Giving Glossary

Charitable giving comes with its own language. This glossary explains common terms so you can give with confidence. Whether you are a donor, a professional advisor or a nonprofit partner, this guide can help you better understand the language of giving.

Getting Started

New to charitable giving? These terms are a good place to begin.

Philanthropy: Philanthropy is giving your time, money or talents to support the common good. You don’t have to be wealthy to be a philanthropist. Every gift, large or small, helps build stronger communities.
Charitable Gift: A charitable gift is a donation you make to support a nonprofit or charitable cause. Gifts can take many forms, including cash, stock, real estate or personal property.
Donor: A donor is any person, family, business or organization that makes a charitable gift. If you’ve ever given to a cause you care about, you’re a donor.
Advisor: An advisor is a professional who helps you make financial, legal or tax decisions related to giving. This may include an attorney, CPA, financial advisor or wealth manager. Working with an advisor can help you give more strategically and tax-efficiently.
Asset: An asset is anything you own that has value. In charitable giving, common assets include cash, stocks, mutual funds, real estate and business interests. Many assets can be donated directly to charity.
Appreciated Asset: An appreciated asset is something you own, like stock or real estate, that has grown in value over time. Donating an appreciated asset directly to charity may help you avoid capital gains tax and receive a charitable deduction. Learn more about donating appreciated assets.
Complex Asset: A complex asset is a non-cash gift that takes more planning to donate. Examples include real estate, closely held business interests and certain collections. Blue Grass Community Foundation can help you work through the process. Learn more about gifts of complex assets.
Outright Gift: An outright gift is a donation you make right now, rather than through your estate or a future arrangement. It’s the most direct way to support a cause and see your giving in action.
Anonymous Gift: An anonymous gift is a donation made without publicly identifying yourself as the donor. If privacy matters to you, this is an option worth knowing about.

Community Foundation Terms

Wondering what a community foundation actually does? Here’s what you need to know.

Community Foundation: A community foundation is a public charity that helps people give to causes they care about, supports local nonprofits and invests in the long-term health of a region. Blue Grass Community Foundation serves Central + Appalachia Kentucky, connecting donors with opportunities to make a lasting difference.
Public Charity: A public charity is a nonprofit that receives broad public support and meets IRS requirements for that status. Community foundations are public charities, which means your gifts to us are tax-deductible to the extent allowed by law.
Private Foundation: A private foundation is a charitable organization typically funded and controlled by one individual, family or corporation. It operates under different tax and reporting rules than a public charity. Many donors choose a donor advised fund at a community foundation as a simpler, more flexible alternative.
Fiscal Sponsorship: Fiscal sponsorship is an arrangement where an established nonprofit accepts charitable contributions on behalf of a project or group that doesn’t yet have its own tax-exempt status. This allows new initiatives to receive tax-deductible donations while getting off the ground.
Variance Power: Variance power is the authority community foundations have to adjust how a fund is used if the original purpose becomes impossible, unnecessary or no longer aligned with community needs. It helps protect your giving over time, even as circumstances change.
Donor Services: Donor services are the tools and support a community foundation offers to help you give effectively. At Blue Grass Community Foundation, that includes grantmaking support, fund administration, charitable planning and deep knowledge of our local community.

Fund Types and Giving Options

Not sure which type of fund fits your goals? Here’s a breakdown of your options.

