Glossary

Bargain Sale
A transfer of property to a charity for less than fair market value. The donor receives a partial tax deduction and may realize partial capital gain. Frequently used with real estate.

Bequest
A gift made through a will or living trust. It is revocable during life and realized only at death. Bequests remain the most common form of planned gift.

Blended Gift
A structure combining current and deferred giving. A common example is a cash gift paired with a bequest intention. Blended gifts increase immediate impact while securing future revenue.

Capital Gains Tax Avoidance
The strategic elimination or reduction of capital gains through charitable giving. Donating appreciated assets is the most common method. It significantly increases net philanthropic impact.

Case for Support
The foundational message explaining why the organization deserves philanthropic investment. It articulates need, urgency, and outcomes. All solicitations flow from the case.

Charitable Gift Annuity (CGA)
A contract between donor and charity providing fixed lifetime income in exchange for a gift. Rates are typically based on recommended actuarial tables. A portion of payments may be tax-free.

Charitable Lead Trust (CLT)
A trust that pays income to charity for a period before passing remaining assets to heirs. It is often used for estate- and gift-tax reduction in wealth-transfer planning. CLTs work best in low-interest-rate environments.

Charitable Remainder Trust (CRT)
An irrevocable trust that pays income to non-charitable beneficiaries before passing the remainder to charity. It provides an upfront charitable deduction, capital-gains deferral, and lifetime income. Variants include CRUTs and CRATs.

Closing
The moment the donor commits to the gift. It may involve final questions, paperwork, or structuring. Closing is a skill distinct from asking.

Commutation Clause
A provision allowing early termination of a split-interest trust in limited circumstances. It requires careful drafting and charity consent. Improper use can jeopardize tax benefits.

Cultivation
The intentional relationship-building phase before the ask. It aligns donor values with organizational mission. Cultivation is where trust and emotional commitment are formed.

Discovery Visit
A conversation designed to uncover donor motivations and capacity. It is not a solicitation. Discovery guides future ask strategy.

Donor-Advised Fund (DAF)
A charitable account that allows donors to claim an immediate tax deduction while recommending grants over time. The sponsoring charity retains legal control. DAFs often serve as gateways into more complex planned gifts.

Donor Qualification
The process of confirming a prospect’s capacity, inclination, and connection to the organization. Qualification prevents wasted solicitation effort. It typically precedes any major gift ask.

Downgrade
A decrease in gift size. It often signals financial stress, disengagement, or dissatisfaction. Downgrades require rapid re-engagement strategy.

Endowment
A permanently restricted fund where only earnings are spent. The principal is preserved in perpetuity. Endowments support long-term financial sustainability.

Engagement
Any interaction that deepens the donor’s connection to the mission. Engagement includes tours, impact reports, volunteerism, and leadership invitations. High engagement predicts major-gift readiness.

Fair Market Value (FMV)
The price an asset would sell for between willing buyers and sellers. FMV determines the deductible portion of most non-cash gifts. Accurate valuation is essential for compliance.

Fiduciary Duty
The legal obligation to act solely in another party’s best interest. Trustees, executors, and board members operate under fiduciary duty. Breach can result in personal liability.

Follow-Up
Post-ask communication to advance a pending decision. Follow-up prevents stalled asks from dying silently. Most major gifts close only after multiple follow-ups.

Generation-Skipping Transfer (GST) Tax
A federal tax imposed on transfers to beneficiaries two or more generations below the donor. CRTs and dynasty-style gifts must be carefully structured to avoid exposure. GST tax planning is critical in multigenerational philanthropy.

Gift Acceptance Policy
A formal document defining what types of assets an organization will accept. It governs risk, compliance, and administrative authority. It is essential for complex asset gifts.

Gift Agreement
A legally binding document detailing gift intent, use, and restrictions. It protects both donor and organization. All complex gifts should be governed by agreements.

Hard Ask
A direct request for a specific amount. It requires decision-level authority from the donor. All major gifts ultimately require a hard ask to close.

Impact Reporting
Documentation showing how donor funds were used. Reports may include metrics, stories, and outcomes. Strong reporting increases donor trust and upgrade rates.

Intent to Give
A documented or verbal expression of a donor’s future giving plans. It is not legally binding unless formalized. It is foundational for legacy pipeline forecasting.

Irrevocable Gift
A gift that cannot be changed, reclaimed, or revoked once completed. Many planned gifts fall into this category. These gifts require heightened donor education and legal clarity.

Irrevocable Trust
A trust that generally cannot be modified after creation. It removes assets from the taxable estate. Many planned-giving vehicles rely on irrevocable trust structures.

Leadership Gift
A major early commitment that sets campaign pace and credibility. It is used to leverage peer participation. Campaigns rarely succeed without visible leadership gifts.

Life-Income Gift
A charitable gift that provides income to the donor or another beneficiary for life. Examples include charitable gift annuities and charitable remainder trusts. These gifts blend philanthropy with retirement planning.

