Some of the terms here are specifically defined in state statutes and therefore the exact definition may vary
between states. For this reason, it is critical to consult the appropriate state code when determining matters
of law. If a term listed here is defined in either the Model Solicitations Act
(1986) or the Model Nonprofit Corporation Act (1987), then
that definition is generally given here. However, not all states have necessarily based their law on those models
and most have altered the models in some ways.
Terms included in the definitions of this glossary that are themselves defined elsewhere in the glossary are
italicized and linked to their own definitions. Links that are not italicized lead to other Web pages. Terms that
are numbers appear at the place they would be if spelled out.
Some additional dictionaries are:
- Nonprofit Organization Issues
- Legal and Related Dictionaries
- General Dictionaries and Glossaries
- Articles of Incorporation
- A legal document that creates specific type of organization, a corporation,
under the laws of a particular state. State law prescribes specific statements that must be included in Articles
of Incorporation, and nonprofit corporations in particular must include
certain provisions in order to qualify as nonprofit under state law. Furthermore, in order to obtain federal tax-exempt status, certain provisions must be included either in a nonprofit organization's
Articles of Incorporation or its Bylaws.
- Back-End Premium
- A term used to describe a (generally) low cost item that is sent by charitable soliciting organizations to
donors as a modest form of thanks. See also front-end premium.
- Board of Directors
- See Board of Trustees.
- Board of Trustees
- Also termed the "Board of Directors." In a nonprofit corporation,
the Board of Trustees represents the interests of the general public or the specific public group that the organization
was established to serve.
- An organization established for generating profit. A commercial
- A legal document stating certain self-imposed rules adopted for the regulation of an organization's own actions.
Since it is a required element when forming a corporation, Bylaws are a form
of agreement or contract between the corporation and its owners to conduct itself in a certain way. While for a
commercial business the owners are its shareholders, the ownership of a nonprofit
corporation belongs to the public as represented by the NPO's Board of
Trustees and the government.
- Case law
- The body of written law established through judicial decisions, instead of legislative action (which establishes
- Certificate of Authority
- A license issued by a state's Secretary of State giving permission
for a foreign corporation to operate in that state. This license is required
before operating a business establishment or otherwise engaging in commerce
in that state, such as hiring that state's residents as employees. However, some activities that are conducted
in a state by a commercial or nonprofit
organization may not constitute sufficient presence (called "nexus")
in that state to require a Certificate of Authority.
- Charitable organization
- In the Model Solicitations Act (1986), "Charitable organization"
"(1) Any person determined by the Internal Revenue Service to be a tax
exempt organization pursuant to section 501(c)(3) of the Internal
Revenue Code; or
(2) Any person who is or holds himself out to be established for any benevolent, educational,
philanthropic, humane, scientific, patriotic, social welfare or advocacy,
public health, environmental conservation, civic or other eleemosynary purpose
or for the benefit of law enforcement personnel, firefighters, or other persons who protect the public safety,
or any person who in any manner employs a charitable appeal as the basis of any solicitation or an appeal which
has a tendency to suggest there is a charitable purpose to any such solicitation."
- Charitable purpose
- In the Model Solicitations Act (1986), "charitable purpose"
- (1) Any purpose described in Internal Revenue Code section 501(c)(3);
(2) Any benevolent, educational, philanthropic, humane, scientific, patriotic, social welfare or advocacy, public
health, environmental conservation, civic or other eleemosynary objective, or
an objective that benefits law enforcement personnel, firefighters, or other persons who protect the public safety."
- Charitable sales promotion
- In the Model Solicitations Act (1986), "charitable sales
promotion" means "an advertising or sales campaign, conducted by a commercial
co-venturer, which represents that the purchase or use of goods or services offered by the commercial co-venturer
will benefit, in whole or in part, a charitable organization or purpose."
- Charitable solicitation
- See solicitation.
- Charity, Charitable
- Some common meanings of "charity" are, (1) benevolent goodwill toward or love of humanity, (2) lenient
judgment of others, (3) generosity and helpfulness especially toward the needy or suffering; also aid given to
those in need, (4) public provision for the relief of the needy, (5) an institution engaged in relief of the poor,
(6) a gift for public benevolent purposes, or an institution founded by such a gift. See also charitable
organization and charitable purpose.
