CCD Budgeting, Fundraising, & Financial Management 2 — Questions and Answers
Question 1: A camp director discovers mid-season that supply costs are 20% over budget due to rising prices. What is the BEST immediate corrective action?
- Cancel remaining program activities to cut costs
- Revise the budget and identify offsetting savings in other line items (Correct answer)
- Borrow from next year's operating budget without board approval
- Increase all camper fees immediately to cover the shortfall
Correct answer: Revise the budget and identify offsetting savings in other line items
A mid-season budget revision that identifies offsetting savings maintains financial integrity without disrupting programs or requiring unauthorized fund transfers.
Question 2: Which financial document shows a camp's revenues and expenses over a specific accounting period?
- Balance sheet
- Cash flow statement
- Income statement (profit & loss) (Correct answer)
- Statement of net assets
Correct answer: Income statement (profit & loss)
The income statement (profit & loss statement) reports revenues and expenses over a defined period, showing whether the camp had a surplus or deficit.
Question 3: A nonprofit camp wants to launch its first major gifts program. Which prospective donors should be prioritized first?
- Local corporations with no prior connection to camp
- Alumni and past camper families with demonstrated giving history (Correct answer)
- National foundations with broad education mandates
- Government grant agencies in the state
Correct answer: Alumni and past camper families with demonstrated giving history
Donors with an existing emotional connection to the camp and a history of giving have the highest likelihood of making major gifts.
Question 4: What does 'unrestricted net assets' mean for a nonprofit camp?
- Funds legally prohibited from being spent on capital projects
- Funds available for any organizational purpose at the board's discretion (Correct answer)
- Endowment principal that must remain permanently invested
- Grants restricted to specific program uses
Correct answer: Funds available for any organizational purpose at the board's discretion
Unrestricted net assets can be used for any purpose the board deems appropriate, giving the organization maximum flexibility.
Question 5: A camp's accounts receivable aging report shows 35% of outstanding balances are more than 90 days overdue. What should the director do first?
- Write off all balances over 90 days as uncollectible
- Contact delinquent accounts to establish payment plans (Correct answer)
- Eliminate the payment plan option for future enrollments
- Transfer the accounts immediately to a collection agency
Correct answer: Contact delinquent accounts to establish payment plans
Contacting delinquent families to arrange payment plans is the appropriate first step, as many overdue accounts can be recovered through direct communication.
Question 6: Which budgeting method requires every expense to be justified from zero each budget cycle rather than using the prior year as a baseline?
- Incremental budgeting
- Rolling budget
- Zero-based budgeting (Correct answer)
- Activity-based budgeting
Correct answer: Zero-based budgeting
Zero-based budgeting requires managers to justify all expenditures from scratch each cycle, eliminating automatic carryover of prior-year amounts.
Question 7: A camp hosts an annual auction fundraiser. Which cost is typically classified as a direct fundraising expense?
- The executive director's annual salary
- Facility maintenance costs for the summer season
- Printing and mailing costs for auction invitations (Correct answer)
- Staff training costs for summer programming
Correct answer: Printing and mailing costs for auction invitations
Printing and mailing costs for auction invitations are direct fundraising expenses because they would not occur without the specific fundraising event.
CCD Budgeting, Fundraising, & Financial Management 2
A camp director discovers mid-season that supply costs are 20% over budget due to rising prices.
What is the BEST immediate corrective action?