Online fundraiser’s glossary: Essential terms to know

Online fundraising grows and changes often as technology advances. Have you discussed online strategy or fundraising technology and been unsure of the jargon used by consultants, websites, or sales representatives? This online fundraising glossary can help you make sense of this terminology to effectively communicate about your nonprofit organization’s digital strategy.

The next time you or a colleague are questioning what an online fundraising word means (or doesn’t mean) reference this glossary:

• 501(c)(3): Named for section 501(c)(3) of the Internal Revenue Code, this is an IRS designation for tax-exempt nonprofit organizations. Most charitable nonprofits in the United States are of this type. In general, donations to 501(c)(3) organizations are tax-deductible. Nonprofits with this status must be careful not to engage in certain activities (such as supporting political candidates) and are subject to limits on lobbying.
• A/B testing: A/B testing, typically used for promotional campaigns, involves testing two versions of one strategy or message with your audience. For accurate results, leave all other variables the same to see which one produces better results. For instance, you could write two different subject lines for an email, divide your email list in half, and deliver one subject line to one half of your list and the other subject line to the remaining half. Then, reference the results to see which subject line has a greater open rate.
• Abandonment rate: Abandonment rate refers to the percentage of users who didn’t follow through with a specific action. Usually, this is in reference to an online payment scenario such as your donation page, but it can also apply to event registration pages. Common reasons for abandoning a donation include a complicated checkout process, too many questions to answer, or limited payment options. Keeping your donation pages simple, uncluttered, and easy to use will help to reduce abandonment rates.
• Appeal: Your fundraising appeal is your organization’s request for donations to support your purpose. It can take the form of an email, print letter, social media post, or even a live or broadcast event. An appeal explains your cause, shows its impact, and creates a sense of urgency on your donors’ parts.
• Call to action: A call to action is a specific instruction that asks your donors to do something right away, such as donate, volunteer, or sign a petition. An effective call to action creates a sense of urgency and is brief, clear, and easy to do.
• Charity auction: Charity auctions are a fun, effective way to raise funds, build energy around your organization, and tell the story of your purpose. People bid on items like physical goods or services (which are usually donated to the event), and the proceeds benefit your general fund, a specific campaign or project, or an individual. Charity auctions can be live (meaning people openly bid in person), online, or silent (allowing donors to keep their bids private).
• Charity Navigator: Charity Navigator is a nonprofit corporation that evaluates U.S. charities and posts nonprofits’ publicly available tax returns on its website. Its rating system uses zero to four stars to reflect a nonprofit’s financial health, accountability, and transparency. Charity Navigator also includes a metric that evaluates how well charities report on the results of their work.
• Clickthrough rate (CTR): A clickthrough is when a person follows a link from one online page or email to another. Clickthrough rate represents the percentage of supporters who come into contact with the link and follow it. Measuring your clickthrough rate is one way to determine the success of a campaign. For example, how many users clicked through to your donate page from an email, and of those, how many completed a donation?
• Conversion rate: Conversion rate is the percentage of users who followed through with a specific action you wanted them to take. Nonprofits often use this metric to see how many people visited your donation page versus how many of those completed a donation.
• Crowdfunding: This is a type of fundraising method where an individual or organization asks many people for small donations to reach the fundraising goal. In an online crowdfunding campaign, the fundraiser creates a personalized page on a site that allows them to collect donations, share the page through social media channels and email, and update people on the fundraiser’s progress.
• Donate button: Your donate button is the big, bold graphic that features a clear call to action (like “Donate now!”) and links to your donation page. Place your donate button in a prominent location on your organization’s website, such as the navigation bar, and in your email outreach.
• Donation page: This is the web page where your supporters make donations to your organization. It might be built directly into your website or hosted by a third-party service. The ideal donation page allows for recurring gifts and customization to match your branding and suit your campaigns’ specific needs.