- Commercial, Commerce, Commodity
- Occupied with or engaged in commerce or work intended for commerce. Commerce is the exchange, buying, or selling
of commodities. A commodity is an economic good, or something useful or valued. However, when used in law with
regard to nonprofit organizations, "commerce" is specifically
considered to be engaged in for the purpose of creating profit.
- Commercial organization
- See business.
- Commercial co-venturer, coventurer
- In the Model Solicitations Act (1986) "commercial co-venturer"
means a "person who for profit is regularly and primarily engaged in trade or
commerce other than in connection with soliciting
for charitable organizations or purposes and who conducts a charitable
sales promotion." Sometimes a law will simply refer to a "coventurer" with the same meaning.
A compilation of state definitions of the term "commercial
co-venturer" and related terms is available at this site.
- Common law
- Unwritten law primarily based on custom, but also sometimes referring to a system of law originating in England.
- Something that constitutes an equivalent or recompense. A reward for services rendered. Compensation may be
monetary (in cash or cash equivalents) or non-monetary (in property or intangible benefits). Also see consideration.
- The inducement, price or motive that causes a party to enter into an agreement or contract. Also see compensation.
- In the Model Solicitations Act (1986), "contribution"
means "the grant, promise or pledge of money, credit, property, financial assistance or other thing of any
kind or value in response to a solicitation. It does not include bona fide fees,
dues or assessments paid by members, provided that membership is not conferred solely as consideration
for making a contribution in response to a solicitation."
- A form of legal entity created under state law. This entity is treated much like an individual under law, and
therefore the term "person" in law usually means both individuals and corporations.
Corporations are governed by their Articles of Incorporation and
- An advisor, often a legal or financial advisor. A counsel does not usually perform the actions that are advised
himself or herself, which are instead performed by the person or organization that the advisor serves. See also
- Domestic corporation
- A corporation that was established in the jurisdiction
being considered. For instance, a nonprofit corporation incorporated in New York is a domestic corporation with
respect to New York state laws. However, it is a foreign corporation
with respect to the laws of every other state.
- See contribution.
- Charitable. Of, relating to, or supported by charity.
- That section of the Internal Revenue Code defining certain tax-exempt,
nonprofit organizations. These organizations are specifically established
for religious, charitable, educational, literary or scientific purposes.
- Front-End Premium
- A (generally) low-cost item sent with a charitable solicitation as an inducement to a potential donor, but
which the recipient gets to keep regardless. See also back-end premium.
- Foreign corporation
- A corporation that was established outside of the jurisdiction
under consideration. For instance, a nonprofit organization incorporated in New York is a foreign corporation with
respect to Ohio state law, but is a domestic corporation with respect
to New York law.
- Fundraising consultant
- In the North Carolina
General Statutes Section 131F-2(10), "fund-raising consultant" means "any person who meets all
of the following:
- a. Is retained by a charitable organization or sponsor for a fixed fee or rate under a written agreement to
plan, manage, conduct, consult, or prepare material for the solicitation of contributions in this State.
b. Does not solicit contributions or employ, procure, or engage any person to solicit contributions.
c. Does not at any time have custody or control of contributions."
- A key component of this definition is item (c), which distinguishes it from the definition of "fundraising
counsel" given in the Model Solicitations Act (1986),
as a person who does not solicit contributions but may have custody or control of the contributions at some point.
Typically, the regulatory burden is less for a person who doesn't ever have custody or control of contributions.
A person who either conducts the solicitation or has custody or control of contributions at any time is typically
defined as a professional solicitor rather than a fundraising consultant.
A compilation of state definitions of the term "fundraising
consultant" and related terms is available at this site.
- Fundraising counsel
- In the Model Solicitations Act (1986), "Fund raising counsel"
means a "person who for compensation plans, manages, advises, consults,
or prepares material for, or with respect to, the solicitation in this state of contributions
for a charitable organization, but who does not solicit
contributions and who does not employ, procure, or engage any compensated person to solicit contributions. No lawyer,
investment counselor or banker who advises a person to make a contribution shall be deemed, as a result of such
advice, to be a fund raising counsel. A bona fide salaried officer, employee or volunteer of a charitable organization
shall not be deemed to be a fund raising counsel."
Typically, the regulatory burden is less for a person who doesn't actually conduct the solicitation but only
advises the nonprofit organization. Note, however, that the Model Solicitations Act (1986) did not specify that
a fundraising counsel never has custody or control of the contributions. Accordingly, some states have added such
a requirement to their definition of this role, sometimes renaming it to fundraising
A compilation of state definitions of the term "fundraising
consultant" and related terms is available at this site.
