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www.charityexcelllence.co.uk © 2017
Charity Management Terms
These are only a simple aid to understanding, for those who may be unfamiliar with them. Some apply
more widely than common charity sector usage, others have no universally agreed definition, whilst
others have a precise technical meaning, which could only be condensed down by sacrificing accuracy.
Consequently, these cannot be relied upon and you should seek professional advice, if appropriate.
There are hyperlinks embedded to help you access more information, with other glossaries at the end.
A
Aged debtors report - is a list of all the invoices due that haven't yet been paid.
Appraisal - the process of assessing and developing the work performance of an employee. See also
investment appraisal below.
Asset Lock – ensures that the assets of a Community Interest Company (CIC) are only used for the benefit
of the community.
Avoidance – action to prevent a risk happening.
B
Back-up – duplicating the state, files and data of a computer system to use as a data substitute, if the
primary system data is corrupted, deleted or lost.
Balance Sheet - a financial statement that summarizes an organisation’s assets, liabilities and capital
(reserves) at a specific point in time.
Beneficiary – the people you seek to help; clients, service users or others.
Board – those who govern: may be called trustees, governors, directors or something else.
Brand – a brand is the essence or promise that a product, service or organisation will deliver or be
experienced by stakeholders.
Brand Guidelines – guidance on colour, typeface, logos, design etc, to ensure these are used consistently
across an organisation.
Budget - an estimate of costs, revenues, and resources over a specified period, reflecting an assessment
of future financial conditions and goals.
Business plan – often a one-year plan to achieve the charity’s objectives, driven by the strategy. May be
called an operations plan, or similar.

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C
Campaigning - awareness-raising and to efforts to educate or involve the public by mobilising their
support on a particular issue, or to influence or change public attitudes.
Capital expenditure – expenditures for fixed assets, expected to be productive for a long period of
time. It is charged to expense gradually via depreciation.
CCNI – the Charity Commission for Northern Ireland.
Charitable company – a company established under the Companies Act for exclusively charitable
purposes.
Charitable Purpose - To be a charity, an organisation must have purposes (or ‘aims’) all of which are
exclusively charitable.
Charity Governance Code - sets out the principles and recommended practice for good governance. It is
deliberately aspirational and is not a legal or regulatory requirement.
Charities (Protection and Social Investment) Act – relating to fundraising, is intended to protect people
from intrusive fundraising practices.
Companies Act - the main piece of legislation which governs company law in the UK.
Compliance – the extent to which organisations are aware of and meet the requirements of relevant laws,
policies and regulations.
Cost of living pay increase – a pay increase that offsets the impact of inflation on staff salaries. Sometimes
referred to as a Cost of Living Adjustment (COLA).
Conflict of interest - a situation in which an individual has competing interests or loyalties.
Contingency plan – is a plan for an outcome other than in the usual (expected) plan. It is often used for
risk management when an exceptional risk that, though unlikely, would have catastrophic consequences.
Crowd Funding – funding a project, or similar, by raising money from a large number of people who each
contribute a relatively small amount, usually via a web platform.
Culture - the collective values, traditions, beliefs, interactions, behaviours, and attitude of the people in
your organization.
Cyber security – the technologies, processes and practices designed to protect networks, computers,
programmes and data from attack, damage or unauthorized access.
D

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Data protection - all organisations that collect, process or store personal information must safeguard
personal information and ensure it is managed properly.
DBS - The Disclosure and Barring Service helps organisations to make safer recruitment decisions and
prevent unsuitable people from working with vulnerable groups.
Delegation – giving responsibility or authority to another person (normally from a manager to a
subordinate) to carry out specific activities.
Designated funds – unrestricted funds set aside by trustees for a future purpose, which are expendable at
their discretion.
Digital – in common usage terms, essentially web/social media, but has various interpretations, including
technology and new ways of engaging stakeholders.
Disaster recovery - A disaster recovery plan (DRP) is a documented process to recover and protect an
organisation’s IT infrastructure in the event of a disaster.
Dividend Cap – ensures the majority of a Community Interest Company’s (CIC) profits are applied for
community benefit.
Due diligence – a risk assessment of an organisation or person prior to signing a contract, or other
agreement, or accepting a donation/support.
E
Effectiveness - the ability to be successful and produce the intended results. Doing the right thing.
Efficiency - the ability to do things well, with minimum cost in terms of resources, time and money. Doing
the thing right.
Emphasis of matter – a statement included in an auditors' report indicating a substantial uncertainty or
other matter, which the auditor considers is significant or important.
Endowment – a permanent endowment is assets (including land, buildings, cash or investments) which
may not be spent as if it were income. It must be held permanently. An expendable endowment is a fund
that must be invested to produce income.
Engagement – the extent to which individuals are committed to and motivated by an organisation.
Environmental scanning – monitoring the external world to identify emerging threats and opportunities.
Equality Act 2010 - legally protects people from discrimination in the workplace and in wider society. It
replaced previous anti-discrimination laws.
Ex Gratia payment – trustees believe they have a moral, but not legal obligation to make a payment.

