Ultimate Trusts and Foundations Glossary
General Terms
A vehicle for philanthropy, wealth management and succession (legacy) planning
Assets are placed in a trust by a settlor with proceeds going towards charitable beneficiaries (as decided by the settlor and trustees).
Similar to a charitable trust but closer in structure to a company.
This article explains the differences between trusts and foundations (which are subtle, numerous and too complicated for my brain at this time of the morning…)
An individual who establishes a charitable trust, by transferring assets to the trustees
Living settlors are likely to also be trustees.
A person with responsibility for deciding how assets in a charitable trust are to be distributed to beneficiaries
A pre-application process, the format of which is dictated by the trust or foundation.
An EOI helps trustees to pre-screen eligible organisations before they set about writing an application. Usually the preserve of larger trusts, they will set out instructions for how to complete and send an expression of interest on their website.
A pre-application enquiry to determine whether or not a charity is eligible to make an application to a trust or foundation. It’s similar to an Expression of Interest in that it’s a pre-application but usually a fundraiser instigated action, via a phone call, email or short letter.
Applications which are not welcomed, invited or asked for.
If a trust states that they ‘don’t accept unsolicited applications’ then they only way you can apply is usually via a personal connection. If your activities fit their criteria incredibly closely, you could try a short eligibility enquiry (which recognises their policy and accepts that there is no expectation of a response).
It is my personal belief that where possible, we should respect the wishes of trustees to do philanthropy on their terms (though I’m happy to be challenged on this!).
This means that rather than inviting applications from charities, charitable trusts do their own research into the causes they wish to fund.
Most will not accept unsolicited applications.
The number of words allowed in a specific section of a funding application (or an application overall)
The number of letters and spaces (!) allowed in a specific section of a funding application.
An activity or service which has a defined start and end point with specific outputs and outcomes attributes.
An activity or service which has a defined start and end point with specific outputs and outcomes attributes and where only one funder funds the costs in their entirety.
Instructions from a trust or foundation regarding the projects or services they wish to fund, the groups of people they seek to help and the process for making an application.
Where a trust or foundation considers applications sufficiently regularly that deadlines for submitting applications are not required.
For fundraisers, this means you can apply at any time.
A list of upcoming funding opportunities, used to predict income and plan accordingly
A pipeline can relate to an individual fundraiser and their donor allocation, a team or to an organisation overall.
It keeps track of upcoming funding opportunities and enquiries / bids submitted where a decision has not been made.
Keeping track of your pipeline can help with financial and capacity planning, too little in the pipeline and an organisation may need to undertake more research into prospects / scale down its operations. Too much in the pipeline and a fundraiser will need to prioritise their workload and decide which prospects are the most important to pursue.
“The process / actions / activities* you undertake in order to know your prospects in preparation for asking for a gift.
“The time period between identification / research and asking.”
*Many of these will be similar to those undertaken at the stewardship stage.
“The process / actions / activities* you undertake in order to thank and recognise a trust following a gift.”
*Many of these will be similar to those undertaken at the cultivation stage.
Often includes reporting as a minimum.
“Sharing information with a trust about how their gift has been spent and the impact as a result of their investment.”
This is often an essential activity, the terms and format of the report are often dictated by the trust and are set out in the grant agreement.
“A document which sets out the problem a specific charity (or project) seeks to solve, the proposed solution and costs”.
The Case for Support is not an external document, nor is it a one size fits all piece of communication to be shared in its original format, rather it is a template from which external fundraising related communications are derived.
See this article for more info.
A group of prospects or donors looked after by one fundraiser
Your allocation size will depend upon how much time you have available for major gifts fundraising and the total gift potential of all of the prospects you’re working with.
E.g. a Trust Fundraiser working full time with donors making an annual gift of £500 – £1,000 may have up to 100 prospects / donors in their allocation.
A part time Trusts Manager working with 6 / 7 figure prospects may be working an allocation of between 10 – 30 trusts or foundations.
Whilst a fundraiser has oversight of their allocation and will often know the donors very well, they may act more as a conduit between the donor and the Chair / CEO, responsible for the overall trajectory of the relationship but not for the individual interactions which happen along the way (especially where bigger trusts / major donors are concerned).
‘The act of sending funding applications in bulk to EVERY trust you can regardless of whether or not you’re a good prospect for them’
The fundraising code of conduct describes this practice as ‘mass mailing’.
“the things which have actually happened to a person giving them specific understand of a situation (which those without first hand experience would not have)”
In the context of trust fundraising, it’s important to consider whether the projects / services / solutions you’re describing have been influenced at all with people who have lived experience. Are your words truly reflective of those you’re seeking to serve? If you haven’t included the voice of lived experience, can you be confident that your proposal is authentic?