Fund: A fund is a charitable giving account set up for a specific purpose. Funds at Blue Grass Community Foundation can be tailored to your giving goals, whether you want to support a single nonprofit, a broad cause area or future generations.
Fund Agreement: A fund agreement is the document that outlines the purpose, terms and structure of your charitable fund. It’s the foundation of your giving relationship with us.
Endowment: An endowment is a permanent charitable fund invested for long-term growth. Each year, a portion is available for grants while the fund continues to grow. Endowments are one of the most effective ways to create a lasting legacy.
Endowed Fund: An endowed fund is designed to exist in perpetuity. It’s invested to provide ongoing charitable support year after year, long after your initial gift is made.
Non-Endowed Fund: A non-endowed fund doesn’t have to last forever. You can make grants over time until the fund is fully used. This works well for donors with a specific project or timeframe in mind.
Donor Advised Fund: A donor advised fund, often called a DAF, lets you make a charitable contribution, receive an immediate tax deduction if eligible, and recommend grants to nonprofits over time. It’s one of the most flexible and tax-smart ways to give.
Corporate Advised Fund: A corporate advised fund helps businesses organize and manage their charitable giving. Your company can contribute to the fund and recommend grants to nonprofits over time.
Designated Fund: A designated fund provides ongoing support to one or more specific nonprofits you choose. It’s a good fit if you want to make a permanent commitment to an organization you believe in.
Field of Interest Fund: A field of interest fund supports a broad cause area, such as education, the arts, health care or the environment. Grants are made within that area based on community need and your intent. It’s a flexible way to stay focused on what matters most to you.
Scholarship Fund: A scholarship fund provides financial support to students based on criteria you set. You can shape who benefits and how.
Agency Fund: An agency fund is established by a nonprofit at a community foundation to support the organization’s long-term financial stability. If you lead a nonprofit, this is a way to build a reserve that works for your mission.
Operating Endowment: An operating endowment is an endowed fund that helps support a nonprofit’s ongoing operations, not just programs or projects. It gives organizations a stable financial base to build from.
Community Fund: A community fund is an endowed fund that supports charitable giving in a specific county or geographic area. Blue Grass Community Foundation manages nine geographic component funds across our service area. Each fund supports local grantmaking, reflects the priorities of that community and grows over time through the power of endowment.

Grantmaking and Community Impact

Grants are how charitable dollars move from funds to the people and organizations that need them.

Grant: A grant is a distribution of money from a charitable fund to a qualified nonprofit or charitable purpose. Grants are how your fund makes a difference in the community.
Grantmaking: Grantmaking is the process of reviewing and awarding charitable dollars to nonprofits, schools, agencies or community projects. Blue Grass Community Foundation manages this process so your giving is thoughtful and effective. Learn about our grants.
Grant Recommendation: If you have a donor advised fund, a grant recommendation is your suggestion that the fund make a grant to a specific nonprofit. Blue Grass Community Foundation reviews recommendations to confirm eligibility.
Matching Gift: A matching gift is a contribution that matches gifts made by others, dollar for dollar or at another ratio. Matches encourage more giving and stretch charitable dollars further.
Giving Circle: A giving circle is a group of people who pool their charitable dollars and make grant decisions together. It’s a collaborative, community-driven approach to philanthropy. LexGive365 is an example of a giving circle at Blue Grass Community Foundation.
Spendable Amount: The spendable amount is the portion of a fund available for grants or distributions in a given year, based on the fund agreement and spending policy.
Spending Policy: A spending policy determines how much can be distributed from an endowed fund each year while preserving long-term growth. It’s how we balance current giving with future impact.
Scholarship Committee: A scholarship committee reviews applications and selects recipients based on the criteria you establish for your scholarship fund.

Donor Intent and Gift Purpose

Your giving reflects your values. These terms explain how that intent is honored.

Donor Intent: Donor intent is the charitable purpose or priorities you want your gift or fund to support. Blue Grass Community Foundation works to honor your intent now and in the future.
Restricted Gift: A restricted gift is a donation designated for a specific purpose you define. Your dollars go exactly where you direct them.
Unrestricted Gift: An unrestricted gift gives a nonprofit or community foundation the flexibility to direct funds where they’re needed most. These gifts are often the most useful because they fill gaps that restricted dollars can’t.
Mission: A nonprofit’s mission is its core purpose, the reason it exists and the work it does. When you give, you’re investing in that mission.

Tax and Financial Terms

Smart giving starts with understanding the tax side of charitable gifts.

