I get asked this a lot. Here’s what I tell people who ask.

Start from within by putting on your list people you know that might want to make a difference through your cause. Those closest to you may share your passion for your mission. Look at Local Businesses. You need someone with business experience to help get your nonprofit up and running or just keeping it moving. Who better than a business owner to help? Get Referrals. Ask people in your inner circle if they know anyone who meets the skill set or mindset you need. You can also advertise on social media or in the newspaper to broaden your net. I have a free Find a Board Member Resource List for you.

Until Next Time,

Alesha

A

annual report: a voluntary document produced by a nonprofit to demonstrate their mission, accomplishments and financial results

articles of incorporation: a document filed with a governmental agency to create a corporation,
set forth the purposes of the corporation and establish the rights and liabilities of shareholders and directors

asset: tangible or intangible property that has exchange value

audit: a systematic financial examination of an organization by an independent body

auditor’s opinion: the auditor’s view of how fairly the financial statements represent the organization’s financial position included in the audit report

B

balance sheet: a picture of the organization’s resources at a point in time; also referred to as a statement of financial condition

bequest: a gift of personal property or cash through a will or estate plan

by-law: a rule or regulation that provides a framework for operation and management of an organization

C

capital: financial resources, such as cash, available for use

capital campaign: a fundraising plan to raise money for an endowment or capital improvement

cash flow forecast: a projection of the flow of cash receipts and disbursements

Certified Fund Raising Executive (CFRE): a credential for fundraising professionals administered by CFRE International

challenge grant: a funding agreement which stipulates that the grantee is required to raise gifts from other contributors in order to receive the challenge grant proceeds

charity watchdog: a group such as CharityWatch, Charities Review Council, or Charity Navigator which rates charities based on criteria such as efficiency and governance

collateral: a specific asset pledged by a borrower against the repayment of a loan

community foundation: a grant-making nonprofit organization established to pool the donations of many distinct donors into a collection of permanent, named funds supporting the charitable purposes of the donors in a geographically defined territory

contribution: a voluntary and unrestricted transfer of cash or other assets from one entity to another

corporate foundation: a grant-making nonprofit organization that obtains its funds primarily from one for-profit business

corporate giving program: a grant-making program established within a for-profit business

cost-reimbursement grant: a funding agreement that reimburses specified costs incurred by the nonprofit in the performance of a specific program activity

current asset: tangible and intangible property that is expected to be converted to cash within one year

current liability: a debt or obligation due within one year

D

declining grant: a multi-year funding agreement that becomes smaller each year

direct charitable expense: cost for activities that primarily benefit the charitable or public sector

direct lobbying: communicating directly with a legislator to influence the passage or rejection of a specific piece of legislation

direct public support: contributions received directly from the general public

donee: a person or organization that receives a gift

donor: a person that contributes something of value to a cause or fund

E

employee matching grant: a tax-deductible contribution made by an employee that is matched by a similar contribution from her employer

Employer Identification Number (EIN): a nine-digit number used to identify businesses, partnerships, and other entities by the IRS, commonly referred to as a Tax Identification Number

endowment: a financial asset donated to a nonprofit organization in the form of investment funds or other property intended to be kept intact and invested to create a source of income

expenditure responsibility: a set of IRS procedures to be followed by foundations when awarding grants to organizations other than 501(c)3 organizations

F

family foundation: a grant-making nonprofit organization that obtains its funds primarily
from one family

financial statements: a set of reports usually including a statement of financial position, a statement of activities, a statement of cash flows, and a statement of functional expenses

fiscal sponsor: a tax-exempt organization that legally serves as the recipient of charitable donations for another organization that has not yet been recognized as tax-exempt or does not have the infrastructure to manage funds (the sponsored organization)

fiscal year: a twelve-month period of time used for accounting purposes and calculating financial statements; also called a financial year or budget year

501 (c)(3): an IRS code that establishes a public charity or private foundation as exempt from federal income tax and whose donations are tax-deductible for the donors

fixed asset: an accounting term used for tangible property that the organization does not expect to convert into cash within one year

foundation: a nonprofit organization, supported by a donation or an endowment, that provides funds to unrelated tax-exempt organizations for educational, charitable, social, religious or other activities serving the common good

G

Generally Accepted Accounting Principles (GAAP): a common set of standards, conventions and rules followed for financial reporting

giving circle: an autonomous group of individuals that donates their money to a pooled fund and decide together where to channel their donations to achieve greater impact

going concern statement: a section in an audit report that indicates whether the audited organization will be financially viable through the next twelve months

grant: a financial award to an organization for a specified purpose

grassroots lobbying: communicating with the general public to influence opinions about a specific piece of legislation or offering a call to action with respect to that piece of legislation

I

income statement: a report that summarizes an organization’s financial transactions over a specified period of time; also referred to as a statement of activities

independent foundation: a grant-making nonprofit organization that is not closely associated with a for-profit business or family

incubator: a tax exempt organization that has as its mission to act as a fiscal sponsor for organizations that have not yet been recognized as tax-exempt

indirect public support: a contribution from the public received through campaigns conducted by federated fundraising agencies such as the United Way or through a related organization

in-kind contribution: a charitable gift of goods or services

internal controls: policies and procedures that protect the assets of an organization, create reliable financial reporting and promote compliance with laws and regulations

