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Nonprofit work comes with its own vocabulary. This is a plain-language glossary of the terms small nonprofits run into most — grouped by topic, with links to fuller guides where we have them.
Starting a nonprofit & tax status
- 501(c)(3) — A nonprofit the IRS recognizes as tax-exempt for charitable, religious, educational, or scientific work. Donations to it are generally tax-deductible. Learn more
- Tax-exempt — Not required to pay federal income tax on income tied to the organization's exempt purpose.
- Form 1023 / 1023-EZ — The IRS applications for 501(c)(3) status. The 1023-EZ is a shorter form for smaller, eligible orgs; everyone else files the full 1023. Learn more
- EIN — Employer Identification Number — the IRS tax ID your nonprofit needs before it applies for exempt status or opens a bank account.
- Bylaws — The internal rulebook for how your nonprofit is governed — board roles, meetings, voting, and more.
- Fiscal sponsorship — An arrangement where an existing 501(c)(3) lets a project operate under its exempt status, so the project can accept tax-deductible gifts without forming its own nonprofit.
Compliance & the IRS
- Form 990 — The annual information return most nonprofits file with the IRS. Smaller orgs may file the 990-EZ or the postcard-style 990-N.
- Charitable solicitation registration — Registration many states require before a nonprofit asks residents for donations.
- Automatic revocation — Loss of tax-exempt status the IRS triggers when an org fails to file a 990 for three years in a row.
Grants & funding
- Grant — Money given to a nonprofit for a specific purpose, usually by a foundation, government, or corporation, and not repaid.
- Types of grants — The main kinds include foundation, government, corporate, operating (general support), program/project, and matching grants. Learn more
- Letter of inquiry (LOI) — A short pitch a funder asks for before inviting a full grant proposal.
- Restricted funds — Money a donor or grant limits to a specific use, tracked separately from general operating money.
- Fund accounting — Accounting built for nonprofits that tracks money by restriction and grant, rather than as one pooled balance.
Donors & fundraising
- Donor management (CRM) — Software or a system that keeps donor records, gift history, and relationships in one place. Learn more
- Donor-advised fund (DAF) — A giving account a donor funds and then recommends grants from over time; the sponsoring organization holds the money.
- In-kind donation — A non-cash gift — goods, services, or time — rather than money.
- Matching gift — A donation an employer matches, often dollar-for-dollar, multiplying a supporter's gift.
- Donor stewardship — The ongoing work of thanking and updating donors so they give again.
Governance & board
- Board of directors — The volunteers legally responsible for governing a nonprofit and overseeing its mission and finances.
- Quorum — The minimum number of board members who must be present for a meeting's votes to count.
- Conflict of interest policy — A written rule requiring board and staff to disclose personal interests that could sway a decision.
Programs & impact
- Outputs vs. outcomes — Outputs are what you did (meals served); outcomes are the change that resulted (families food-secure). Funders care most about outcomes.
- Logic model — A one-page map linking your resources and activities to the outputs and outcomes they produce.
- Theory of change — The bigger-picture explanation of how and why your work leads to the change you seek.
- Nonprofit software — Tools built to help nonprofits run — donors, grants, volunteers, programs, and compliance — often free or discounted for charities. Learn more