Knott Foundation Glossary of Terms
Recognizing that terminology can vary from organization to organization, the Knott Foundation has compiled the following glossary of terms in the hopes of providing clarity to our grantseekers* (click here for a downloadable copy of the glossary)
Anticipated Outcomes/Expected Results:
Quantitative and qualitative outcomes that you expect to see as a result of a grant and how you engage in measuring results.
Archdiocese of Baltimore:
The Archdiocese of Baltimore (Catholic), established as a diocese in 1789, comprises the City of Baltimore and Allegany, Anne Arundel, Baltimore, Carroll, Frederick, Garrett, Harford, Howard and Washington Counties. To visit their website click here
Assets:
The amount of capital or principal - money, stocks, bonds, real estate, or other resources - controlled by an organization. Generally, for foundations or corporate giving programs, assets are invested and the resulting income is used to make grants.
Audited Financials:
Financial statements that have been reviewed, tested and verified by a Certified Public Accountant.
Capital Grant Request:
Funds provided for Equipment (such as vehicles, boilers, HVAC sytems), New Construction, Renovation and Technology.
Capital - Equipment: Funding provided for the purchasing of specific equipment such as a van, a refrigerator, furniture etc.
Capital - New Construction: Funding provided to build a new facility or construct an addition to an existing structure.
Capital - Renovation: Funding to enhance an existing structure such as, adding an ADA restroom, replacing a roof, repairing/upgrading a science lab etc.
Capital - Technology: Funding provided for the purchasing of technology related hardware or software and peripherals. This could include but is not limited to laptops, SMART boards, teaching software and servers.
Cash:
Refers to current assets comprising of currency or currency equivalents that can be accessed immediately or nearly so (as in the case of money market and checking accounts). Listed as Cash on your organization's IRS 990 Part X, Line 1 A and B. Note: You will only be entering your "Year End" amount here; the Knott Foundation's Financial Analysis Form will calculate "Beginning of Yr."
Challenge grant:
A grant that is paid only if the grantee organization is able to raise additional funds from other sources. "All or nothing " challenge grants are often used to stimulate giving from other donors, board members, etc.
Cooperative venture:
A joint effort between or among two or more grantmakers. Cooperative venture partners may share in funding responsibilities or contribute information and technical resources.
Donor:
An individual or organization that makes a grant or contribution to a donee. (Also known as the grantor.)
Endowment fund:
Comprised of funds intended to be invested in perpetuity to provide some defined measure of income for continued support of a not-for-profit organization. Normally restricted by the board or by a donor for specific uses.
Expenses:
What your organization spends. An outflow of money to another person or group to pay for an item or service, or for a category of costs. Listed as Total Expenses on your organization's IRS 990 Part I, Line 18.
Family foundation:
An independent private foundation whose funds are derived from members of a single family. Family members often serve as officers or board members of family foundations and have a significant role in their grantmaking decisions.
Fiscal sponsorship:
Affiliation with an existing nonprofit organization for the purpose of receiving grants and/or administrative assistance. Grantseekers may either apply for federal tax-exempt status or affiliate with a nonprofit sponsor. There are six levels of fiscal relationships from employer/employee to arm's length contractual.
501(c)(3):
The section of the tax code that defines nonprofit, charitable, tax-exempt organizations; 501(c)(3) organizations are further defined as public charities, private operating foundations, and private non-operating foundations.
Grassroots fundraising:
Efforts to raise money from individuals or groups from the local community on a broad basis. Usually an organization's own constituents - people who live in the neighborhood served or clients of the agency's services - are the sources of these funds. Grassroots fundraising activities include membership drives, raffles, auctions, benefits, and a range of other activities.
Guidelines:
Procedures set forth by a funder that grantseekers should follow when approaching a grantmaker.
In-kind contribution:
A contribution of services, equipment, supplies, or other tangible resources, as distinguished from a monetary grant. Some contributors may also donate the use of space or staff time as an in-kind contribution.
Income (Revenue):
What your organization earns. Includes income that an organization receives from its normal business activities, usually from grants, contracts, donations, or the sale of goods and services to customers and/or clients. Listed as Total Revenue on your organization's IRS 990 Part I, Line 12.
Interim Grant report:
A six (6) month report detailing how grant funds have been used to date. Interim reports are required for all Knott Foundation grantees. Each report becomes an important piece of each grantee's portfolio with the Foundation and is reviewed and referenced during subsequent grant requests.
IRS Form 990:
The tax return that public charities file with the Internal Revenue Service (IRS).
