A tribute gift is a gift made in honor, in memory, in the name of, or on behalf of another person or organization. An example would be if someone passes away and their family requests donations to your organization in lieu of flowers. Those gifts would be made as a tribute to the person who passed away.
The person or organization that the gift is made in tribute of does not need to be a constituent in the database. The Tribute option also allows you to include a constituent, new or existing, to receive notifications of all the gifts.