If you’re new to grant writing, the language can feel like learning a whole new dialect. Acronyms show up everywhere. Terms get tossed around like everyone already knows what they mean. And honestly? Sometimes even people who've been at this a while still have to double-check.
At The Greater Sum, we believe language shouldn’t be a barrier to funding. So here’s a simple, grant-seeker-friendly guide to the most common terms you’ll run into, roughly in the order you’ll likely meet them.
501(c)(3)
What it means: This is the IRS tax-exempt status most funders require. Once you have it, you’re eligible for tax-deductible donations and most grant opportunities.
Why it matters: Without this, your grant options will be very limited.
Fiscal Sponsor
What it means: An established nonprofit that lets a newer project operate under its legal and tax-exempt status.
Why it matters: If you’re not yet a 501(c)(3), having a fiscal sponsor can open doors to funding while you get fully established. More and more new ventures are choosing to remain under fiscal sponsorship, or “management commons” to use an up-and-coming term.
RFP (Request for Proposals)
What it means: A funder puts out an open call for applications tied to a specific area of interest.
Why it matters: This is often how you’ll first hear about a grant opportunity. RFPs lay out exactly what the funder is looking for and how they want to receive proposals.
LOI (Letter of Inquiry)
What it means: A short letter (or sometimes an online form) introducing your organization and project to a funder.
Why it matters: Some funders use this as a first step to decide who they’ll invite to submit a full proposal. It’s your early chance to make a strong impression.
Logic Model
What it means: A chart or table that shows how your program works from resources to activities to results.
Why it matters: Some funders (especially government agencies) will ask for this to see how you plan to turn funding into outcomes. It doesn’t have to be complicated, but it does need to be clear.
Theory of Change
What it means: Your program’s big-picture explanation of how and why your work leads to meaningful change.
Why it matters: A Theory of Change connects the dots between what you do and the long-term difference you're aiming for. Some funders will ask for this alongside or instead of a logic model.
Outputs vs. Outcomes
Outputs: What you directly produce (e.g., 100 people attended your program).
Outcomes: The longer-term changes that happen as a result (e.g., participants increased their reading level, got jobs, stayed in school, etc.)
Why it matters: Funders want to see both, but outcomes carry more weight in demonstrating impact.
Capacity Building
What it means: Support that helps strengthen your organization through staff training, new technology, board development, or strategic planning.
Why it matters: Capacity-building grants help you build the infrastructure to deliver your mission more effectively over time.
General Operating Support
What it means: Flexible, unrestricted funding you can use for pretty much anything your organization needs.
Why it matters: This is often the most helpful kind of funding because it lets you cover real-life expenses like salaries, rent, or tech upgrades, not just project costs.
In-Kind Donation
What it means: Donations of goods or services instead of money.
Example: A law firm offering free legal work, or a printer donating event flyers.
Why it matters: These donations can stretch your budget and demonstrate community support.
Sustainability
What it means: Your ability to keep the program going after the grant period ends.
Why it matters: Funders want to see that you’re thinking ahead. How will you sustain the work once their funding runs out?
Final Thought: The Words Shouldn't Be the Hard Part
Learning the terminology is part of learning how to apply for grants but it shouldn’t feel like a secret code. The more familiar you get with these terms, the more confident you’ll feel sharing your work, planning your proposals, and having real conversations with funders.
At The Greater Sum, we work with nonprofit leaders who are learning as they go; breaking down the jargon, simplifying the process, and helping you build systems that fit your stage of growth. Feeling stuck? Sign up for our newsletter for resources you can actually use.
Anna Taylor is Executive Director of The Greater Sum Foundation. Under her leadership, Greater Sum has supported over 100 organizations through strategic funding, capacity-building tools, and a virtual incubator model focused on long-term impact and sustainability.
