Giving Glossary

501(C)(3)

Section of the Internal Revenue Code that designates an organization as charitable and tax-exempt.Most organizations seeking foundation or corporate contributions secure this classification from the Internal Revenue Service (IRS).

Annual Impact Report

A growing number of foundations and corporations use an annual impact report as an effective means of informing the community about projects, programs and financial data for the year. This report is published once the fiscal year is complete, i.e., an Annual Impact Report published in 2023 will detail events of 2022.

Bequest

A sum of money made available upon the donor’s death.

Bylaws

Rules governing the operation of a nonprofit corporation. Bylaws often provide the methods for the selection of directors, the creation of committees, and the conduct of meetings.

Charitable Remainder Trust

A gift plan that provides income to one or more beneficiaries for their lifetimes, a fixed term of not more than 20 years, or a combination of the two. Assets are transferred to a trust that pays income to the beneficiaries for the term of the trust. When the term ends, the remainder in the trust passes to the charity.

Community Foundation

A community foundation is a tax-exempt, nonprofit, autonomous, philanthropic institution composed primarily of permanent funds established by many separate donors for the long-term divers, charitable benefit of the residents of a defined geographic area. Community foundations provide an array of services to donors who wish to establish endowed funds without incurring the administrative and legal costs of starting independent foundations.

Designated Funds

A type of restricted fund in which the fund beneficiaries are specified by the grantors.

Donor Advised Fund

A fund held by a community foundation where the donor has specified that the fund’s income or assets be used for the benefit of one or more specific public charities. The community foundation’s governing body must have the power to redirect resources in the fund if it determines that the donor’s restriction is unnecessary, incapable of fulfillment, or inconsistent with the charitable needs of the community served.

Due Diligence

The degree of prudence that might be properly expected from a reasonable person in the circumstances; applicable to foundation personnel who act in a fiduciary capacity. (See Fiduciary Duty.)

Endowment

The principal amount of gifts and bequests that are accepted subject to a requirement that the principal be maintained intact and invested to create a source of income for a foundation.

Fiduciary Duty

The legal responsibility for investing money or acting wisely on behalf of another. Managers of charitable entities have fiduciary obligations to the charity. (See Due Diligence.)

Field of Interest Fund

A fund held by a community foundation that is used for a specific charitable purpose such as education or health research.

Fund

An entity established for the purpose of accounting for resources used for specific activities or objectives in accordance with special regulations, restrictions, or limitations. Community foundation assets are held in many named component funds established by donors or the foundation for specific or unrestricted purposes.

Giving Pattern

The overall picture of the types of projects and programs that a donor has supported historically.

Grant

An award of funds to an organization to undertake charitable activities.

Guidestar

A 501(c)(3) public charity, GuideStar lists information on every nonprofit registered with the IRS as tax exempt, as well as data on former nonprofits. GuideStar obtains the information from the nonprofits themselves, the federal government, and partners in the nonprofit sector.

Matching Gift

Add even more value to your gift! Matching Gifts provide you with an easy way to potentially double—if not triple—your original donation. Many businesses/employers supplement their employees’ contributions. In fact, your company, a spouse’s company, the company whose board you serve, or even a company you retired from may match your gift.

By simply asking your Human Resource Officer about your company’s policy, completing a simple form (online or on paper), you may be able to double—or even triple—the impact of your gift to Gilroy Foundation.

Non-Endowed Fund

A non-endowed fund can use any percentage of the fund’s balance for grantmaking and will close when the fund’s balance is eventually depleted.

Planned Giving

Any gift given for any amount and for any purpose whether for current or deferred use, that requires the assistance of the donor’s advisors to complete. In addition, it includes any gift that is carefully considered by a donor in light of estate or financial plans.

Restricted Funds

Assets or income that is restricted in its use.

Successor Election

The designation, in writing by a donor, of a person to be assigned the rights and duties associated with the donor’s account upon the donor’s death. The donor designates an individual as the successor, or the donor may choose to recommend that one or more charitable organizations receive the proceeds of any remaining funds upon the donor’s death.