This is Alliance magazine’s alphabetical glossary of key terms in philanthropy and social investment and links to useful philanthropy organizations. Unless explicitly stated, none are legal definitions. Since many of the terms are current in different parts of the world, their legal definition, where one exists, will vary from one jurisdiction to another. Rather, they are descriptions based on the experience of the Alliance team* with references for users to inform themselves of the debates and issues surrounding the terms and their use.
We invite readers to help revise and refine the glossary by submitting further entries or suggestions to firstname.lastname@example.org.
Accountability: Obligation or willingness to accept responsibility for actions. A common topic of discussion in philanthropy, usually in relation to a presumed absence or deficit. Several elements of accountability, actual or desirable, form part of this debate: the accountability of donors to the public, to their beneficiaries, to the government of the country in which they are based and, in the case of institutions, of the officers and trustees to the institution itself (see also fiduciary duty). In practice, the last two are the most commonly occurring forms of accountability, though the use of constituent feedback (see below) is also making headway.
Bilateral agency: A government agency or non-profit organization based in one country which provides aid, including medical aid or disaster relief, for people in other countries. Prominent examples include USAID in the US, the Department for International Development in the UK and the BMZ (German Federal Ministry for Economic Development Cooperation).
Charity: (1) The voluntary giving of assistance, most commonly money (2) organization set up to collect and give such assistance to a specified object or objects. The definition – and perceived legitimate recipients – varies between countries. In the UK, for instance, the Elizabethan Statute of Charitable Uses (1601) prescribed the purposes or activities the state believed were of general benefit to society and this is still the basis of the modern definition of charitable purposes.
Challenge grant, fund: Fund or grant in which the recipient or beneficiary is also expected to raise a specified proportion of grant or fund.
Civil society: The collective name for voluntary, non-commercial and non-profit groups often referred to civil society organizations (CSOs) or non-governmental organizations (NGOs) which pursue a variety of common purposes. The definition of civil society is one of the most disputed of the past two decades. Irrespective of where the limits lie, two general points are worth making: first, they are voluntary – in other words, not formed in response to an obligation imposed by the state; second, they are not for profit. For some contrasting definitions, see for example, https://en.oxforddictionaries.com/definition/civil_society, http://schoolforcivilsociety.ca/wp-content/uploads/2013/01/What-is-Civil-Society.pdf, http://www.britannica.com/topic/civil-society)
Community foundations: A tax exempt, publicly-supported not-for-profit organization with the long-term goal of benefiting a given geographic area or population. The term ‘community foundation’ originated in the US and is now used in multiple countries. Its definition and character vary according to the laws and norms of different countries. Visit here to see a comprehensive list of community foundations, via the Community Foundations Atlas, organised by the Charles Stewart Mott Foundation.
Community philanthropy: Raising voluntary local resources (which include, but are not limited to money) for local purposes. The term is not limited to community foundations, though community foundations may be considered an expression of community philanthropy.
Constituent feedback: Documenting or otherwise taking note of the responses of beneficiaries or users of services by the providers of those services. At the most basic level, analogous to customer satisfaction surveys used by businesses.
Core support, funding: Funds given to an organization for the maintenance or strengthening of the organization itself, rather than for expenditure on one its initiatives.
Corporate foundation: Foundation established by a company which provides the funds for the foundation. Usually a separate legal entity, the company and foundation nevertheless have a continuing relationship whose terms vary. In Latin America, they are the prevalent form of grantmaking foundation. In Germany, a number of foundations originate in a company and have the company name (for example, Robert Bosch Stiftung, Bertelsmann Stiftung) but in fact the foundation owns the company. These are not considered as corporate foundations, but as corporate-related foundations.
Corporate Social Responsibility (CSR): The activities of businesses that are directly intended to benefit society. These can include philanthropy, ethical labour practices or taking steps to protect the environment.
Crowd philanthropy/crowdfunding: A fundraising method, by mostly digital means, in which a large group of people donate various, often small, amounts to a particular cause.