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Excepted charities - don’t have to register or submit annual returns to the Charity Commission, but are
otherwise regulated by the Commission.
Exempt charities – are exempt from registration and regulation by the Charity Commission, but are
required to have a principal regulator.
Exit interview - is conducted with an employee who leaves the organisation to provide feedback on why
staff are leaving, what they liked about their employment and what areas need improvement.
F
Fire risk assessment – an assessment of any non-domestic premises, including measures to reduce or
eliminate the risk of fire, and identify persons at risk.
Free reserves – the total unrestricted funds on the balance sheet, excluding any designated reserves.
Fundraising Code of Practice – and its associated rule books outline the standards expected of UK
charitable fundraising organisations.
G
GDPR – The EU General Data Protection Regulation comes into force in May 2018 and will subsequently
strengthen the Data Protection Act.
Gift Aid - a scheme enabling registered charities to reclaim tax on a donation made by a UK taxpayer,
effectively increasing the amount of the donation.
Governance - the Board’s responsibilities in setting the strategic direction and culture of the organisation
and ensuring it is well lead and managed to achieve its charitable objectives.
Governing document - sets out an organisation’s purpose and, usually, how it is to be administered; a
memorandum and articles of association or other formal document.
H
Health and Safety at Work Act 1974 - the primary legislation covering occupational safety, which places a
duty on all organisations to ensure this, so far as is reasonably practicable.
High Net Worth – also known as major donor. Someone with the financial capacity to make a very large
donation. How much that might be varies from charity to charity.
Hierarchy of messages – a prioritised list of your key messages that are used consistently in your
communications. Your brand expressed succinctly in words.
House style – guidance on how words and acronyms etc are used to ensure a consistent written style
across an organisation.

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Human resource management - the systems implemented to for managing people within an organization.
I
ICO – The Information Commissioner’s Office is the independent authority set up to uphold information
rights in the public interest and data privacy for individuals.
Impact – the long-term difference that charities make and the change they create for the people they
help, in delivering their mission.
Independent examiner - an independent person who is reasonably believed by trustees to have the ability
and experience to carry out a competent examination of its accounts.
Innovation – creativity is the ability to generate ideas, innovation is turning these into practical solutions
and implementing these in a way that is both novel and useful.
Intellectual property – a category of property that includes intangible creations of the human intellect,
and primarily encompasses copyrights, patents, and trademarks.
Inventory management – managing inventories to ensure stock levels are always adequate to meet
ongoing needs, at minimum cost.
Investment appraisal – an assessment of the costs (financial and non-financial), benefits and risks of a
proposal.
L
Liquidity - A measure of the extent to which a person or organization has cash to meet immediate and
short-term obligations, or assets that can be quickly converted to do this.
Lobbying – the act of trying to influence the votes of MPs or peers by pressure groups, constituents or
colleagues.
M
Malware - software which is specifically designed to disrupt, damage, or gain authorized access to a
computer system.
Materiality – in finance, an item that if misrepresented or not included, might reasonably be expected to
mislead those using the accounts. Am immaterial item would not.
Mission – a short statement of your organisation’s purpose.
Mission drift – the tendency over time for organisations to drift from their core mission, due to competing
priorities, such as the need to secure funding.

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Mitigation – action to minimize the impact a risk would have, if it happened.
Modified Audit Opinion – the financial statements do not show a ‘true and fair’ view in all material
respects.
O
OSCR – the Office of the Scottish Charity Regulator
Outcome – the direct change created, because of what you do, for the people or issues you support.
Shorter term than charitable impact.
Outsourcing services – engaging another organisation to performs tasks or provide services that might
otherwise be carried out in-house.
Overheads - expenditure which cannot be specifically identified with a particular activity, such as rent and
insurance. But, there are both direct and indirect overheads.
Oversight – ensuring the organization is well managed, complies with the law and staff are held
accountable.
P
Personal benefit - is a benefit that an individual or organisation receives from a charity.
Personal development plan - an action plan based on awareness, values, reflection, goal-setting
and planning for personal development within the context of a career, education, or for self-
improvement.
Person of Significant Control (PSC) Register – list of individuals or legal entities that have specific powers,
which give them significant control over a company.
PEST – assessing key factors in the outside world Political, Economic, Sociological and Technological; also,
PESTLE. The Resource Base includes a template specifically designed for charities.
Petty cash - Relatively small amount of cash kept at hand for making immediate payments for
miscellaneous small expenses.
Pipeline – the donors ‘in the pipeline’ - the numbers and amounts of donations that are realistically
expected in the future.
Prospect – an individual or organisation who may potentially be open to being converted to a donor.
Prospect research – a fundraising technique used to evaluate a prospect's ability to give (capacity) and
warmth (affinity) toward an organisation.

