I work with a lot of people who are new to the nonprofit field. Some have decided to transition from working in the for-profit world to have more purpose in their work. Others have identified a problem, created a unique solution and started an organization to help make our world a better place. Still others are at a place in their lives where they are ready to start giving back to their community and are stepping into their first board governance role.
Through working with these “newbies” I often get asked about different terminology. Words or phases that don’t quite make sense to them. Or they believe them to mean something different. It was out of one of those conversations that came the idea to write an article that is really a glossary of terms.
Working or volunteering in the nonprofit sector can be a rewarding experience, but it can also be challenging to navigate the unique language and culture of these organizations. Understanding the terms and titles used in the nonprofit sector is essential to effective communication. Below are some of the most common terms and titles used in the nonprofit sector.
- Nonprofit Business – An organization that operates for the benefit of the public, rather than to generate profit for its owners.
- 501(c)(3) – A tax-exempt status granted by the IRS to nonprofit organizations that meet certain criteria, such as being organized and operated for charitable, educational, religious, scientific, or literary purposes.
- Agency, Organization, Nonprofit or Charity – There are terms that refer to a nonprofit business.
- Mission Statement – A statement that defines the purpose and goals of a nonprofit organization.
- Executive Director (ED) or CEO – In an organization with paid staff, this is usually the top staff person and chief spokesperson of a nonprofit organization. These terms are not generally used in smaller, all-volunteer nonprofits.
- Program Director (or Manager, or Coordinator) – Whether an organization has paid staff or not, this refers to the individual(s) responsible for overseeing programs or services offered. It’s usually a paid position, but there are many examples of volunteer program positions.
- Development Director – Usually a paid position, this role is responsible for managing fundraising and financial development activities of a nonprofit organization.
- Fundraising – The process of soliciting and collecting donations from individuals, corporations, and other sources to support a nonprofit organization’s mission, programs and services.
- Philanthropy – The origin of the word philanthropy is Greek and means love for mankind. Today, philanthropy includes the concept of voluntary giving by an individual or group to promote the common good. The giving can include time, talent, and treasure.
- Donors – Individuals, foundations, or corporations providing funding to a nonprofit.
- Grant – A financial award provided to a nonprofit organization by a foundation, corporation, or government agency to support a specific project or program.
- Letter of Intent – A donor’s letter or brief statement indicating intention to make a specific gift.
- Charitable Giving – The act of donating money or assets to a nonprofit organization for philanthropic purposes.
- In-kind Donation – A non-monetary donation of goods or services to a nonprofit organization, such as donated office space or pro-bono consulting services.
- Endowment – A pool of funds that are invested to generate income for a nonprofit organization over the long term.
- Annual Campaign – Fundraising efforts that go to the annual operations of an organization. Sometimes called a Sustaining Campaign.
- Capital Campaign – A fundraising campaign intended to fund a large project, often a building or other physical structures.
- Bricks and Mortar – An informal term indicating grants for buildings or construction projects.
- Donor Stewardship – The practice of cultivating relationships with donors to build trust, engage them in the organization’s mission, and ensure their ongoing support.
- Volunteer – An individual who donates their time, skills and knowledge to assist a nonprofit organization.
- Board of Directors – The governing body of a nonprofit organization, responsible for overseeing the organization’s management and making strategic decisions. Every nonprofit organization is required by law to have a Board of Directors.
- Board Members – These are volunteer governance leaders of a nonprofit. As a group they are responsible for making strategic decisions and providing oversight.
- ByLaws – This is a document that spells out how the Board of Directors and the organization will function.
- Board Development – The practice of developing and implementing strategies to recruit, train, and retain volunteers for a nonprofit organization.
- Articles of Incorporation – A legal document filed with the secretary of state to create a nonprofit corporation. This process is called incorporating. In some states, they are called a Certificate of Incorporation or Corporate Charter.
- 990 – An IRS form filed annually by nonprofit organizations.
- Constituents or Clients – These words refer to those who are served by or who benefit from the work of the nonprofit. They usually refer to people, but it could include animals, groups or other entities.
- Stakeholders – Individuals or groups who have a vested interest in the organization. These could include partners, donors, volunteers, clients, staff and community members. An agency’s stakeholders are usually defined by the nonprofit.
- Audience – This refers to the people that an organization is trying to reach with their messaging. It could be potential donors or volunteers, the entire community, or a specific demographic.
- Advocacy – The act of developing and implementing strategies to advance a nonprofit organization’s mission and goals. Advocacy can also represent a cause served by many different nonprofit organizations.
- Social enterprise – A social enterprise is a business with social objectives. Maximizing profits is not the primary goal of a social enterprise as is with a traditional for-profit business. And unlike a nonprofit, social enterprises pursue endeavors that generate revenues, which fund their social causes.
- Impact – Measurement of the value and effectiveness of a nonprofit organization’s programs and services to the community.
- Annual report – A document that provides information about a nonprofit organization’s activities, financial performance, and accomplishments during a given year.
- Capacity building – The process of strengthening a nonprofit organization’s infrastructure, systems, and processes to improve its effectiveness and sustainability.
Wow! This list is so long!!! I could have gone on and on, but I think this is enough for now. If you’re new to nonprofits or just thinking about getting involved, I hope this guide provides a helpful introduction to some of the most common terms and titles used in the sector. Please share with anyone who you think will appreciate the insight.
Kim is a mom, lover of being active and the outdoors,
and helper of nonprofit leaders.