Divestment: The withdrawal of investment in an organization or area for reasons which may include the activities of the organization or area contravening the stated interests of the investor, or concerns about ethical or social values. An example is the recent divest-invest movement which is calling on investors (including philanthropists) to withdraw assets invested in fossil fuels and invest them instead in ‘climate solutions’ (see http://divestinvest.org/
Effective altruism: a systematic approach to giving based on a calculation of where giving will do most good (see http://www.effectivealtruism.org). Advocates include Peter Singer (often credited as the founder of the movement) and William McAskill.
Endowment: Sum of money donated for the maintenance of an institution such as a school, hospital or a foundation. The endowment is invested to produce long-term income for its beneficiary. Many foundations are endowed foundations, the money they donate being produced by the interest on the endowment (see also: payouts)
Education, (philanthropy education): Research and teaching about philanthropy, either conceptually (for example, the philosophical basis of philanthropy and its purpose) or practically (courses for professional grantmakers, students or donors, for example, the governance and legal background to setting up a foundation). For a picture of its development and current provision, see our interactive map.
Foundation A non-governmental, non-profit organization with assets provided by a donor or donors. It is administered by its own officers and expends its income for public benefit. Definitions, legal status and obligations vary from country to country. In the US, for instance, foundations are required to spend 5 per cent of their assets annually on their prescribed purpose. In the UK, there is no distinct legal definition of a ‘charitable foundation’. Most frequently ‘foundation’ or ‘trust’ is used to describe charities with private, independent and sustainable income that fulfil their purposes by funding or otherwise supporting individuals or other organisations. (See also http://www.acf.org.uk).
(Family) foundation: Despite the prevalence of the type (the Council on Foundations estimates some 44,000 in the US and many Asian foundations are family foundations), it does not usually enjoy a distinct legal status. Generally speaking, they are foundations set up and run by a single family, whose members continue to have some form of involvement over a period generations.
Fiduciary duty: Broadly speaking, the responsibility of an organization’s officers and trustees to put the interests of the organization before their own in matters which concern it. For a legal definition, see http://legal-dictionary.thefreedictionary.com/fiduciary+duty.
Giving Pledge: Launched in 2010 by Bill Gates and Warren Buffet, the Pledge seeks to persuade the world’s billionaires to give half of their net worth as philanthropy either during their lifetimes or on their death. By 2016, 154 individuals or couples had signed up. The Pledge is a moral, not a legal, commitment. (See https://givingpledge.org).
Global South: Term often used to refer to developing countries including Africa, Asia, and Latin America and apparently derived from and applied to those countries who were supposedly the victims, rather than beneficiaries of economic globalization. See associate editor Andrew Milner’s piece highlighting the ambiguity of the term
Grantmaking foundations: Private foundations that use their income to make grants to other charitable organizations for projects as prescribed in the terms of their establishment. There is a distinction between these and operating foundations (see below), the two activities are not mutually exclusive and some foundations function as both.
Grassroots fundraising: Originally coined in relation to politics, raising funds for either an individual or organization by means of small donations (see also crowd philanthropy, crowdfunding).
HNWIs: High net worth individuals. People with a high level of assets, usually measured in terms of liquid assets, though the definition of what constitutes high net worth varies from region to region and even from one financial institution to another.
Harambee: Form of community giving or support practised in Kenya.
Horizontal philanthropy: The reciprocal giving that takes place within communities, among friends, family members, etc. It is strongest where traditions of mutual aid are also strong. Often overlooked in considerations of philanthropy, it was brought to prominence by studies like the Building Community Philanthropy project led by Susan Wilkinson Maposa and Alan Fowler at the University of Cape Town. (See also community philanthropy, http://www.thepoorphilanthropist.org/publications)
Impact investment: According to the Global Impact Investing Network (GIIN), impact investments are those made into companies, organizations, and funds with the intention to generate a measurable, beneficial social or environmental impact alongside a financial return.
Multilateral agency: Organization, either governmental or non-profit, formed by three or more countries to work on issues of concern to all those countries. They can be global in scope (the World Bank, the OECD) or their remit can be a particular region (Inter-American Development Bank, Japan Institute of International Affairs, Asian Development Bank, etc).