• Donor-advised fund (DAF): A donor-advised fund is an account administered by a 501(c)(3) organization that acts as a fiscal sponsor to manage donations on behalf of organizations, families, or individuals. This fund allows people to make a donation in return for an immediate tax benefit. The fiscal sponsor (the organization) has legal control over the fund, but contributors retain the right to recommend or advise which groups or projects the assets should benefit.
• Donor database, DRM, or CRM: These terms apply to your donor database, or the list of people who have given to your organization at some point. It might also include people who are strong prospective donors, such as volunteers or anyone who has attended one of your events. A donor database includes details like contact information, giving history, whether they are recurring donors, and how often they volunteer with your nonprofit. This list could be kept in something as simple as an Excel spreadsheet or as complex as a donor management system.
• Donor retention: Donor retention is the percentage of people who repeatedly support your organization. Retention rates are typically calculated annually.
• Double opt-in: Double opt-in ensures that the people on your email lists actually subscribed to your list. First, a potential donor signs up for your email list through your website. Then, your email system sends an automatic response confirming the sign-up and including a link the person must click. The person clicks the link to verify the request, and the system adds their contact information to the list.
• Electronic funds transfer (EFT): An electronic funds transfer is a computerized system that transfers money from one bank account to another without any physical bills or checks changing hands. Common examples of EFTs are credit or debit card payments, online bill payments, and direct deposits from a savings or checking account.
• Employer identification number (EIN): This is a nine-digit number assigned by the IRS to identify tax accounts that are required to file business tax forms. Entities that use EINs include employers, sole proprietors, nonprofits, corporations, trusts, estates, and more.
• End of fiscal year (EOFY): A fiscal year, also called a financial or budget year, is the period used for calculating annual financial statements and/or tax returns. Fiscal years can vary between businesses and jurisdictions, and they don’t necessarily correspond to the calendar year. Being familiar with your major donors’ fiscal year schedule, for example, can help you determine the best time to make your ask so it aligns with when they’re budgeting for the next fiscal year.
• Email service provider (ESP): An ESP is a company that provides email hosting, meaning you can send, receive, and store emails. Using an ESP allows your organization to send bulk emails to your supporter lists quickly and efficiently. They often track useful data like email opens (how many people opened the email, who opened it, and when they were opened) and which links they clicked in your messages. ESPs often allow you to segment your lists so you can target specific audiences. Using an ESP can also help prevent your messages from landing in spam folders and offer people a quick, simple way to join or unsubscribe from your email list.
• Fiscal sponsor: A fiscal sponsorship is an arrangement between a 501(c)(3) nonprofit organization and a project or entity that does not have that tax status. The fiscal sponsor (the nonprofit organization) offers its legal and tax-exempt status to assist a group or project that shares its purpose. The nonprofit receives and releases funds on behalf of the other entity. In addition to expanding the nonprofit’s purpose, this arrangement can give the sponsored party more funding options, like grants.
• Gift string: A gift string is a series of suggested donation amounts varying from a conservative gift to a generous donation. Your gift string appears on all of your donation pages and printed fundraising material. Ideally, your gift string should range from a little below your average donation to a good amount higher. For an organization that receives an average donation of $40 to $50, the gift string would include amounts such as $25, $50, $100, and $500.
• Giving days: A giving day is a 24-hour fundraising event that rallies donors, volunteers, and entire communities around a common cause. It can be driven by geography, a theme, or an organization. Giving days are a fun way to leverage the energy of your team and constituents, tell your nonprofit’s story, and acquire new donors.
• GivingTuesday: GivingTuesday is a global day of giving that takes place on the first Tuesday after Thanksgiving as a way to counter the consumer-oriented holiday shopping season. Often tagged #GivingTuesday on social media, the event began in 2012 by the 92nd Street Y in New York City in partnership with the United Nations Foundation. Today, it’s a global fundraising event that engages more than 10,000 nonprofits.
• Giving USA: Giving USA is a comprehensive annual report from the Giving Institute that estimates each year’s total charitable giving in the U.S. The report calculates total giving from roughly 53 million U.S. households, 16 million corporations that claim charitable deductions, more than one million estates, and 82,000 foundations.