Charitable Deduction: A charitable deduction is a tax deduction you may be able to claim for an eligible gift to a qualified charitable organization. The amount and eligibility depend on your tax situation, so talk with your advisor.
Tax Receipt: A tax receipt is a written acknowledgment of your charitable gift. You’ll need it for your tax records. Blue Grass Community Foundation provides receipts for all gifts.
Qualified Charitable Distribution: A qualified charitable distribution, or QCD, is a direct transfer from your IRA to a qualified charity. If you’re 70½ or older, a QCD may count toward your required minimum distribution and won’t be included in your taxable income. It’s one of the most tax-efficient ways to give. Learn more about IRA charitable giving.
IRA Charitable Rollover: IRA charitable rollover is another name for a qualified charitable distribution. See Qualified Charitable Distribution above.
Principal: The principal is the original amount contributed to a fund, especially an endowed fund, before any investment earnings are added.
Stock Gift: A stock gift is a donation of appreciated securities, such as publicly traded stock or mutual fund shares. Giving stock directly to charity may help you avoid capital gains tax and receive a charitable deduction for the full market value. Learn more about donating stock.

Legacy and Planned Giving

Planned giving lets you make a future gift that reflects your values and supports causes you care about.

Legacy Giving: Legacy giving is a charitable gift you arrange now that takes effect in the future. Common options include gifts through a will, trust, retirement account or life insurance policy. Your legacy gift can support Central Kentucky for generations.
Planned Giving: Planned giving is charitable giving arranged as part of your financial or estate planning. It often includes bequests, beneficiary designations, trusts and gifts of complex assets.
Estate Planning: Estate planning is the process of deciding how your assets will be managed and distributed during your lifetime and after your death. It typically includes a will, trust, beneficiary designations and, for many people, charitable gifts.
Estate: Your estate is everything you own at the time of your death, including money, investments, real estate and personal property. Charitable gifts from your estate can reduce estate taxes and leave a lasting impact.
Will: A will is a legal document that explains how you want your assets distributed after your death. You can include a charitable gift to Blue Grass Community Foundation or any nonprofit you choose.
Trust: A trust is a legal arrangement in which one party manages assets for the benefit of another person or charitable purpose. Trusts are common tools in both estate planning and planned giving.
Bequest: A bequest is a charitable gift made through your will or trust. You can leave a specific dollar amount, a percentage of your estate or what remains after other gifts are made. Bequests are one of the most common and meaningful planned gifts.
Testamentary Gift: A testamentary gift is a charitable gift that takes effect after your death through a will or trust. It’s another term for a bequest.
Beneficiary Designation: A beneficiary designation names who receives assets from your retirement account, life insurance policy or other financial account after your death. Naming a charity as a full or partial beneficiary is a simple way to make a lasting gift.
Successor Advisor: A successor advisor is the person or people you name to recommend grants from your donor advised fund after you’re no longer able to serve. Naming a successor keeps your charitable legacy going.
Charitable Lead Trust: A charitable lead trust is a planned giving arrangement that makes payments to charity for a set period of time. After that period ends, the remaining assets pass to your family or other beneficiaries.
Charitable Remainder Trust: A charitable remainder trust makes payments to you or other beneficiaries for a set period of time or for life. After that, the remaining assets go to charity. It can provide income now and a charitable gift later.

Memorial and Tribute Giving

Honoring someone through a gift is a meaningful way to celebrate their life or mark a special moment.

Memorial Gift: A memorial gift is a donation made in memory of someone who has died. It’s a lasting way to celebrate their life and support a cause they cared about.
Tribute Gift: A tribute gift is a donation made in honor of a person, occasion or milestone. Birthdays, anniversaries and retirements are common reasons people give tribute gifts.

Have questions about charitable giving?

Blue Grass Community Foundation helps individuals, families, advisors and nonprofits make giving simple, meaningful and lasting. Contact us to start a conversation about your goals.

This glossary is for general informational purposes only and is not legal, tax or financial advice. Please consult your advisor about your specific situation.

Scott Fitzpatrick