J

joint-funding: a grant project supported by more than one donor

L

letter of determination: a document issued by the IRS recognizing an organization’s tax-exempt status and providing its public charity classification

Letter of Inquiry (LOI): a brief request for funding sent as a preliminary step to a prospective donor to determine if there is sufficient interest to warrant submitting a full application, usually containing a statement of need, project narrative and amount requested

letter of support: a personalized communication from a stakeholder to a potential funder expressing their support of a grant application

leverage: a grant-making goal of some foundations pursued by awarding small grants with the purpose of attracting funding from other sources

liability: in accounting, an organization’s legal debts or obligations recorded on the statement of financial position

limited-purpose foundation: a grant-making organization that restricts its funding to one
area of focus

lobbying: an attempt to influence legislation

M

management letter: a written statement directed by an auditor to a board of directors that notes any material weaknesses or significant deficiencies in the financial statements

matching gift program: a contribution program that matches employees’ or directors’ donations made to qualifying organizations

material weakness: a deficiency in internal controls that may result in a misstatement in an organization’s financial statements that could not be prevented or detected

N

990 (Form): a public document required by the IRS of certain federally tax-exempt organizations that provides information on mission, programs, financial strength, etc.

990-EZ (Form): a version of Form 990 that is filed by organizations with few gross receipts and
few assets

990-N (Form): an electronic version of Form 990 filed by organizations with few gross receipts

990-PF (Form): a version of Form 990 that is required of 501(c)3 private foundations and 4947(a)(1) non-exempt charitable trusts

National Taxonomy of Exempt Entities (NTEE): a hierarchical system of nonprofit classifications

non-cash gift: a contribution of an asset other than money

O

operating foundation: a nonprofit organization that uses the majority of its resources to provide charitable services or to run charitable programs of its own

operating support grant: a funding agreement to support the general operating expenses of an entire organization such as salaries and rent

overhead: funds spent on the administration of an organization which cannot be attributed to any specific activity but are necessary to function such as rent, utilities, and insurance

P

payout requirement: the minimum amount that a private foundation is required to distribute for charitable purposes

permanently restricted asset: tangible or intangible property subject to contributor-imposed restrictions on use that can never be removed

private foundation: a nonprofit organization with funds, usually from a single source, and programs managed by its own trustees or directors

Program-Related Investment (PRI): a low- or no-interest loan from a foundation to a nonprofit for a project that supports charitable activities

program-specific audit: a systematic financial examination of an organization by an independent body of an individual program rather than the entity

program support grant: a funding agreement supporting a specific program or project

proposal: a written application submitted to a foundation requesting a grant

public charity: a nonprofit organization that provides direct and specific services to the community and receives the majority of its financial support from the public

Publication 78: a list maintained by the IRS of organizations qualified to receive tax-deductible contributions

Q

qualifying distribution: expenditures of a private foundation, such as a grants, administrative expenses, set asides, or program-related investments, that satisfies its annual payout requirement

R

restricted funds: income or assets that are designated for a specific purpose or project

restricted grant: contribution designated to a specific purpose or project

ruling year: the date on which the IRS recognized an organization’s tax-exempt status

S

Sarbanes-Oxley Act: an act passed by Congress in 2002 which imposes two provisions directly on nonprofit organizations, the prohibition of retaliatory action against whistleblowers regulations governing the destruction of important financial documents and provides best practices for other issues

seed money grant: a funding agreement intended to support an organization in its first few years

set-aside: funds designated for a specific project that are treated as a qualifying distribution in the year they are established but not in the year the funds are actually paid

significant deficiency: a weakness in internal controls that is less severe than a material weakness yet merits attention

sponsored organization: an organization that uses a fiscal sponsor to receive its charitable donations

statement of activities: a report that summarizes an organization’s financial transactions over a specified period of time, also referred to as an income statement

statement of cash flows: a report on the flow of cash receipts and disbursements

statement of financial position: a picture of the organization’s resources at a point in time; also referred to as a balance sheet

statement of functional expenses: a report of expenses by their function (such as programs, management, fundraising, etc.) and by the type of expense (such as salaries or rent), in the form
of a matrix)

supporting organization: a public charity that supports other tax-exempt organizations

T

temporarily-restricted asset: tangible or intangible property subject to contributor-imposed restrictions that expire after a certain date

third party reimbursement: payment for goods or services by a party other than the one receiving the goods or services

third sector: nonprofit segment of the economy

U

unit of service performance grant: a funding agreement based on a metric such as units of service, number of volunteers, persons served

unrelated business income: income that is not substantially related to furthering the mission
of the organization

unrestricted grant: contribution that can be used for any purpose

unrestricted asset: asset that can be used as the organization sees fit, in accordance with its
mission or purpose

V

venture philanthropy: application of the concepts and techniques of venture capital finance and business planning, goals such as high-engagement or focus on innovative programs, by a traditional foundation or group of individuals with pooled resources to philanthropy