an organization or foundation.

Family Foundation

A private foundation whose funds are derived from member(s) of a single family, and family members serve as officers or board members of the foundation and still control grantmaking decisions.

Foundation

See private foundation.

Funding Cycle

A chronological pattern of proposal review, decision making and applicant notification. Some donor organizations make grants at set intervals (quarterly, semi-annually, etc.) while others operate under a continuous cycle.

Grant

The award of funds to an organization or individual to undertake charitable or tax-exempt activities.

Grant Monitoring

The ongoing assessment of the progress of the activities funded by a donor, with the goal of determining if the terms and conditions of the grant are being met and if the objectives of the grant are likely to be achieved.

Grantee

See donee.

Grantor

See donor.

Guidelines

A statement of a donor or donee’s goals, priorities, criteria, and procedures.

Indirect Costs (overhead)

Indirect costs are commonly defined as those that are incurred for common or joint objectives, and which cannot be identified readily and specifically with a particular project (i.e., cost of utilities). Most foundations allow no or limited indirect costs.

In-kind Contribution

A donation of goods or services rather than cash.

Matching Grant

A grant or gift made with the specification that the amount donated must be matched on a one-for-one basis or some other prescribed formula.

Private Foundation

A non-governmental, 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. The funds are established to maintain or aid social educational, religious, or other charitable activities serving the common welfare, primarily through the making of grants. “Private foundation” also means an organization that is tax-exempt under Code Section 501(c)(3) and is classified by the IRS as a private foundation as defined in the code.

Program Officer

A foundation employee who typically runs a focused grants program within a foundation.

Restricted Funds

Assets or income that is restricted in its use, its eligible recipients, or its distribution procedures.

Request for Proposals (RFP)

RFPs are usually issued by foundations or corporations to solicit proposals focusing on a particular subject or problem. In many cases, RFPs are sent to a limited number of institutions.

Seed Money

A grant used to start a new project or organization.

Set-Asides

Funds set aside for future payments. If a foundation demonstrates successfully to the IRS in advance that the funds will in fact be paid within 60 months and that the project can better be accomplished by such a set-aside than by an immediate grant, the full appropriation may count in the first year.

Site Visit

When foundation representatives visit an institution to learn firsthand about the program or proposal that is being considered for funding. A site visit may also occur after a proposal has been funded, for the purpose of stewardship.

Terminal Foundation

Has a pre-set number of years to operate. All assets are distributed before the termination date.