A Plan of One’s Own: A Woman’s Guide to Philanthropy

This guide examines women’s roles in philanthropy and features “how to” sections on creating and using a variety of forms of charitable giving, as well as working with professional advisers.

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B Corps/Benefit Corporation

Two new hybrid forms of incorporation, available in a growing number of states, in which a for-profit corporation formally commits to meeting standards of social and environmental performance, transparency, and accountability. Similar in concept tothe  new “L3C” form of incorporation but a legally distinct form .Often categorized as a “social businesses” or “social enterprise.”

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Bequest

A method of planned giving in which money, property, or other assets are donated to a charitable organization after a person passes away. Bequests are usually included in a donor’s will or other estate plan documentation.

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Black Out: Understanding LGBTQ Advocacy and Black Communities

This webinar, part of ABFE Third Thursday Webinar Series and co-sponsored by Funders for LGBTQ Issues and The Third Wave Fund, examines how leaders and organizations connect racial and LGBTQ identity to secure social justice for LGBTQ people.

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Cause-Related Marketing/Embedded Philanthropy

When a charitable contribution or philanthropic act is built into (or “embedded” in) a commercial transaction, such as when a percentage of proceeds from sale of a product are then donated to a charitable cause or organization by the company selling the product. The company often uses the charitable aspect of the transaction to market the product or service.

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Charitable Gift Annuity

A planned giving instrument in which a donor transfers money, property, or other assets to a charitable organization and receives a partial tax deduction, and then the charity pays the donor a fixed sum at regular intervals during his or her lifetime. Upon the donor’s death, the charity keeps the remaining assets as a gift.

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Charitable Lead Trust

A planned giving instrument in which a donor transfers money, property, or other assets to a trust at the time of their death, and the trust then pays out a fixed amount to a charitable organization for a set number of years. After this time, the remaining assets in the trust are transfered to the donor’s heirs or other beneficiaries.

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Charitable Remainder Trust

A planned giving instrument in which a donor transfers money, property, or other assets to a charitable organization and receives a partial tax deduction, and then the charity pays the donor a fixed sum at regular intervals during his or her lifetime. Upon the donor’s death, the charity keeps the remaining assets as a gift.

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Community Foundation

A grantmaking institution with a broad charitable mission, almost always tied to a specific geographic area. Legally categorized as a public charity rather than a private foundation, a community foundation meets the public support test by raising donations from individuals or institutions. It then make grants or other philanthropic investments in the community, under the guidance of a board that is representative of the community. Community foundations offer different methods of giving to donors, including donor-advised funds, gifts to the foundation’s permanent endowment, various planned giving options, or other earmarked gifts or special funds.

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Corporate Foundation

A philanthropic entity funded by contributions from a corporate entity, but established as a legally distinct entity. Almost always organized legally as a private foundation focused primarily on grantmaking, but can be a public charity or operating foundation. Contributions from the corporate entity are often made at regular intervals and so corporate foundations usually have smaller permanent endowments than other foundations. While legally distinct from the corporation’s internal giving or social responsibility program, the corporate foundation very often maintains close ties to the corporation beyond simply financial ones. The foundation often gives in geographic areas in which the corporation operates, Read more

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Corporate Giving/Corporate Social Responsibility

Philanthropic contributions made by corporations, using the same methods as individuals (e.g. giving money/grants, time/talent, in-kind products or services, and more). Corporations can give as a corporate entity and/or through a corporate foundation set up as a separate legal entity. “CSR” refers to the general commitment of a corporation to social benefit, including its corporate giving.

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Crowdfunding

A method of raising money for an initiative or organization – often one in the initial or “start-up” phase – from two or more people contributing to the fundraising goal, usually through an online platform.

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Crowdfunding

A method of raising money for an initiative or organization – often one in the initial or “start-up” phase – from two or more people contributing to the fundraising goal, usually through an online platform.

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Donor-Advised Fund

A fund established – with an initial gift and perhaps subsequent gifts from one or more donors – at a nonprofit public charity which then (for a fee) invests the money and manages the process of making grants from the fund as advised by the donor(s). The most common sponsors of DAFs are community foundations, charitable arms of for-profit financial institutions, and certain national host organizations. DAFs are not subject to the same legal rules at private foundations and are considered gifts to the public charity managing the fund even if the money is then re-granted as “advised” by the Read more