• Google Analytics: Google Analytics is a free service from Google that tracks traffic to your website and offers a wide variety of ways to report that data. Keep in mind that your website must include a special HTML tracking code to capture traffic data. Google Analytics allows you to see which pages on your website are generating engagement, where visitors come from and when, and conversion activity like whether a site visitor clicked through to your donation page and completed a transaction.
• Great Nonprofits: Great Nonprofits is a website featuring stories, reviews, and ratings from clients, donors, volunteers, and anyone else who has experience with a particular organization. The goal is to help people make an informed decision about whether to support a specific nonprofit. The website also offers nonprofits a platform to share and collect reviews and stories about their purpose.
• Hyperlink: A hyperlink, known more simply as a link, is a highlighted element in an electronic document that, when clicked, takes the user to another page on the internet, a different section in a document, or a downloadable document. A hyperlink can be built into a word, phrase, or image.
• Impact labels: Impact labels are statements that help donors visualize what each donation level will provide to your constituents. They often encourage higher levels of giving. For example, if your organization provides medical assistance, you might tell donors that $25 will provide a first aid kit and $50 will vaccinate 10 children. Donors are likely to decide to give the extra amount if they perceive a much higher value attached to it. Another way to use impact labels is to offer donors a reward or recognition for their contribution, such as special membership privileges. You can list these benefits next to each giving level on your gift string, which also entices higher giving.
• Landing page: A landing page is a page on a website that a user comes to when clicking a link from somewhere else, such as an email, social media post, or another page on your website. A landing page is not necessarily your website’s homepage. Rather, it can be any page on your website that you link to.
• “Last year but unfortunately not this (year)” (LYBUNT) or lapsed donor: This acronym refers to donors who have not made a gift within the last year. They can be great prospects to reach out to during your year-end appeals.
• Merchant account: This is a type of bank account that allows your organization to accept and process credit card payments for donations. These accounts charge a transaction fee to the account holder, typically a small percentage of the total donation.
• Monthly giving: A monthly giving program allows supporters to make an automatic donation of a specific amount every month, typically as a recurring credit card charge. Donors who might not be able to give a large one-time gift are often willing to sign up for monthly giving. Ultimately, these donors end up donating more over time than they would have otherwise.
• Open rate: Open rate is simply the percentage of people who opened or viewed an email. Common factors that negatively impact open rates are vague subject lines, messages landing in spam folders, or sending messages at a time when donors aren’t checking their inboxes (like the middle of the night). Often, the larger your list, the lower your open rate tends to be. Be aware that most tracking systems count a message as opened when it appears in an email client’s preview pane, even though the recipient might not have actually read it.
• Payment Card Industry (PCI) compliant: PCI security standards apply to any financial transactions (donations, memberships, ticket purchases, etc.) that your organization facilitates involving people’s credit or debit cards, whether online, in person, or by phone. A PCI-compliant website, for instance, adheres to a set of requirements set forth by the PCI Security Standards Council designed to ensure that all companies that process, store, or transmit credit/debit card information maintain a secure environment.
• Peer-to-peer fundraising or social fundraising: This is a fundraising method where your supporters raise donations from their social networks on your organization’s behalf. The nonprofit usually supplies the tools, such as social media assets, a personalized fundraising page, and sample messages to help those fundraising on its behalf succeed.
• QR Code: A QR code (short for Quick Response Code) is a smartphone-readable barcode made up of black and white squares. Reading a QR code requires scanning it with the camera on your cellphone via an app that can decode the encrypted information. QR codes can include links to your nonprofit’s website or donation page, your YouTube channel, or more information about a fundraising event. They can be particularly useful in printed materials like direct mail or on signs and kiosks. One benefit to QR codes is that you can track user traffic much like you can with your website.
• Recurring giving: Recurring or monthly giving is an important option on your donation page that allows donors to give an amount in regular increments. Recurring giving is an easy, effective way to boost overall fundraising over the course of a year, so this option should be prominently displayed on your donation page. People who strongly support your cause but aren’t able to make a large donation prefer recurring giving because it allows them to give more over time than they could otherwise. It also helps your organization budget more effectively since you can predict how much money will come in going forward.