- An electronic file format that represents text and graphical material primarily through a hierarchical structure
rather than any particular layout for presentation. HTML-format is the primary method for encoding World Wide Web
pages. Because HTML-format documents generally don't specify the precise layout of the page, they appear differently
when presented by different display mechanisms. For instance, pages may be automatically and dynamically reformatted
to fit within a display box if that box is adjusted in size. Furthermore, because HTML-format files are composed
only of text (with independent images embedded by the display software), they are very compact and easily used
with automatic text searching mechanisms. The ability to present fill-out forms in HTML-format that are easily
processed by widely available and inexpensive Web server software provides a simple means for electronic submission
of data. These characteristics all contrast with those for PDF-format.
- Internal Revenue Code
- Section 26 of the United States Code, which is administered by the
Internal Revenue Service.
- Internal Revenue Service, IRS
- The executive branch agency of the U.S. government that carries out the functions described by Section 26 (Internal
Revenue) of the United States Code. The agency that collects federal taxes
on personal and corporate income and some other revenue. This agency maintains a Web
- The authority of a sovereign power to govern or legislate. The power or right to exercise authority. The limits
or territory within which authority may be exercised.
- Model Solicitations Act (1986)
- A model law developed by the National Association of Attorneys General, the National
Association of State Charity Officials, and the Private Sector Advisory Group and completed in 1986. The full title
of the document is "A Model Act Concerning the Solicitation of Funds for Charitable Purposes." The Model
Act was subsequently adopted by many states, but some portions were later ruled unconstitutional by the Supreme
Court. A complete copy of the Model Act is available online.
- National Association of Attorneys General, NAAG
- The National Association of Attorneys General (NAAG) was founded to facilitate interaction among Attorneys
General as peers, and to facilitate the enhanced performance of Attorneys General and their staffs. The Associationís
56 members are the Attorneys General of the 50 states and the chief legal officers of the District of Columbia
(Corporation Counsel), the Commonwealths of Puerto Rico (Secretary of Justice) and the Northern Mariana Islands,
and the territories of American Samoa, Guam, and the Virgin Islands. The U.S. Attorney General is an honorary member.
This organization maintains a Web site.
- The condition of having sufficient presence in a jurisdiction to be subject
to specific laws of that jurisdiction. For instance, in order to be subject to the taxing authority of a state,
a person or organization must have sufficient presence in that state, usually established
by operating a business or otherwise engaging in commerce there. The degree of presence and the associated specific
conditions necessary for a nexus to be formed is typically established by statutory
and case law.
- Not conducted or maintained for the purpose of making a profit.
- Nonprofit organization,
Nonprofit corporation, NPO
- An organization in which no owner, stockholder or trustee shares in profits and losses, and which exists not
to earn revenue but to promote a mission that typically (but not necessarily) enhances the public welfare. These
organizations are often eligible for tax-exempt status, but not all nonprofit
organizations are tax-exempt, nor can contributions to all nonprofit organizations be treated as deductions for
income tax purposes.
- Paid solicitor
- See professional solicitor.
- An electronic file format that represents text and graphical material independent of the particular display
system, presenting a layout and style identical or nearly identical to the corresponding printed paper version.
PDF-format is the format most commonly used by the IRS to publish forms online. PDF-format
can be used either to display pages by constructing them from their component parts (i.e. text, lines, images,
etc), or by simply presenting the scanned image of that page. The former method is much more compact and may be
used with automated text searching mechanisms, but is much more labor intensive to create if starting from a printed
page. PDF-format contrasts with HTML-format, which may be presented differently depending
on the display mechanism. Another key difference is that while fill-out forms may be composed in PDF-format, online
software that can process completed forms in this format are neither common nor inexpensive.
PDF-format has been deemed acceptable in proposed IRS regulations for Internet publication of tax-returns and
Applications for Exemption for tax-exempt organizations.
- In legal meaning, a "person" may be an individual, a corporation,
or some other entity created according to law. The Model Solicitations Act
(1986), defines "person" as "an individual, corporation, association, partnership, trust,
foundation or any other entity however styled."
- Professional solicitor
- Also termed a "paid solicitor" or sometimes just "solicitor." A professional solicitor
is distinguished from a fundraising consultant or fundraising
counsel by having greater control of the fundraising operation, typically including conducting the solicitation
itself and/or having custody or control of contributions at some time.