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Public benefit – for an organisation to be a charity, each of its purposes must be for the public benefit.
That is beneficial and available to a sufficient section of the public.
Public interest disclosure – the technical term for whistleblowing.
R
Reconciliation - is an accounting process that uses two sets of records to ensure figures are correct and in
agreement.
Register of interests- provides information about an individual, which others might reasonably consider
could influence his or her actions.
Regulator – numerous bodies, including charities, fundraising, finance, data protection, the environment,
gambling, advertising and H&SW, plus others for specialist areas.
Reserved powers - are matters which are dealt with only by the Board and are not delegated.
Reserves – funds kept in reserve to strengthen resilience against, for example, drops in income or to take
advantage of new opportunities.
Restricted funds – funds which can only be used for a specific charitable purpose.
Risk appetite – the type and degree of risk that an organisation is willing to accept.
Risk management – the process of identifying, assessing and managing risks
S
Safeguarding - the action taken to promote the welfare of vulnerable people and protect them from
harm.
Shadow director – some not appointed as a director, but whose instructions the directors are accustomed
to following.
Senior team – the most senior staff, often the CEO and directors. They are responsible to the trustees.
Serious incidents – must be reported to the Charity Commission. An adverse event, whether actual or
alleged, which results in or risks significant loss, damage or harm.
Social media - websites and applications, such as Twitter, that enable users to create and share content or
to participate in social networking,
Social media analytics – the collection of data from web and social media sites and evaluating this to make
decisions. There are a range of free tools available.

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Statutory funding – usually contracts, from UK central, local and devolved administrations, international
bodies, and overseas governments.
Strategic risk - risks that could impact on the organisation's ability to achieve its
strategy and strategic objectives.
Strategy – a high level plan to achieve long-term objectives, focused on the organisation’s mission.
Stakeholders – a person with an interest or concern, such as beneficiaries, staff, volunteers and funders.
Sustainability – meeting current needs, whilst ensuring the long-term future of the organisation.
SWOT – evaluating strengths, weaknesses, opportunities and threats. The opportunities and threats, are
the key issues from a PEST, or similar, analysis.
T
Tainted donations – arise when a donor or their representative obtain a financial advantage for
themselves, in return for their donation; usually tax related.
Terms of reference – define purpose, organisation, membership and responsibilities for committees.
Tone of voice – not what your organisation says, but how – the impression you create about how you are
in terms of your formality, respectfulness, humour and enthusiasm.
Trading - buying and selling goods and/or services. In primary purpose trading a charity will not pay tax
on its profits, because trading earns money to help achieve the charity's aims and objectives. Secondary
trading does not.
Trustees – the people who share ultimate responsibility for governing a charity and directing how it is
managed and run. May be called the Board, management committee, governors, directors or something
else.
U
Unrestricted funds – funds which can be used for any charitable purpose.
Upside risk – the risk that an outcome has a positive benefit, rather than a negative one.
V
Values - important and lasting beliefs or ideals shared by the members of a culture about what is good or
bad and desirable or undesirable.
Value for Money - achieving the best possible value in using resources, based on economy, efficiency and
effectiveness.

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Vicarious Liability - in the context of running a charity, means the charity or its trustees being liable for the
wrongdoing of others.
Vision - an aspirational description of what your organization would like to achieve in the long-term
future.
W
Whistleblowing - the act of telling the authorities or the public that an organisation is doing
something immoral or illegal. The wrongdoing you disclose must be in the public interest.
Useful Links:
Charity Commission Glossary of Terms used in Operational Guidance
NfP Accountants: Accounting Terms for Charities
Charity SORP Glossary of Terms
Law Society - Legal Glossary
TPP - Fundraising Glossary
Care & Support Jargon Buster – Health and Social Care
Get Safe Online – Technology Jargon Buster
ICO Data Protection Key Definitions
NCSC Cyber Security Glossary - Infographic
THSP Glossary of H&SW
Co-Communications PR/Marketing Glossary
Ethical Property Jargon buster
This resource is from the Charity Excellence Framework, a low cost, low workload platform that anyone
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Charity Management Terms Explained in Plain English

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Charity Management Terms Explained in Plain English