NGO (Non-governmental organization): A constituent of civil society. The term is often used interchangeably with CSO (civil society organization) and even NPO (non-profit organization), though it is more likely to be applied to larger, more professional organizations.
Operating foundation: Private foundations that carry out their own charitable goals directly, rather than making grants to external organizations or individuals (see also grantmaking foundations). Such foundations are more common in continental Europe, than in either the UK or the US, and more common still in Latin America, where they tend to be the rule rather than the exception. It should be noted that there is no hard-and-fast distinction and a mix of the two activities is generally permissible and sometimes adopted.
Operating grant, support: Provision of assistance, financial or otherwise, for the functioning of an organization, for example, covering the cost of utilities, salaries, etc. (see also core support and unrestricted funding)
Overseas Development Aid, Assistance (ODA): Resources provided by official agencies, such as state and local governments, to least-developed countries (LDCs) as defined by the UN and to countries and to multilateral agencies, to low- and middle-income countries, whose eligibility is based on Gross National Income (GNI) per capita. For the most up-to-date list of recipient countries, see http://www.oecd.org/dac/stats/documentupload/DAC%20List%20of%20ODA%20Recipients%202014%20final.pdf
Participatory philanthropy: A way of actively engaging communities in decision making of valuing people on the ground, as subject matter experts, as practitioners of the funded work, and as the end beneficiaries of services (see also: giving circles, community philanthropy). It’s also a way of offsetting or acknowledging the unequal relationship between donors and recipients.
Payouts: What foundations distribute annually. In many places, this is not subject to regulation, though it is in, for example, the US, where private grant making foundations must distribute a minimum 5 per cent of assets annually (See http://foundationcenter.issuelab.org/resource/understanding_and_benchmarking_foundation_payout).
Philanthropy: Private action or the use of private resources for public purpose. The term can refer to any act of giving whether the gift is money, time or expertise.
Philanthro-capitalism: Term coined by Matthew Bishop and Michael Green to describe how philanthropy is the handmaiden of capitalism allowing wealth generated by the market to be re-constituted for public good. It also describes a form of giving in which wealthy individuals are increasingly proactively involved in the allocation of funds.
Private Social Investment (PSI): Term is widespread use in Latin America, where it is preferred to philanthropy.
Programme-Related Investment (PRI): The investment of all or part of a foundation’s endowments and assets in industries or enterprises which further a specific element of the foundation’s work. They differ from mission-related investments (see above) in that they relate to a particular foundation programme, rather than to its general mission, because in the US, under certain conditions, they count as part of a foundation’s payout requirement, and because they can be made where below-market rates of return are expected.
Scale-up: The ability to expand programmes, projects or ideas in collaboration with other foundations and/or government, business and civil society. Scale is most closely associated with proponents of ‘systemic’ approaches to philanthropy in which finite resources can be leveraged to address root causes embedded in political, social or economic systems. It can do this through encouraging government to adopt pilot programmes, supporting for social movements or through market-based approaches such as impact investing. It can also take a ‘venture capital’ approach seeking high engagement partnerships and close monitoring of results. A notable effort towards philanthropy at scale is Co-Impact, a $500 million collaboration launched in November 2017. Notable research includes the Rockefeller Philanthropy Advisors 2017 research paper Scaling Solutions Towards Shifting Systems.
Social business: A not-for-personal-profit business whose main purpose is to address a social problem. Any profits that are made are reinvested in the business or used to start other social businesses, rather than being paid out in the form of dividends. On the other hand, it should be financially self-sustaining.
Social enterprise: Broadly the same as a social business, though there is much debate (and confusion) about the distinction between the two. In fact, they are often used interchangeably. This is at least partly because there is no clear or widely-accepted definition of either. In both, though, the social mission is paramount, though some argue that this is more the case in social enterprises and feel that a social enterprise offers more latitude – it can be structured as either a for-profit or non-profit organization and there is no insistence that all profits be put in the service of the mission. (For a discussion, see http://www.socialenterprise.org.uk, http://www.clearlyso.com/what-is-a-social-enterprise-2)
Social entrepreneur: Someone who is innovative or ‘entrepreneurial’ in their approach to solving social problems. While some see social entrepreneurship as being necessarily connected with social enterprises (if you’re a social entrepreneur, you run a social enterprise), others argue that while social enterprises are run by social entrepreneurs, the key distinguishing characteristic of a social entrepreneur is their approach.