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Donor-Advised Fund

A fund established – with an initial gift and perhaps subsequent gifts from one or more donors – at a nonprofit public charity which then (for a fee) invests the money and manages the process of making grants from the fund as advised by the donor(s). The most common sponsors of DAFs are community foundations, charitable arms of for-profit financial institutions, and certain national host organizations. DAFs are not subject to the same legal rules at private foundations and are considered gifts to the public charity managing the fund even if the money is then re-granted as “advised” by the Read more

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Family Foundation

While there is no legal nor widely accepted definition of what qualifies as a “family” foundation, the term is usually applied to a class of independent, non-operating private foundations in which: the mission and giving continues to be strongly influenced by the intent of the founding donor(s), the founding donor(s) or familial descendants play some governance role in the foundation (e.g., as trustees or even staff), and the assets come from a founding family or individual. However, some public foundations, operating foundations, and other types have these qualities as well so can be considered family foundations. Many independent foundations began Read more

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Foundation Board Basics

A grantmaking foundation is a charitable tax-exempt organization whose primary function is to distribute funds for charitable purposes. Private foundations are typically formed by individuals, families, or corporations. Regardless of whose generosity is benefiting worthy causes, a foundation needs a governing board (or a board of trustees as foundation board members often are called) because it is structured as a tax-exempt organization. In principle, the role of the foundation board does not differ from that of other nonprofit boards, but foundation boards have specific challenges.

Categories: Governance, Resources

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Giving Circle/Pooled Fund

A method of giving in which a group of people combine their contributions into a single joint gift or on-going pooled fund. While there are many specific variations in form and process, most giving circles or pooled funds involve some sort of group decision-making about the target and recipients of the joint gift(s).

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Giving Money – Offline, Online, Mobile

Giving money to a charitable organization or cause using offline or online means, or mobile technology. Offline means include checkwriting and direct cash donations as well as formal grantmaking by institutions. Online means include giving through a charity’s direct website, social media, a giving portal or other online giving platform, or a crowdfunding site. Mobile giving uses technology such as text messaging and mobile “apps.” The different methods have different advantages and disadvantages – e.g., the level of convenience, information, fees and restrictions, etc. – and so appeal to different donors or those in particular circumstances. Whether a donor can Read more

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Grantmaking

A formalized process of giving money, usually through a private foundation or grantmaking public charity. Grants are usually distinguished from other gifts of money by the formal application and reporting requirements, the specific purposes for which grant funds may be used, a bounded time period for grant funds to be used, and the more explicit strategy used to guide grantmaking decisions.

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Health Conversion/Health Legacy Foundation

A type of private foundation created when a nonprofit hospital or health/insurance organization is sold and converted to a for-profit enterprise. Federal law requires that the proceeds from such a sale must go to a charitable purpose, so often these proceeds are used to create a new endowed grantmaking foundation. Health conversion or health legacy foundations usually have health as their primary grantmaking focus, and often give to health causes in the geographic region formerly served by the nonprofit that was sold. Note, however, that these foundations are not legally a separate type or regulatory category.

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Impact Investing

A general term for a number of methods for making socially responsible financial investments. Impact investments seek to generate multiple forms of value, to create positive social and/or environmental returns or impacts in addition to financial returns. Also called “social investing” and encompassing “mission-related investing” (MRI), “program-related investing” (PRI), and other emerging methods. Investments can be made by individuals, organizations, or collectives using a variety of investment vehicles. Impact investment seeks to encourage socially responsible business practices, disinvest in businesses that contribute to social or environmental harm, and provide seed or low-interest loan capital to socially-responsible business ventures. Can also Read more

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In-Kind Giving

Donations of goods or services of any kind – e.g., clothing, “toys for tots,” free advertising space – except money or appreciated property like real estate. Sometimes meant to include gifts of time, talent, and expertise.

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Independent, Non-Operating Foundation

A type of private foundation – with assets usually derived from a single source – that has grantmaking or other philanthropic investment as its primary focus, rather than operating programs, but that cannot be classified under other types of private foundations such as corporate, family, or health conversion. Many independent foundations were once family foundations but transitioned away from direct family influence or involvement at some point.

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L3C

Short for “Low-profit, Limited Liability Company.” A new hybrid form of incorporation, available in a growing number of states, in which a for-profit venture has a stated goal of maximizing social benefits instead of profits. Designed specifically to allow and attract multiple sources of capital for the socially-oriented business, including program-related investments from foundations. Similar in concept to the new B Corps/Benefit Corporations form of incorporation but a legally distinct form. Often categorized as a “social businesses” or “social enterprise.” A set of methods for providing financial capital, credit, and banking services to entrepreneurs, small businesses, and low-income individuals who Read more

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Microfinance

A set of methods for providing financial capital, credit, and banking services to entrepreneurs, small businesses, and low-income individuals who otherwise lack adequate access to such capital and services. Can include loans, savings, “microcredit,” or other banking services and typically involves relatively small amounts of money. The transactions are often processed through online and/or local intermediaries, including specialized microfinance institutions.

