CAP Ethics & Professional Standards in Philanthropic Advising

Question 1

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

Accepted Answer

The fiduciary standard of care

Answer

The suitability standard

Answer

The disclosure-only standard

Answer

The best execution standard

Question 2

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

Accepted Answer

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

Answer

Accept the fee as long as it is less than 1% of the donated amount

Answer

Decline charitable referral fees in all circumstances as prohibited by the CAP code

Answer

Accept the fee only if the client also receives a benefit from the arrangement

Question 3

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

Accepted Answer

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

Answer

Hourly fees for philanthropic planning services

Answer

Retainer arrangements paid by the nonprofit to the advisor

Answer

Compensation from both the donor and the charity with full disclosure

Question 4

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

Accepted Answer

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

Answer

Mediate between family members until consensus is reached

Answer

Represent the family's collective interests as determined by majority vote

Answer

Defer all philanthropic decisions until the family conflict is resolved

Question 5

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?

Accepted Answer

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

Answer

Advise the client to the best of current knowledge and update them if new information emerges

Answer

Decline to advise on any international matters as beyond the CAP scope

Answer

Research the issue independently and provide advice without disclosing the knowledge gap

Question 6

The ethical principle of confidentiality in philanthropic advising means that:

Accepted Answer

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

Answer

Donor information may be shared with recipient charities to facilitate grant processing

Answer

Advisors may anonymize client data and share it with colleagues for professional development purposes

Answer

Charitable gift amounts are confidential between advisor and client but may be shared with the charity's development office