Revenue Generation Dictionary

Written communications sent to donors confirming their gifts, typically including tax receipt information. Drive donor retention and revenue. Failure to send acknowledgement letters can lead to significant donor relations risks.

Measurable indicators used to track progress toward revenue diversification goals over time.

Investment in the capabilities that enable an organization or coalition to carry out and sustain its mission—such as leadership, fundraising, finance, compliance, technology, governance, communications, learning, security, and collaboration. Should be defined with the organization, not imposed as a diagnosis of deficiency.

Flexible, risk-tolerant money intended to unlock a new capacity, strategy, revenue stream, partnership, or larger pool of capital. In Progressive Multiplier's context, it helps organizations test and build revenue-generating practices that can continue producing value after the initial grant.

A financial risk referring to sudden drops in funding when grants end, creating financial instability if not planned for or replaced.

Joint fundraising efforts with other organizations or entities to raise funds for shared or complementary purposes.

A publicly supported nonprofit foundation that pools contributions from many donors and makes grants to improve the quality of life in a specific geographic area—typically a city, county, or region. Classified as a public charity 501(c)(3) rather than a private foundation. Examples include The Cleveland Foundation and Silicon Valley Community Foundation.

A type of project where an organization  provides expertise, advice, and guidance to individuals, organizations, or other groups for a fee. Examples of these services can include strategic planning, program evaluation, capacity building, and other forms of technical assistance. 

A private foundation created and funded by a for-profit corporation but legally separate from the company itself. Classified as a private foundation 501(c)(3). Grantmaking often aligned with corporate interests and values. Examples include The Walmart Foundation and Bank of America Charitable Foundation.

A philanthropic revenue strategy that involves raising money from a large number of people, typically through online platforms.

An entry-level fundraising staff role that may hold critical, often overlooked responsibilities such as acknowledgement letters, database management, social media account access, and deadline tracking for grants and reporting. Even entry-level development staff can hold critical knowledge that directly impacts revenue continuity.

A senior fundraising staff role responsible for overseeing the organization's overall revenue strategy and team. The departure of a development director creates significant risk to donor relationships and revenue strategy, making succession planning at this level essential.

Contributions made by individuals, which can vary in size and frequency. Examples include small-dollar donations, mid-level donations, major gifts, and planned giving. 

A charitable giving vehicle where a donor makes an irrevocable contribution to a fund held by a sponsoring organization, then retains advisory privileges to recommend how the funds are granted over time.

Examples include individual DAFs held at Fidelity Charitable, Schwab Charitable Trust, or local community foundations.

Revenue generated through organizational activities such as fee-for-service, events, merchandise sales, and other income-producing activities that the organization creates and controls.

A financial risk referring to sudden drops in funding when grants end, creating financial instability if not planned for or replaced.

A foundation with an invested pool of assets—its endowment—from which it typically funds grants and operations. A private non-operating foundation generally must make annual qualifying distributions of roughly 5% of its investment assets. Because the principal is usually preserved and invested, an endowed foundation may have greater long-term continuity, but its annual grant budget can still rise or fall with investment performance and board decisions.

One-time or recurring gatherings or activities that aim to raise funds or awareness for a particular cause or organization. Examples include galas, art auctions, film festivals, and climate art events.

Direct, clear requests made to funders for specific types of support, such as multi-year funding commitments.

A foundation with an invested pool of assets—its endowment—from which it typically funds grants and operations. A private non-operating foundation generally must make annual qualifying distributions of roughly 5% of its investment assets. Because the principal is usually preserved and invested, an endowed foundation may have greater long-term continuity, but its annual grant budget can still rise or fall with investment performance and board decisions.

A type of private foundation in which the donor's family plays a significant role in governance, grantmaking decisions, or operations, typically funded by a family's wealth and used to advance the family's charitable interests across generations. Classified as a private foundation 501(c)(3).

Examples include The Bill & Melinda Gates Foundation and The Walton Family Foundation.

An organization that conducts community-wide fundraising campaigns, pooling contributions from many individual donors, then redistributes those funds to member agencies or designated causes.

Examples include United Way chapters and Jewish Federations.

The legal obligation the executive director and board members have to ensure the financial health and proper management of the organization's resources. An integral part of being a board member that should be understood before joining.

A model for balancing revenue generation across philanthropic and independent revenue sources. Suggests that a balanced portfolio protects organizations against having too much revenue (and arguably power) at risk through a 50/50 rule OR diversity within a type of revenue generation.