“the involvement of beneficiaries in the design and / or deliver of a product or service.”
“the act of speaking with intended beneficiaries about a proposed project / service to determine that it’s a) wanted / needed and b) the best way to solve a problem faced by a specific community.”
“A description of the change which is anticipated based on specific interventions / activities and almost always informed by evidence.”
An independent organisation set up to regulate fundraising in the UK, funded through an annual fee to large charities
They host the Fundraising Codes of Practice and the (controversial) Fundraising Preference Service…”
A donor who has made a gift in the last two years
A donor who has made a gift but not in the last two years
A trust identified as a potential donor but who has not yet made a gift
A trust identified, researched and deemed to be a good fit for the organisation
Finance and governance
“The way in which an organisation is organised, managed, governed and the practices which are undertaken to ensure that standards are met in accordance with the relevant compliance”.
Charities are required to follow governance practices as set out by the Charity Commission. Fundraising practice is set out in a code of practice owned by the Fundraising Regulator.
Activities which form the day to day operations of your charity.
They happen sufficiently regularly to necessitate inclusion in your annual budgeting process and are usually the last things to be cut in the event of a funding shortfall.
Costs needed to run core services
Material objects, specific items, often a one off or occasional purchase e.g. building materials, furniture, vehicles, equipment etc
Capital items of significant value (e.g. buildings) will be listed in a charity’s accounts as assets. Many will depreciate in value and will therefore need to be replaced.
Costs which for the most part are recurring and ongoing and do not relate to specific items or objects, e.g. labour (salaries / contractors / facilitators), venue / equipment hire, volunteer expenses etc.
Revenue costs relate directly to charitable activities and are slightly different to overheads.
Items which can be attributed to a specific, time bound activity and which have their own outputs and outcomes.
These can be capital, revenue, overheads or a mix of all three.
Costs to your charity which do not directly relate to the charitable work you’re undertaking (but would be unable to operate without
The amount of money left in a charity’s bank account at the end of a year (after income and expenditure have been accounted for).
In a company structure this would be described as ‘profit’, but it’s more like a ‘savings account’ or a financial buffer, to be used in the event of unpredictable income caused by external events which negatively impact the charity’s ability to raise money (e.g. global pandemic)
Charities are expected to have enough in reserve to be able to meet the costs of winding up should they be unable to continue their work.
This NCVO article explains reserves in more depth.
Reserves which can only be spent on a specific purpose (ultimately decided by the trustees, sometimes on the instructions / wishes of a donor whose gift is conditional).
To spend restricted reserves on an item outside of the parameters set would be unlawful.
Reserves without restriction which can be spent on whatever the trustees decide (obviously within the charitable objectives as defined in an organisation’s constitution).
“Reserves which the trustees have decided can only be spent on a specific purpose”.
Similar to Restricted Reserves but with flexibility to revert funds to ‘unrestricted’ if needs be.
“the amount of money which comes into an organisation annually”
Otherwise known as ‘income’
“An annual document which sets out financial information of an organisation across a 12 month period. Production and timely filing of management accounts is a legal requirement.”
“An annual document which contains management accounts plus additional information (not required by law) such as trustees’ review, summary of activities, strategic plans, case studies and a space to recognise and thank donors.”
Also known as an Annual Review
“A much shorter version of an Annual Report / Annual Review. Designed to be easily read and enjoyed by supporters. Usually contains a summary of management accounts and specific data on the difference a charity makes”.
An Impact Report often sets out a powerful, long term legacy vision to excite and inspire supporters.
“The practice of presenting a budget which includes overheads (usually as a percentage) to ensure that core costs are covered by contributors to specific projects”.
“The promise of a grant / gift by a supporter before the money is actually received by the recipient charity.”
“A contract presented alongside a pledge / gift which sets out the terms under which funding is offered.”
This will often include clauses around the timescales in which money needs to be spent, the items which can be purchased, reporting and publicity requirements.
“A large sum of money placed into investments which generates annual funds each year.”
Most charitable trusts and foundations are set up this way. It’s typical for interest earned from investments each year to be distributed in the form of grants.
Sometimes some or all of the capital will be added to the original investment, enabling the endowment to grow so that higher amounts of interest can be accrued in future years.
“The decision by trustees to close the trust by spending the endowment alongside the annual interest payments”.
This can sometimes result in larger than average grants for beneficiaries. Be sure to look after your trust donors, regardless of how much they’re giving.