Lifetime Value (LTV)
The total projected giving of a donor across their relationship with the organization. LTV drives investment decisions in development staffing and marketing. Planned gifts dramatically expand LTV.

Moves Management
A structured system that tracks relationship steps from identification through solicitation and stewardship. Each “move” is a purposeful donor interaction. It ensures no prospect stagnates.

Peer Solicitation
An ask made by someone in the donor’s social, professional, or philanthropic circle. Peer credibility increases giving confidence. This is especially powerful in major and campaign gifts.

Pledge
A legally or morally binding multi-year gift commitment. Pledges stabilize campaign cash flow. They require systematic tracking and reminders.

Pledge Fulfillment
The actual payment of pledged amounts. It is a stewardship and finance function. Weak fulfillment systems lead to significant revenue loss.

Portfolio
The assigned group of prospects managed by a gift officer. Portfolios are balanced by gift capacity and lifecycle stage. Active management is required for revenue performance.

Present Value of Remainder Interest
The actuarially calculated value of the charitable portion of a split-interest gift. It determines the allowable income-tax deduction. This value fluctuates with age and federal interest rates.

Private Foundation
A charitable entity typically funded by a single family or corporation. It is subject to strict payout, excise, and self-dealing rules. Foundations often complement major planned-giving strategies.

Probate
The court-supervised process of distributing estate assets. Probate is often public, slow, and expensive. Many donors use trusts and beneficiary designations to avoid it.

Proposal
A written or formal presentation outlining the gift opportunity. It includes purpose, impact, amount, recognition, and tax considerations. Proposals formalize verbal asks.

Prospect Research
Systematic analysis of a donor’s wealth indicators, giving history, and affiliations. It informs ask strategy and gift capacity. Ethical and privacy standards strictly apply.

Qualified Charitable Distribution (QCD)
A direct transfer from an IRA to a qualified charity for donors age 70½ or older. The distribution is excluded from taxable income while satisfying required minimum distributions. It is one of the most tax-efficient giving tools for retirees.

Qualification Visit
A specific meeting to confirm donor readiness for major-gift cultivation. It answers “should we invest significant time here?” It prevents misallocation of resources.

Readiness
The point at which a donor is prepared for a financial request. It is assessed through engagement, responsiveness, and expressed intent. Asking too early reduces success rates.

Reactivation
The return of a lapsed donor to giving status. Reactivation costs more than retention. Legacy intent often originates from reactivated donors.

Restricted Gift
A donation limited by the donor to a specific purpose or program. Legal compliance with restrictions is mandatory. Violating restrictions can trigger donor litigation or regulatory action.

Retention Rate
The percentage of donors who give again year-over-year. High retention is the strongest indicator of long-term revenue growth. Most U.S. nonprofits retain under 50%.

Retained Life Estate
A gift in which the donor transfers ownership of a residence to charity but retains lifetime use. The donor receives a current charitable deduction. The property passes automatically to the charity at death.

Revocable Trust
A trust that can be altered or terminated during life. It avoids probate but offers no tax shelter during life. It becomes irrevocable at death.

Self-Dealing
A prohibited financial transaction between a charity and an insider. It can trigger severe penalty taxes. This rule is central to foundation and trust administration.

Silent Phase
The early stage of a capital campaign when leadership and major gifts are secured privately. Public launch does not occur until a substantial percentage is committed. This phase determines ultimate campaign success.

Solicitation Strategy
The customized plan for making the ask. It includes timing, solicitor roles, amount, naming opportunity, and contingencies. Strategy directly influences closing probability.

Solicitor
The individual who formally presents the ask. This may be a development officer, CEO, board member, or peer. The best solicitor is whoever holds the strongest donor relationship.

Soft Ask
An exploratory or permission-based request. It tests interest without naming a specific dollar amount. Soft asks prepare the ground for a formal solicitation.

Stewardship
Intentional care of the donor after the gift. It includes gratitude, reporting, impact affirmation, and relationship continuation. Stewardship drives repeat and legacy giving.

Step-Up in Basis
The resetting of asset value to fair market value at death for tax purposes. This eliminates unrealized capital gains. It strongly influences whether donors give during life or at death.

Testamentary Gift
Any gift that takes effect only upon death. Bequests and testamentary trust provisions fall into this category. These gifts remain fully revocable during life.

The Ask
A direct, intentional request for a specific gift amount or asset for a defined purpose. It is the pivotal moment where cultivation shifts into solicitation. Effective asks are personalized, timed, and outcome-driven.

Unrestricted Gift
A donation that may be used at the organization’s discretion. These gifts support operational flexibility. They are often the most valuable dollars raised.

Upgrade
An increase in gift size over a donor’s previous highest contribution. Upgrades reflect growing donor confidence. They are a key metric in portfolio health.