Social investment: Using the market to affect society (see also: impact investment)
Spend-out: The expenditure of the entirety of a foundation or organization’s assets. Examples include the Peter Moores Foundation and the Tubney Charitable Trust in the UK, the Bill and Melinda Gates Foundation in the US (which must spend its endowment within 20 years of the death of its last-surviving founder) the Beldon Fund and Atlantic Philanthropies in the USA (see http://www.alliancemagazine.org/blog). These examples include both those which were set up with the intention of spending out (Beldon) and those which have subsequently decided to do so (Peter Moores Foundation). Also known as ‘sunset’ foundations.
Strategic philanthropy: Like its counterpart (and some would say its opposite) traditional philanthropy (see below), strategic philanthropy is a rather loose term (in at least one instance, it is used to mean cause-related marketing), but is generally considered to mean giving based on a considered view of how philanthropy can pursue social change (ie a lasting solution to a problem) by attacking underlying causes. Also implicit in the idea is research, both initial and continuing and a long-term engagement with a particular issue. (See also http://www.stratphilanthropy.com, https://ssir.org/up_for_debate/article/strategic_philanthropy)
Sustainable Development Goals (SDGs): A set of 17 goals (sub-divided into 169 targets) set in 2015 at the initiative of the United Nations, which most countries have committed to trying to reach by 2030 in order to ‘end poverty, protect the planet and ensure prosperity for all’. The goals have divided opinion with critics considering them either unrealistic, contradictory or overambitious. In promoting high levels of GDP growth, for example, critics suggest that the Goals will undermine their own ecological objectives. In relation to the headline goal of eliminating extreme poverty, it has also been suggested that $1.25 threshold used to measure extreme poverty is much too low and should be set as high as $5. (See http://www.un.org/sustainabledevelopment/sustainable-development-goals)
Technical assistance: Provision of non-monetary support for the operation or management of an organization. Can be provided directly by the donor or in the form of a grant specifically to pay for the expertise of a third organization in the area in question.
Traditional philanthropy: A loose term used to refer either to the objects of giving (for example, giving to ‘traditional’ beneficiaries such as education, healthcare, people evidently in need) or to giving which addresses symptoms rather than causes. In the latter sense, it is often used (especially by its critics) in contrast with ‘strategic’ giving which allegedly looks at the deeper roots of a problem. The term can also be used to denote more traditional forms of philanthropy such as Ubuntu, harambee and ujamaa (see elsewhere in this glossary).
Ubuntu: Long-established form of African giving based on solidarity and mutual assistance (see horizontal giving and http://www.alliancemagazine.org/analysis/a-watershed-moment-for-african-philanthropy)
Ujamaa: Swahili word used variously to mean ‘extended family’, ‘brotherhood’ or ‘socialism’. A form of local cooperation which took on institutional political form on 1960s Tanzania.
Unrestricted funds, funding: (see core funding)
Venture philanthropy: Applying techniques from venture capital finance and business to philanthropic goals. Its techniques include taking a seat on the board, organizational mentoring and long-term financial support. Prominent support organizations include the European Venture Philanthropy Association and the Asia Venture Philanthropy Network.
Zakat: Obligatory donation of part of one’s wealth to charity in Islamic faith to be distributed to certain prescribed groups of the needy. The literal meaning of Zakat is ‘to cleanse’ or ‘purification’. According to Islamic regulations, Zakat is 2.5 per cent of one year’s total cumulative wealth. Although the payment of Zakat and its objects remain firmly traditional, there are moves in some Islamic countries to widen its scope and effectiveness. Rumah Zakat in Indonesia, for example, has been set up to manage Zakat payments professionally and to devote the proceeds to education, health, community and economic development (see http://www.muslimaid.org/zakat-charity)
501c3: Section of US tax regulations which sets out the terms on which tax exemption for charitable contributions may be granted. There are different forms of 501c3 exemption for public charities and grantmaking foundations.
