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.
Direct level work
Direct work can be described as interventions that deliver benefits, goods, and/or services to a specific group of beneficiaries. Examples can include supplying free breakfast clubs, or supplying malaria nets.
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.
Neglectedness
Cause area that receives less funding, attention, and/or research relative to the scale of problem. One example is animal welfare; many donors support sanctuaries or rescue centres, rather than factory farming which affects billions of animals and arguably causes greater suffering.
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 is usually achieved by influencing the ways others fund or tackle social issues/good causes.
Philanthropic risk
The certainty of achieving a result/impact. In other words, if you support the pilot of a new initiative, it would be considered higher risk as it has not been tested before. If you are supporting a well evidenced approach, it would be considered lower risk. This can apply to systems and direct work, but usually systems change is riskier.
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.
Systems level work (also known as systems change)
The aim is to change a system or element of a system (e.g. health) that, if successful, could benefit an entire population or group of beneficiaries and the way in which programs, services, and/or treatments are delivered. You often cannot see the full benefits until the change has happened, change takes longer to occur, and paths to success are complex. Examples include medical research, advocacy or policy change.
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.