IRS Form 990N:
Organizations whose annual gross receipts are normally $25,000 or less must complete the 990N unless they choose to complete the 990 or 990-EZ.
Letter of Inquiry / Letter of Intent:
Step one of the Knott Foundation's grantmaking process. The Letter of Inquiry (LOI) is submitted online and serves as a brief introduction and outline relating to a request for funding. LOIs are presented to a screening committee for initial review and successful candidates are then asked to submit full proposals.
Matching grant:
A grant that is made to match funds provided by other donors; often in ratios of 1:1, 2:1 or 1:2. See also challenge grant.
Memorandum of Understanding (MoU):
A legal document outlining the terms and details of an agreement between parties, including each party's requirements and responsibilities.
Net Margin:
A measure of how well your organization controls its costs. It is calculated by dividing expenses by income and expressing the result as a percentage. Higher net margins tend to demonstrate better cost controls.
Operating Grant Request:
A grant to cover the regular personnel, administrative, and miscellaneous expenses of an organization, existing program, or project.
Operating - Capacity: A grant to cover the expansion of an existing program or the addition of a new program or personnel.
Operating - Leadership: A grant to support the leadership development of an organization, such as through training, credentialing, networking/collaboration, or professional development.
Operating - Support: A grant to cover the regular personnel, administrative, and miscellaneous expenses of an existing program or project.
Operating reserve:
A line item balance that is set aside to be used to offset possible operating losses due to unexpected revenue shortfalls or increases in operating and maintenance costs.
Payout requirement:
The minimum amount that private foundations are required to expend for charitable purposes (including grants and, within certain limits, the administrative cost of making grants). In general, a private foundation must meet or exceed an annual payout requirement of five percent of the average market value of its total assets.
Post Grant report:
A one year report detailing how grant funds were used. Post grant reports are required for all Knott Foundation grantees. Each report becomes an important piece of a grantee's portfolio with the Foundation and is reviewed and referenced during subsequent grant requests.
Program Area:
The five (5) areas of Knott Foundation grantmaking focus. They include Arts and Humanities, Catholic Activities, Education, Health Care and Human Services. Within these five areas, we accept capital and operating requests which are broken down into seven (7) specific request types:
- Capital - Equipment
- Capital - New Construction
- Capital - Renovation
- Capital - Technology
- Operating - Capacity
- Operating - Leadership
- Operating - Support
Program-related investment (PRI):
A loan or other below market rate investment (as distinguished from a grant) whose primary goal is philanthropic, not profit, made by a foundation to another organization for a project related to the foundation's philanthropic purposes and interests. The Knott Foundation uses Cash Flow Loans as PRIs.
Request Type:
The kind of support that most closely reflects your request under each of our five program areas.
See also Capital Grant Request, Operating Grant Request, Program Area
Site Visit:
A visit made by either Foundation staff and/or Trustees to a prospective grantee's offices or program site as part of our grantmaking process. Visits are designed to learn more about each particular grant request and provide a forum for questions and answers for both the Foundation and the prospective grantee.
Surplus (Deficit):
A budget surplus occurs when an organization spends less money than its income. The opposite of a budget surplus is a deficit. On the Knott Foundation's Financial Analysis Form these cells will automatically generate themselves. If this does not occur, please go back and make sure that you are working in the form in its original format. If you continue to have problems, please do not hesitate to contact our office at 410-235-7068.
Tax-exempt:
Refers to organizations that do not have to pay taxes such as federal or state corporate tax or state sales tax. Individuals who make donations to such organizations may be able to deduct these contributions from their income tax.
Total Assets:
What your organization owns. Includes current assets such as, cash and cash equivalents, inventories, accounts receivable, prepaid expenses for future services that will be used within a year, fixed assets such as property, plant and equipment, and/or financial assets such as investments.
Total Liabilities:
What your organization owes. Includes accounts payable, financial liabilities such as promissory notes and unearned revenue for services not yet provided.
Technical assistance:
Operational or management assistance given to nonprofit organizations. This type of help can include fundraising assistance, budgeting and financial planning, program planning, legal advice, marketing, and other aids to management. Assistance may be offered directly by the staff of a foundation or corporation, or it may be provided in the form of a grant to pay for the services of an outside consultant. See also in-kind contributions.
Trustee:
A foundation board member or officer who helps make decisions about how grant monies are spent. Depending on whether the foundation has paid staff, trustees may take a more or less active role in running its affairs
*General definitions have been adopted from the Foundation Center's website (Foundation Center Glossary).
For additional terminology, we suggest visiting The Johnson Center's Nonprofit Good Practice Guide Good Practice Guide Glossary