List of key organizations in the philanthropy eco-system
The following is a list of philanthropy networks or associations whose websites include information on many of the issues described above and other philanthropic institutions:
Asia Venture Philanthropy Network (AVPN), http://www.avpn.asia
Asian Philanthropy Forum http://www.asianphilanthropyforum.org
Asia Philanthropy Circle http://www.asiaphilanthropycircle.org
China Foundation Center http://en.foundationcenter.org.cn
Dasra (India), http://www.dasra.org
Filantropi Indonesia, http://filantropi.or.id
Japan Association of Charitable Organizations (JACO) http://www.kohokyo.or.jp/english/eng_index.html
Pakistan Centre for Philanthropy http://www.pcp.org.pk
Philanthropy Australia http://www.philanthropy.org.au
Philanthropy New Zealand http://philanthropy.org.nz
Arab Foundations Forum, http://arabfoundationsforum.org
Africa Philanthropy Network (APN) http://africaphilanthropy.org
African Women’s Development Fund http://awdf.org/african-philanthropy
Asociacion de Fundaciones Empresariales (AFE), Colombia http://afecolombia.org/es-es
Centro Mexicano para la Filantropia (CEMEFI), Mexico http://www.cemefi.org
Grupo de Fundaciones y Empresas (GDFE), Argentina http://www.gdfe.org.ar
Grupo de Institutos, Fundações e Empresas (GIFE), Brazil http://gife.org.br
Instituto para o Desenvolvimento do Investimento Social (IDIS), Brazil http://idis.org.br/en
Donors and Foundations Networks in Europe (DAFNE) http://dafne-online.eu
European Community Foundation Initiative (ECFI) http://communityfoundations.eu/home.html
European Foundation Centre (EFC) http://www.efc.be
European Venture Philanthropy Association (EVPA) http://evpa.eu.com
European country associations:
Austria: Association Funding for Public Benefit
Belgium: Belgian Federation of Philanthropic Foundations
Bulgaria: Bulgarian Donors Forum
Croatia: Croatian Foundations Forum
Czech Republic: Czech Donors Forum
Finland: Council of Finnish Foundations
France: Centre Français des Fonds et Fondations
Germany: Bundesverband Deutscher Stiftungen
Hungary: Hungarian Donors Forum
Ireland: Philanthropy Ireland
Italy: Associazione di Fondazioni e di Casse di Risparmio (ACRI)
Italy: Assifero (Assifero (Associazione Italiana delle Fondazioni ed Enti della Filantropia Istituzionale)
Liechtenstein: Association of Liechtenstein Charitable Foundations
The Netherlands: Vereniging van Fondsen in Nederland
Poland: Polish Donors Forum
Portugal: Portuguese Foundation Centre
Russia: Russia Donors Forum
Serbia: Serbian Philanthropy Forum
Slovak Republic: Slovak Donors Forum
Spain: Asociación Española de Fundaciones
Sweden: Föreningen Stiftelser i Samverkan
Switzerland: Swiss Foundations
Turkey: Third Sector Foundation of Turkey (TUSEV)
UK: Association of Charitable Foundations
Ukraine: Ukrainian Philanthropists Forum
Worldwide Initiative for Grantmaker Support (WINGS) http://www.wingsweb.org
Charities Aid Foundation http://www.cafonline.org
Change Philanthropy http://www.changephilanthropy.org
Council on Foundations http://www.cof.org
Exponent Philanthropy http://www.exponentphilanthropy.org
Foundation Center http://www.foundationcentre.org
Grant Makers for Effective Organizations http://www.geofunders.org
Independent Sector http://www.independentsector.org
Philanthropic Foundations Canada http://pfc.ca
Interactive map of philanthropy centres and chairs
Click here to discover our interactive map of philanthropy centres and chairs, featured in our March 2017 issue on ‘Philanthropy scholarship and practice – bridging the divide‘.
*Compiled by Andrew Milner, Halie Dalton and Charles Keidan.
Lead photo: The Long Room in the Old Library, Trinity College, Dublin.