Under the Model Solicitations Act (1986), "paid solicitor"
means "a person who for compensation performs
for a charitable organization any service in connection with which
contributions are, or will be, solicited in this
state by such compensated person or by any compensated person he employs, procures, or engages, directly or indirectly
to solicit. No lawyer, investment counselor or banker who advises a person to make a charitable contribution shall
be deemed, as the result of such advice, to be a paid solicitor. A bona fide salaried officer employee or volunteer
of a charitable organization shall not be deemed to be a paid solicitor."
As another example, in the North
Carolina General Statutes Section 131F-2(10), "solicitor" means "any person who, for compensation,
does not qualify as a fund-raising consultant and does either of the
- a. Performs any service, including the employment or engagement of
other persons or services, to solicit contributions for a charitable
organization or sponsor.
b. Plans, conducts, manages, consults, whether directly or indirectly,
in connection with the solicitation of contributions for a charitable
organization or sponsor."
- A compilation of state definitions of the term "professional
solicitor" and related terms is available at this site.
- The excess of returns over expenditure in a transaction or series of transactions.
- Secretary of State
- The leader of an executive-branch government agency that usually is responsible for recordation duties. For
instance, when establishing a corporation, Articles
of Incorporation are typically filed with the Secretary of State for the state in which the corporation
- Social welfare
- Organized public or private social services for the assistance of disadvantaged groups.
- Solicitation, Solicit, Soliciting
- Also "charitable solicitation." In the Model Solicitations
Act (1986), "Solicit" and "solicitation" mean "the request directly or indirectly
for money, credit, property, financial assistance, or other thing of any kind or value on the plea or representation
that such money, credit, property, financial assistance, or other thing of any kind or value, or any portion thereof,
will be used for a charitable purpose or benefit a charitable
organization. Without limiting the scope of the foregoing, these words shall include the following methods
of requesting or securing such money, credit, property, financial assistance or other thing of value:
- (1) Any oral or written request;
(2) the making of any announcement to the press, over the radio or television or by telephone or telegraph concerning
an appeal or campaign by or for any charitable organization or purpose;
(3) the distribution, circulation, posting or publishing of any handbill, written advertisement or other publication
which directly or by implication seeks to obtain public support;
(4) the sale of, offer or attempt to sell, any advertisement, advertising space, book, card, tag, coupon, device,
magazine, membership, merchandise, subscription, flower, ticket, candy, cookies or other tangible item in connection
with which any appeal is made for any charitable organization or purpose, or where the name of any charitable organization
is used or referred to in any such appeal as an inducement or reason for making any such sale, or when or where
in connection with any such sale, any statement is made that the whole or any part of the proceeds from any such
sale will be used for any charitable purpose or benefit any charitable organization.
- A solicitation shall be deemed to have taken place whether or not the person making the same receives any contribution."
A compilation of state definitions of the term "solicit"
and related terms is available at this site.
- For purposes of NPO law, a person or organization that solicits
charitable donations (contributions). In some state laws, "solicitor"
has the same or a similar meaning as professional solicitor.
- Standardized Registration Kit
- See Uniform Registration Statement.
- Statutory law
- The body of written law established by enactments expressing the will of legislature, in contrast to common
law or case law.
- A term usually used to mean exempt from state or federal corporate income taxes, e.g. a tax-exempt nonprofit
organization. However, organizations that are exempt from state or federal corporate income taxes are not
usually exempt from all taxes.
- Uniform Registration Statement, URS
- A form contained in the Standardized Registration Kit, which is accepted by most states that require registration
of nonprofit organizations conducting charitable
solicitations within their jurisdiction, in lieu of each state's own
form for this purpose. Some states that will accept the URS require certain supplementary information provided
through additional forms included in the Kit. The Standardized Registration Kit, which is sponsored by the National
Association of Attorneys General (NAAG) and the National Association of State Charities Officials (NASCO),
is available online or in printed form from any of several distributors.
- United States Code, USC
- A consolidation and codification of the general and permanent laws of the United States arranged by subject
under 50 titles, the first six dealing with general or political subjects, and the other 44 alphabetically arranged
from agriculture to war. The United States Code is updated annually, and available for online
search or download. Commonly abbreviated as U.S. Code, U.S.C.
|Online Compendium of Federal and State Regulations for U.S. Nonprofit Organizations