An established nonprofit organization that provides legal and financial infrastructure to a project, initiative, or emerging organization that lacks its own 501(c)(3) status, enabling the project to receive tax-deductible donations and grants. The fiscal sponsor is a 501(c)(3) public charity; the sponsored project operates under the sponsor's legal umbrella.

Examples include Tides Foundation and Fractured Atlas.

A separate commercial company owned or controlled by a parent organization—frequently a non-profit entity—to generate revenue, limit legal liability, and manage business activities that differ from the main mission.

Membership dues that are established and outlined in the organization's bylaws. Members pay these dues to maintain their membership status.

A less complex budget that looks at revenue at a granular level, separate from the full organizational budget. Should be reviewed every few months to ensure it is current. Identifies key revenue sources, who is responsible for managing the relationship with those sources, estimated date of realization, reporting/monitoring/evaluation needs, and secondary relationship manager for each source.

Funder Collaborative: An arrangement through which multiple donors coordinate or combine giving toward a shared goal. Some collaboratives pool money and make joint grants; others align strategies while each funder makes its own decisions. Collaboratives can bring more capital and reduce duplication, but should be assessed for who governs, who sets strategy, and whether they reduce or add burden for grantees.

Examples include: Grantmakers Concerned with Immigrants and Refugees and Funders' Collaborative On Youth Organizing

The ongoing cultivation and maintenance of relationships with foundation funders. Includes timely reporting, regular communication, and ensuring funders know the breadth of the organization's leadership and capabilities. Strong funder stewardship creates confidence in organizational continuity during staff transitions.

Flexible funding for an organization's overall mission rather than a narrowly specified project. It allows leaders to pay for the real mix of people, systems, programs, compliance, learning, and adaptation required to deliver results.

A form of participatory philanthropy in which a group of individuals pool their financial contributions and collectively decide where to donate the funds, often combining giving with learning and social connection. May operate informally, through a fiscal sponsor, as a donor-advised fund, or as an independent 501(c)(3).

A government agency or body at the federal, state, or local level that provides public funds to support programs, services, research, or infrastructure that advance public policy goals. Funded through tax revenue, fees, or legislative appropriations.

Examples include National Institutes of Health (NIH), National Science Foundation (NSF), and state departments of health or education.

An online platform through which grant applications, reports, and funder communications are submitted and managed.

A mass engagement, community-building campaign that covers a wide base of people who contribute small to modest amounts of money but adds up to a significant part of the budget.

An independent revenue source where investors provide capital expecting both financial return and social/environmental impact. Provides loans, equity investments, or other financing instruments (not gifts).

An investor or investment fund that deploys capital with the intention of generating measurable social or environmental impact alongside financial returns. May be a for-profit investment fund, a program within a foundation, or a dedicated impact investment firm.

Examples include Acumen Fund and Root Capital.

A private foundation that operates independently of the founding donor, the donor's family, or any corporation—typically governed by an independent board of directors or trustees. Examples include The Ford Foundation and The Andrew W. Mellon Foundation.

One of two main categories in a balanced revenue generation portfolio; includes fee-for-service or consulting, impact investment, real estate, and LLCs/multi-entity work. Revenue that is generated independently rather than through philanthropic contributions.

Unlike formal membership dues, these fees are not explicitly outlined in the organization's bylaws. They are typically paid by members to support the organization's ongoing activities. Voluntary contributions made by members who are not bound by any formal agreements or bylaws.

One of two main categories in a balanced revenue generation portfolio; includes fee-for-service or consulting, impact investment, real estate, and LLCs/multi-entity work. Revenue that is generated independently rather than through philanthropic contributions.

Funding from foundations and government entities; also referred to as foundation grants. The primary focus of diversification efforts.

An organization that receives funds from larger donors or institutions and redistributes them to smaller organizations, grassroots groups, or communities, often providing additional capacity-building support, technical assistance, or advocacy.

Examples include Groundswell Fund and Third Wave Fund.

A fundraising model where an organization generates leads (i.e., potential donors) and converts them into actual donors through targeted marketing and engagement strategies.

An organization in which leadership and key knowledge are distributed across multiple staff members, not concentrated in one person. Funders who know an organization is leaderful are more confident in its continuity during staff shifts. This concept is central to building organizational resiliency and avoiding the "house of cards" scenario where one person's departure collapses the revenue structure.

Direct, individualized fundraising campaigns for the largest individual donors in an organization's base that offer perks and access above other forms of individual giving. Requires personalized cultivation and stewardship.

A philanthropic revenue strategy where donations are matched by employers or other entities, effectively doubling the contribution.

