Ethics & Professional Standards in Philanthropic Advising Flashcards

The American College's CAP program grounds philanthropic advising in which standard of care that requires advisors to prioritize client interests above their own?

Answer: The fiduciary standard of care

CAP designees operate under a fiduciary standard, requiring them to act in the client's best interest, avoid conflicts of interest, and provide advice based on the client's philanthropic goals rather than advisor compensation.

A CAP advisor who receives a referral fee from a charitable organization for recommending clients to that organization should:

Answer: Disclose the fee arrangement fully to the client and consider whether it creates a conflict that compromises the recommendation

Full disclosure of any referral fees or compensation arrangements is required; the advisor must also evaluate whether the conflict can be adequately managed or requires declining the arrangement.

The NACGP Model Standards of Practice for the Charitable Gift Planner prohibit which compensation arrangement?

Answer: Transaction-based or percentage compensation tied to the size of a charitable gift

NACGP Model Standards prohibit compensation based on a percentage of the gift value—whether paid by the charity or the donor—because such arrangements create conflicts of interest that can harm donors.

When a CAP advisor is working with a client whose family members disagree about charitable giving priorities, the advisor's primary obligation is to:

Answer: Advocate for the philanthropic interests of the individual client who retained the advisor

The advisor's primary ethical obligation is to the individual client who retained them—not to other family members—while managing the process in a way that respects family dynamics and avoids unnecessary conflict.

Competency as an ethical obligation for CAP advisors requires which action when a client presents a complex international grant-making question outside the advisor's expertise?

Answer: Acknowledge the limits of expertise and refer to or collaborate with a specialist in international philanthropy and tax law

Competency requires advisors to recognize the limits of their expertise and collaborate with or refer to specialists rather than providing advice beyond their knowledge base.

The ethical principle of confidentiality in philanthropic advising means that:

Answer: Client information shared in the advisory relationship may not be disclosed without client consent, except as required by law

Confidentiality requires that all information shared in the advisory relationship—financial data, family dynamics, philanthropic intentions—is protected and not disclosed without client consent except as legally required.