Practice Test Geeks(CED) Certified Executive Director Practice Test
← All CED Flashcard Decks

Nonprofit Governance & Compliance Flashcards

7 cards from real CED practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Nonprofit Governance & Compliance flashcards as text

  1. A nonprofit board member learns that the organization is about to enter a contract with a company she owns. What is the MOST appropriate action?

    Answer: Recuse herself and disclose the conflict in writing to the full board

    Board members must disclose conflicts of interest in writing and recuse themselves from related discussions and votes to satisfy fiduciary duty of loyalty.

  2. Which IRS form must most tax-exempt organizations with gross receipts of $200,000 or more file annually?

    Answer: Form 990

    Organizations with gross receipts ≥$200,000 or total assets ≥$500,000 must file the full Form 990 annually.

  3. What does the nonprofit governance principle of 'duty of care' require of board members?

    Answer: Acting in good faith with the diligence of a reasonably prudent person

    Duty of care obligates board members to make informed decisions with the judgment a reasonably prudent person would exercise in similar circumstances.

  4. A charity solicits donations without registering in a state that requires charitable solicitation registration. This is primarily a violation of:

    Answer: State charitable solicitation laws

    Most states require nonprofits to register before soliciting donations, and failure to do so violates state charitable solicitation statutes.

  5. An executive director wants to add a new board member who is also a major donor. Which governance concern is MOST relevant?

    Answer: Potential conflict of interest between donor interests and fiduciary duty

    A major donor serving on the board may face conflicts between personal financial interests and their fiduciary obligations to the organization.

  6. What is the primary purpose of a nonprofit's whistleblower protection policy?

    Answer: To protect employees who report suspected fraud or misconduct from retaliation

    Whistleblower policies protect staff and volunteers who report suspected illegal activity or policy violations from retaliation, a best practice encouraged by Sarbanes-Oxley.

  7. Which of the following activities could jeopardize a nonprofit's 501(c)(3) tax-exempt status?

    Answer: Endorsing a candidate for public office

    Section 501(c)(3) organizations are absolutely prohibited from participating in or intervening in political campaigns on behalf of or against any candidate.