What is a charity?

No matter if you are a teenager volunteering, or an adult donating money, before you invest in a charity or an organization you should do some research about it.

What is it's mission statement?

Does it sound like an organization that you want to support?

When researching those organizations, you will see some terms that may be unfamiliar.

We have included some terms and their definitions on the right.


A charity can encompass religion, education, assistance to the government, promotion of health and the arts, or relief from poverty

Mission Statement

The mission statement is the organization's center. Mission statements usually include a phrase describing the methods the organization will use to accomplish it's purpose.  The purpose drives the organizations fundraising efforts and program planning.  The organization needs to have their mission statement formulated before they apply for tax-exempt status.


Tax-exemption is a classification granted by the Internal Revenue Service to a qualified nonprofit organization. It frees them from the requirement to pay taxes on their income. They are recognized as exempt from federal taxes under Section 501(c)(3) of the Internal Revenue Code. An organization must apply for tax-exemption status from the Internal Revenue Service. If everything is in order the IRS will respond with a letter of determination stating that it has determined the organization qualifies as a tax-exempt organization under the applicable section of the IRS code.

Board of Directors 

The board of directors is a group of people who have agreed to accept responsibility for a nonprofit organization. The board of directors will have a president and other officers, usually including a vice-president, a secretary and a treasurer. Board members almost always serve without compensation or pay. They are volunteers and have no financial interest in the nonprofit's business. The board of directors will meet regularly to make decisions about the organization, to set policies to be used by the staff or volunteers and to oversee the nonprofit's activities.


A nonprofit is a term describing the Internal Revenue Service's designation for organizations whose income is not used for the benefit or private gain of any owners of the charity. A nonprofit organization's income is used to support its operations and further its stated mission. Sometimes it is referred to as an NPO.


A foundation is a non-governmental, nonprofit organization with funds and a program managed by its own trustees and directors. A foundation is established to further social, education, religious or charitable activities by making grants.


A grant is monetary or financial assistance granted by a government or nonprofit foundation to a person or association for the purpose of promoting an enterprise considered beneficial to the public welfare.


Fundraising is the term referring to the process of soliciting and gathering money by requesting donations from individuals, businesses, charitable foundations, or governmental agencies.