Giving & impact-finance, in plain English
The language of giving and impact finance is full of jargon that quietly gatekeeps who gets to participate. Here's the vocabulary — recoverable grants, forgivable loans, trust deeds, blended finance — defined plainly, and tagged for who most needs it: givers, founders raising capital, and trustees deploying it.
48 terms
ACNCAustralian Charities and Not-for-profits Commission
The Australian Charities and Not-for-profits Commission — the national charity regulator and public register.
Additionality
Whether your money made something happen that wouldn't have happened anyway. The core test of catalytic capital — funding the deal the market skipped, not the one it would have done regardless.
Blended finance
Deals where philanthropic or public funders take early or concessional risk alongside private investors — using catalytic capital to unlock money that wouldn't otherwise flow to an impact venture.
Catalytic capital
Risk-tolerant, patient or concessional capital that accepts worse terms than the market to unlock impact others won't fund. Often the first money into a deal.
Concessionality
How far a funder gives up on return, time or liquidity to make a deal possible — the dial of 'how patient am I, how much upside will I forgo'. The essence of catalytic and philanthropic capital.
Convertible grant
A grant that lets an organisation develop a product or reach a milestone before raising investment. It can convert into equity or a loan later if the venture takes off.
Convertible note
Debt that converts into equity at a later date, normally when the company raises its next round.
Deductible Gift Recipient (DGR)DGR
The ATO status that lets an organisation receive tax-deductible donations. Not every charity has it — it's the difference between a gift being deductible or not.
Demand dividend
A convertible revenue-based agreement where investors are repaid through profit-sharing once the business can afford it.
Donor-advised fund (DAF)DAF · Sub-fund · Named fund
A named fund inside a host charity: you contribute, receive the tax deduction now, and recommend grants over time. In Australia this is usually a sub-fund under a Public Ancillary Fund.
Embeddedness
How deeply impact is built into a business model — impact that grows as the business grows, versus impact bolted on the side. Highly embedded ventures need less oversight to stay on-mission.
EndowmentCorpus
A permanent capital base where only the investment yield is spent, so the fund lasts indefinitely. The corpus is usually far larger than the annual grant budget.
ESGEnvironmental, Social and Governance
Environmental, Social and Governance factors used to screen investments for risk. Distinct from — and weaker than — impact investing: ESG avoids harm; impact investing sets out to create good.
Fiduciary duty
A trustee's legal obligation to act in the best interests of the charity's purpose. Often mis-read as 'maximise financial return', when the duty is actually to the mission the fund exists to serve.
Forgivable loan
A loan that converts into a grant if the borrower meets agreed conditions (often impact milestones). Used to support non-profits and social enterprises that couldn't take on ordinary debt.
Gift recycling
The core Elevate loop: beneficiaries who succeed pay it forward when they're able, returning capital to a shared pool that funds the next cohort. The same dollars stay active across many cycles.
Give while you live
Giving substantially during your lifetime rather than locking wealth into a foundation built to last forever — which often does more good, sooner.
Giving circle
A group that pools money and decides together where it goes — collective philanthropy at community scale.
GuaranteeGuarantor
A promise to cover a borrower's debt if they default. A guarantor lets an organisation borrow at a rate — or at all — that it otherwise couldn't reach.
Impact investing
Investments made with the intention to generate measurable social or environmental impact alongside a financial return. Elevate's giving side is philanthropic (no return); impact investing sits on the investing side of the line.
Impact measurement and management (IMM)IMM
The practice of tracking and improving the effect a venture has on people and the planet — not just measuring impact once, but managing toward more of it.
Impact thesis
A short, evidence-based statement of how an investment will create impact — the succinct version of a theory of change.
Impact track record
A venture's history of delivering against its stated impact goals — the evidence a funder leans on when milestones drive repayment or forgiveness.
Investment Policy Statement (IPS)IPS
The document setting how a foundation invests its corpus. It's the practical place you permit — or forbid — recoverable grants, PRIs and impact investments. Most IPS templates silently default to 'market-rate only'.
Mandate
The scope of what a fund is permitted to do. 'Unlocking your mandate' means amending the deed or IPS so the foundation can deploy recoverable, catalytic or impact-first capital by default — usually the real blocker to bigger funding, not willingness.