“Funding which is given over more than one year (but where only one application is required).”
e.g. a total gift of £60,000 given over three years in equal instalments of £20,000.
“Where a project or service is funded by more than one contributor.”
“the degree to which an organisation is able to sustain its projects, products or services financially.”
In trust fundraising terms, funders want to understand how reliant a charity is likely to be on their support and on other funders in the long term.
More and more, funders wish to help charities move away from a 100% voluntary funded model (or ideally, away from a model which relies on too few sources). The reality is that many charities will always be reliant on voluntary income and that diversifying into trading or high volume / low value individual giving is unlikely.
Typical terms found in Trust applications
“the ability to plan for the future with imagination or wisdom”
Your vision should be bold, positive and forward thinking (and therefore fabulous for use in legacy campaigns)
- “Our vision is for a world without cancer”
- “Our vision is that every local person has access to the outstanding palliative care as and when they need it.”
- “Our vision is for a thriving population of African Black Rhinos, which increase each year and where they can live free from the threat of hunting for sport.
“a formal summary of the aims and values of an organisation”
“a purpose or intention”
I like to think of this as your why. The reason you exist. E.g.
- “Our mission is to prevent the imminent extinction of the African Black Rhino”
- “Our aim is to provide high quality care for 6,000 local people living with life limiting illnesses and their families each year.”
“principles or standards of behaviour”
The rules you abide by and governing principles which direct both your vision, mission and purpose along with your daily decisions.
“a goal or aim”
I define aims as one or two overall goals and objectives and activities as a further derivative of these.
Our aim is to provide high quality care for 6,000 local people living with life limiting illnesses and their families each year.”
Our objectives are:
- To deliver care to 500 people within our inpatient unit each year
- To support 700 people living with life limiting illnesses in their own homes (through our Hospice at Home service)
- To support provide respite to over 1,000 carers each year through our day centre
“An action done in the pursuit of an objective”
The things you do which contribute towards the fulfilment of your overall vision. Often, the thing you’re raising money for.
- weekly employability training sessions for young people who are not currently in education, training or employment
- regular woodland management
“A state of lacking or requiring help”
The problem you’re trying to solve and often the reason your charity exists.
“the amount of something produced by a person, machine or industry.”
Same as activities, but they need to be specific and relating to the funding you’ve received (note the use of the word ‘amount’ in the dictionary definition.
- 6 people attended 10 weekly employability training sessions
- Last year, we felled 2 acres of coniferous woodland and replanted the area with indigenous broadleaf deciduous trees.
“a consequence”
The things which happen after your activities have taken place and can be directly attributed to your outputs.
- Of the 6 people who attended weekly employability training sessions, 3 have since started new jobs
- As a result of the replanting, sunlight can now reach the forest floor providing renewed habitats for several species of butterflies and invertebrates.
“a marked effect or influence”
Wider changes which happen on a larger scale as a result of your outputs and outcomes. E.g.:
- This programme will help more young, disadvantaged people to enter the job market for the first time.
- In the long term, a more biodiverse forest will lead to better air quality in the local area.
“To observe and check over a period of time”
The things you will do during the project to check that any funded work is going to plan.
“the making of a judgement about the amount, number, or value of something”
The assessment you make about your project after is has finished to establish whether or not it was a success. Also a great opportunity to learn lessons and to tweak future endeavours
“To spread widely”
Sharing findings from any work you’ve done with others.
“measured by quantity”
Evidence gathered during monitoring about your work which relates to data and is specific and measurable.
- 6 people attended 10 weekly employability training sessions
- Of the 6 people who attended weekly employability training sessions, 3 have since started new jobs
- 2 acres of commercial coniferous forest felled and replaced with indigenous deciduous species
- An increase of sightings of the rare spotted butterfly from X in 2010 to Y in 2020
‘Measured by quality’
Evidence gathered during monitoring about your work which relates to how people felt about the activities / outputs which took place. E.g.
- Of the 6 people who attended the weekly employability training sessions, all reported feeling more confident in creating a CV
- Of the 6 people who attended the weekly employability training sessions, all reported that they knew at least three places they could look for jobs online within their field of experience / interest
“An account regarded as being unreliable or as being hearsay”
Hmm…not sure I agree with the Oxford English Dictionary’s version!
I prefer – information which supports the need for a project or the impact of a project but which has not been formally measured. E.g.
- Staff recognise a new air of positivity in young people soon after they start to attend employability training sessions
- Staff have seen evidence that beech trees are starting to spring up from seed, alongside those which have been planted by hand in areas where non-native conifers have been felled
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