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Mission-Related Investing

A type of – or sometimes alternate general term for – impact investing. MRI is most commonly used to refer to socially responsible financial investment practices used by foundations or other endowed entities, in which endowment funds are invested in ways that support the mission and values of the organization.

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Operating Foundation

A type of private foundation – with assets usually derived from a single source – that uses the majority of its assets to operate charitable programs or provide services, rather than to make grants or other philanthropic investments. Operating private foundations must follow the general IRS regulations for private foundations, but are treated and classified as a distinct legal category, separate from non-operating foundations. Most operating foundations have an endowment, and some make a limited number of grants alongside operating their programs.

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Planned Giving

General term for a variety of methods of giving used in financial or estate planning, in which part or all of the donation is deferred to a later date, usually the death of the donor. Often allows donors to make larger gift commitments than they could otherwise.

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Private Foundation

A tax-exempt entity legally defined under section 501(c)3 of the Internal Revenue Code, distinguished from “public charity” entities covered in that same section. Private foundations usually get their funds from a single primary source such as an individual, family, or corporation. The category is further divided by the IRS into “operating” and “non-operating” foundations, with the majority of foundations being the latter (including corporate, family, health conversion, and independent foundations) and pursuing their charitable missions primarily through grantmaking or other philanthropic investments. Many private foundations keep funds in an endowment, though some are “pass through” entities, and they can be Read more

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Program-Related Investing

A type of impact investing in which a grantmaking institution provides capital in the form of low-interest loans, loan guarantees, or related financing methods that involve some form of repayment. PRI financing is provided to charitable organizations as well as other types such as L3Cs and socially responsible businesses. PRIs are meant to further the mission of the grantmaking institution using means beyond traditional grants, andthey count toward the annual payout requirement (5% of endowed assets) for private foundations.

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Public Charity

A tax-exempt entity legally defined under section 501(c)3 of the Internal Revenue Code, distinguished from “private foundaton” entities covered in that same section. Public charities derive their funding primarily from the general public, through fees for service or products, contracts, and gifts and grants. Some public charities make grants or other philanthropic contributions such as scholarships (e.g., community foundations, public foundations), but most are focused on advancing their philanthropic missions through a variety of charitable services and activities.The IRS further subclassifies a number of types of public charities, including supporting organizations.

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Public Foundation/Grantmaking Public Charity

A type of public charity that has grantmaking (e.g., for medical research or scholarships) as its primary activity. While these institutions make grants like private foundations, they are classified as public charities and meet the public support test by raising the money they use for grantmaking from multiple public sources, including individuals, corporations, private foundations, contracts and fees, etc. Even though they raise new money from the public on a regular basis, public foundations can also have some endowment.

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Social Enterprise/Social Business

A commercial entity that uses business practices and provides products or services that generate revenue in the marketplace, but does so in order to advance a social or charitable mission. Related to the idea of “corporate social responsibility,” but in social enterprises and social businesses the social mission is top priority and all aspects of the business – the nature of its products and services, hiring and personnel policies, environmental practices, etc. – align with that philanthropic mission. B Corps/Benefit Corporations, and L3Cs, are usually considered social businesses.

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Social Impact Bond

A new, performance-based investment mechanism bringing together government, service providers, and investors in a contractual relationship to provide the captial needed to achieve some desired social outcome. Also known as “pay-for-success” bonds. Investors provide funding, often through a coordinating intermediary, to a service provider such as a nonprofit organization. If the provider achieves certain outcomes goals and measurable results, then the government pays financial returns to the investors based on the cost-savings the government realizes because of this success.

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Supporting Organization/Supporting Foundation

A subcategory of public charity defined in the Internal Revenue Code and subject to certain special requirements and restrictions. A supporting organizaton exists to benefit, or to perform functions for or of, one or more other public charities. A supporting organization has a very close relationship with another public charity in operations and control. While there are many variations under this IRS category, and while supporting organizations are technically public charities, they often have “foundation” in their name, such as university foundations or hospital foundations that exist to raise money and provide assistance to those institutions and are influenced by Read more

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Volunteering/Giving Time

Giving time to a charitable cause or organization without receiving financial remuneration. Often refered to as “service” or expanded to include giving talent, energy, expertise, etc. Often combined with other forms of giving, but can be the sole method of donating. [gravity forms id=”5″ update]

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