A structured giving program where donors pay regular dues or fees in exchange for defined benefits or connection to the organization.

Products sold by the organization to generate revenue.

Specialized and targeted individual giving campaign centered around donors who give more than grassroots donors but are not yet at the level of major donors. Represents a middle tier of individual giving.

A funding model where an organization sells branded merchandise or products, with proceeds going toward supporting the organization's mission.

A strategic risk where an organization's mission and activities shift away from their core purpose, often due to following funder priorities rather than organizational goals.

A commitment covering more than one year. It creates greater predictability, although the value depends on whether future installments are guaranteed, conditional, or subject to annual approval.

Recurring activities or events that provide participants with a unique experience. Examples include tours, workshops, classes, and other educational or cultural experiences. These experiences can be designed to educate, entertain, and raise funds for a particular cause or organization.

The ability of an organization to continue functioning and sustaining its revenue streams even when key staff depart. Developed through building redundancy, cross-training, documentation, and relationship redundancy. Uses the Jenga tower analogy: a resilient organization can withstand the removal of multiple pieces and still stand strong.

A fundraising model where individuals solicit donations from their personal networks on behalf of an organization or cause. An organization mobilizes its supporters or volunteers to fundraise on its behalf, leveraging supporters' social networks and personal relationships to reach a wider audience and raise more funds.

One of two main categories in a balanced revenue generation portfolio; includes foundation and government grants, small donor giving, peer-to-peer fundraising, planned giving, events, merchandise, crowdfunding, sponsorships/partnerships, membership programs, matching gift programs, and collaborative fundraising. Contrasts with independent revenue sources.

A form of philanthropic revenue where donors make arrangements to contribute to an organization through their estate plans or other long-term financial instruments.

One of two main areas of focus in the Revenue Inventory Tool. Documents revenue ideas expected to launch. Tracks prospecting lead personnel, launch dates and timelines, and revenue projections.

A foundation staff member responsible for managing an issue area or grant portfolio. Program officers often source and assess potential grantees, develop recommendations, maintain relationships, monitor grants, and help shape strategy. Their authority varies: they may be influential champions, but they often do not have final approval and must operate within budgets, strategy, executive decisions, and board policy.

A nonprofit organization classified as a public charity (not a private foundation) that operates a significant grantmaking program, often alongside other charitable activities such as direct services, research, or advocacy. Classified as a public charity (501(c)(3)); must meet IRS public support tests. Examples include American Cancer Society and The Nature Conservancy.

Major relationships that impact revenue should not depend on one person. Every donor or funder relationship must be held by at least two staff members: one primary and one secondary relationship manager. Both should be up to date on all facets of the relationship and both should have cultivated reliability and trust with the donor or funder. If every donor knows they can always get ahold of someone they trust at the organization, they will be less likely to stop giving when their primary contact leaves.

Grants or contributions that come with limitations on how the money can be used, constraining organizational flexibility in resource allocation. Represents a financial risk when too much of the budget is restricted. Funding limited to a defined program, activity, geography, population, or budget.

The uninterrupted flow of funding and income streams through and beyond staff transitions. The core goal of revenue succession planning. Revenue continuity is achieved through the proactive documentation of systems, cultivation of relationship redundancy, and strategic planning for both expected and emergent changes.

The practice of developing multiple streams of income to reduce dependency on any single funding source, particularly institutional grants. Central strategy for organizational financial health.

The complete mix of all revenue sources an organization uses to fund its operations. Should be balanced to protect against risk.

One of two main categories in a balanced revenue generation portfolio; includes fee-for-service or consulting, impact investment, real estate, and LLCs/multi-entity work. Revenue that is generated independently rather than through philanthropic contributions.

The combination and proportion of different revenue sources that make up an organization's total budget. Example target: "No single source of revenue is more than 50% of the mix by year 3."

The potential financial loss to an organization resulting from a staff departure, loss of account access, missed deadlines, or damaged funder relationships. Assessed by examining who holds key relationships and knowledge, and what funding is at stake if that person departs. Determining the right amount and type of redundancy is directly tied to the level of revenue risk.

A design for ensuring the continuity of your funding projects and income streams in the event of a significant staff departure in your organization. It is a form of risk mitigation that helps you understand the funding consequences of staffing changes and can address transitions at all levels of revenue responsibility. The average tenure of a fundraiser is only 18 months, making this planning essential.

Arrangements where businesses or other entities provide financial support, often in exchange for recognition or alignment with the organization's mission.