Helpful definitions

Jargon is commonplace in all industries – the philanthropy world is not all that different.

As part of our series exploring How to Give Well, we are providing you with a list of common terminology and definitions that are frequently used by charities and donors.

We thought it might be useful to familiarise yourself with the language you may come across, or already have, in conversations with charities.

Cost-effective

Refers to a way in which something is effective or productive in relation to its cost. For charity giving, this often translates to the cost per outcome.

Counterfactual

The difference between the change a programme has made, and would have happened anyway. For example, people in a given area may be getting healthier, but what percentage is attributed to the project.

Effective

A charity’s ability to make a difference by achieving its intended outcomes from an activity.

ESG

Stands for Environmental, Social, and Governance factors. This is often used in sustainable and ethical investment strategies. May also include impact investing.

Evidence

Independently assessed proof that a programme or intervention works in its intended way.

Impact

The final, often long-term, positive result of a programme e.g. eradicating polio.

Impact investment

An investment designed to deliberately generate both a positive financial and social return.

Impact Report

A report that explains the counterfactual result of a programme or charity. It usually has facts and figures to demonstrate the difference a programme has made and case studies of success. Some impact reports may also include examples of projects that haven’t worked so well.

Impact spectrum

Mapped against financial investments to show how much social return is possible with each type of financial investment. It usually ranges from investment for purely financial return, to a donation.

Inputs

Resources that go into developing a program e.g. time and money.

Monitoring & Evaluation

Capturing and evaluating qualitative and quantitative data on programmes to understand if outputs have led to outcomes.  

Outcomes

Longer-term change as a result of a programme e.g. reduced rate of disease contraction.

Outputs

Measurable direct result of a programme e.g. how many vaccines were distributed.

Overhead costs

Administration and other costs unrelated to the direct cost of the programme. This is what a charity needs to carry out its work.  May include salaries, or monitoring & evaluation.

Philanthropic leverage

Achieving more, or maximising the impact of your contributions, with the same donation value. This can be by matched funding, pooled funding or impact investment.

Philanthropic risk

The amount of risk attached to your donation. For example, a pilot project may be higher risk as it’s trying something new, but may have greater impact.

Restricted funding

A donation that is limited for use in a specific programme or project by the donor. This is a strict definition, governed by charity accounting rules.

Scale-up

Expanding a programme to a larger geographic area or among a bigger group of beneficiaries. For example, making a regional pilot programme national.  

Social investment

Investment that does not generate a financial return, but generates a social or environmental return.

Sustainable Development Goals

A collection of 17 internationally agreed goals to achieve a better and more sustainable future for people and the planet. They are also called the Global Goals.

Theory of change

The strategy employed by a charity, linking inputs all the way to impact, like a roadmap for positive change.

Unrestricted funding

A donation that may be allocated at the discretion of the charity.