A Funnel Cloud is a rotating column of air "not in contact with the ground". The same phenomenon, "with ground contact", is called a Tornado.
All funnel clouds should be reported as soon as it is safe to do so. Keep in mind that a funnel cloud can quickly turn into a tornado.
NOTE: There is no such thing as a funnel cloud on the ground!
A funnel cloud is a funnel-shaped cloud of condensed water droplets, associated with a rotating column of wind and extending from the base of a cloud (usually a cumulonimbus or towering cumulus cloud) but not reaching the ground or a water surface. A funnel cloud is usually visible as a cone-shaped or needle like protuberance from the main cloud base. Funnel clouds form most frequently in association with supercell thunderstorms.
If a funnel cloud touches the ground it becomes a tornado. Most tornadoes begin as funnel clouds, but many funnel clouds do not make ground contact and so do not become tornadoes. Also, a tornado does not necessarily need to have an associated condensation funnel—if strong cyclonic winds are occurring at the surface (and connected to a cloud base, regardless of condensation), then the feature is a tornado. Some tornadoes may appear only as a debris swirl, with no obvious funnel cloud extending below the rotating cloud base. A funnel cloud is quite noticeable as it passes overhead aloft. The sounds heard are described as buzzing bees, roaring, a sucking sound, or a waterfall-like sound. A pressure drop is often noticeable as well, in the form of popping ears in anyone below the funnel cloud. A funnel cloud that touches down on, or moves over water is a waterspout.