Glossary
An investing strategy based on anticipating market trends.
The status of a company or fund as for profit or non-profit.
An expense directly related to a program of the organization.
A term of art from Internal Revenue Code Section 4944 that refers to foundation investments (i) the primary purpose of which is to accomplish one or more of the foundation's exempt purposes, (ii) in which production of income or appreciation of property is not a significant purpose, and (iii) influencing legislation or taking part in political campaigns on behalf of candidates is not a purpose. A program-related investment (PRI) can take the form of equity, debt, guarantees, linked deposits, etc., and must be charitable in nature. PRIs are counted toward part of a private foundation’s annual distribution requirement (a 5% minimum). In the event repaid, investment returns are treated as PRIs, but the corpus is added back to the qualifying distribution requirement. Because PRIs are generally expected to be repaid, they can then be recycled into new charitable investments, increasing the leverage of the foundation's distributions.
A written or oral agreement to contribute cash or other assets to another entity. A promise to give may be either conditional or unconditional.
A document that evidences the funds that have been borrowed under the credit agreement.
Fixed assets used to house or help conduct the organization's activities, such as buildings, furniture, equipment, land, and natural resources.
An amount, including program-related investments and reasonable and necessary grant administration costs, a private foundation pays to accomplish religious, charitable, scientific, literary, or other public purposes. It is as defined in Section 4942(g) of the Code. Private foundations must distribute annually as a minimum qualifying distribution 5% of the average fair market value for the preceding year of all foundation assets that are not directly used for charitable purposes.
Quasi-equity refers to a category of debt that has equity-like qualities without conferring ownership rights to the investors. Quasi-equity can refer to an unsecured loan, a loan with a flexible repayment schedule, a repayable grant, or a royalty share financing vehicle.
Cash, marketable securities, and accounts receivable divided by current liabilities. This ratio focuses on an organization's more liquid assets, and answers the question "if revenue stopped coming in, could this organization meet its current obligations?" Sometimes called Acid Test.
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