• Responsive design: Responsive design means creating websites, email campaigns, and other digital media that are optimized to be read easily on all electronic devices. This design will automatically resize to fit any device, from full-size laptops to tablets to smartphones, so readers can easily read and click the page. Some website themes and email services have responsive design elements built into them.
• Segmentation: Segmentation involves breaking down your overall audience or email list into smaller, targeted groups that your organization can market to directly. Some ways to segment your audience are by giving history (frequency and how long they’ve been a donor), lapsed donors, average gift size, program interest, and email inactivity.
• Search engine marketing (SEM): SEM is a method of promoting your website by increasing its visibility in search engine results via paid and unpaid traffic. SEM relies on search engine optimization (SEO) research to target the best, most relevant keywords and paid listings like AdWords. SEM differs from SEO in that it helps you target users in search via both paid advertising and organic optimization methods.
• Search engine optimization (SEO): SEO is a set of practices and techniques employed to boost the visibility of a website or page in unpaid, or “organic,” search engine rankings, such as Google. The higher a website appears in search results, the more likely the user is to click through to that site. Common SEO methods include using appropriate keywords, link building, and writing content that’s relevant to the target audience. SEO is considered a component of search engine marketing (SEM).
• Social fundraising: Also known as personal fundraising, peer-to-peer fundraising, or P2P, this method happens when nonprofits empower supporters to raise money on the organization’s behalf. Typically run as campaigns, it allows nonprofits to extend their reach far beyond their core network, raising awareness and attracting new donors. These campaigns center around a passionate desire to make an impact on a problem or cause and then “recruit” supporters based on a shared interest in the cause, the social momentum of the campaign, or in honor of the relationship with the original project sponsor.
• Social share: A social share is when someone shares pre-written content with their social networks. For example, after a donation is made, a follow-up page requests that you post a pre-populated status update on your Facebook page to show your social network that you support an organization.
• “Some years but unfortunately not this (year)” (SYBUNT): SYBUNT is an acronym for donors who gave “Some Year But Unfortunately Not This” (year). Depending on how long it’s been since they gave and how often, these supporters can be good prospects to reach out to during your year-end appeals.
• Tax ID number: A tax ID number (TIN) is any one of various identifying numbers used for tax purposes in the U.S. Your TIN could be your Social Security number, EIN, individual taxpayer identification number (ITIN), adoption taxpayer identification number, or a preparer tax identification number.
• Tax-deductible amount: This is the portion of a donation that a donor can claim as a deduction on their income tax return. Charitable donations must be paid in cash or as other property before the close of the tax year to be deductible. In general, donations to charities can be deducted up to 50% of adjusted gross income. However, some gifts to private foundations, veterans’ groups, and the like have lower limits.
• Text to give: Text to give is a way for people to make donations via a text message on their mobile device. The donor sees your call to action asking them to text a keyword to automatically give a certain amount to a cause. When the donor sends that text, the donation amount is added to their cellphone bill and the nonprofit receives the funds. Then, the organization sends a follow-up text to confirm and thank them for the donation.
• Transaction fee: The amount a payment processor deducts from each donation to cover its costs for acting as a financial intermediary. Typically this is a small percentage of each donation. Some payment processing systems allow donors to pay the transaction fee so the nonprofit receives the full amount of their donation.
• Unrestricted funds: Unrestricted funds are financial gifts that an organization may use as it sees fit. For instance, these funds may be used to offset operational expenses like rent, payroll, and utilities.
• Uniform resource locator (URL): In short, a URL is the address of any online page. You can usually skip typing “http://www.” when you enter a URL into a browser, but you do need to include the full URL when creating linked images or text. The “.com” part is called the extension; .com is for commercial enterprises and is by far the most common. Others include .org for nonprofits, .edu for educational institutions, and .gov for government-run websites.