Mission-related investment (MRI)MRI
A market-rate investment from a foundation's endowment chosen to align with (or at least not undermine) its mission — the tool for the 'other 95%' most foundations never look at.
Outcome-based financing
A contract where the funder only pays once pre-agreed outcomes have actually been achieved, shifting delivery risk onto the provider.
Patient capital
Capital that accepts a long time horizon before any return — concessionality expressed as time rather than dollars.
Perennial Social Capital (PSC)PSC · Perpetual Social Capital
Elevate's model: philanthropic capital that circulates through a pool → beneficiary → pay-forward → pool → next beneficiary, instead of being spent once. A structural redesign of how giving flows.
Private Ancillary Fund (PAF)PAF · Private Giving Fund
Your own standalone charitable foundation in Australia. You control the trustee, must distribute at least 5% of assets a year, and can't fundraise from the public.
Private foundation
A US charitable entity funded by a single source (a family or company) that makes grants and must distribute roughly 5% of assets a year. The rough US analogue of an Australian PAF.
Program-related investment (PRI)PRI
A below-market investment a foundation makes primarily for mission, not return. In the US it can count toward the annual distribution requirement — a way to deploy corpus, not just grant income.
Public Ancillary Fund (PuAF)PuAF · Public Giving Fund
A charitable foundation that can raise from the public and usually hosts many donors' sub-funds (DAFs) under one umbrella structure.
R Factor
The share of recipients who pay it forward (typically 80–95%). It's the recycling analogue of a viral product's K-factor — the higher it is, the longer each dollar keeps giving.
Recoverable grant
A grant that is repaid to the funder only if the recipient hits pre-agreed milestones. If they don't, it stays a grant — the funder never loses their charitable status and takes no financial return. Repaid capital is recycled to fund the next recipient.
Redeemable equity
Shares the founder can buy back at a pre-agreed price or multiple — an equity-style deal with a built-in exit, so the funder isn't relying on an acquisition or IPO.
Revenue-based finance (RBF)RBF · Revenue-based financing
Funding repaid as a percentage of future revenue rather than fixed instalments, so repayments flex with the business instead of crushing it in a slow month.
SAFE (Simple Agreement for Future Equity)SAFE
An investment that converts into equity at the next priced funding round, with the major terms set later. A fast, founder-friendly early-stage instrument.
Single-use capital
Capital deployed once and spent — a traditional grant. Contrasted with recyclable or recoverable capital that can fund more than one recipient.
Social impact bondSIB
An outcomes-based contract that behaves like equity but links the funder's return to measured social impact rather than profit.
Spend policyDistribution policy · Payout rate
The rule for how much a foundation gives out each year — for example the Australian 5% minimum distribution for a PAF. It shapes how fast capital reaches the field.
Structured exit
A risk-capital deal where founder and funder agree the exit plan up front, rather than assuming a future sale or listing. Common in impact investing where a trade sale may never come.
System Value Multiplier (SVM)SVM
How much cumulative value each dollar generates as it recycles. At an 85% R Factor, $1 produces about $5.67 of giving over time; at 95%, roughly $20.
Technical assistance (TA)TA
Non-financial support — skills, capacity building, expertise — attached to funding, often delivered through a separate TA facility rather than as cash.
Theory of change
The logic linking what you fund to the outcome you want — your map from money to impact. The starting point for any serious giving or investing decision.
Traditional grant
A one-way gift with no expectation of financial repayment — the default philanthropic instrument. Deployed once and spent (single-use capital).
Trust deed
The founding legal document of a foundation or trust. It sets out what the fund can and can't do — including which kinds of capital it is permitted to deploy. Amending it is how a foundation unlocks recoverable or impact-first capital.
Trustee
A person legally responsible for governing a foundation or trust within the limits of its deed. Trustees decide whether the fund can deploy anything beyond traditional grants.
Instrument definitions draw on Aunnie Patton Power's Adventure Finance glossary, the definitive practitioner guide to innovative capital. We paraphrase and credit; her book goes far deeper.
New to all this? Start with the Giving Navigator or the giving guide. This glossary is educational, not financial or legal advice.