Practice Test Geeks(CED) Certified Executive Director Practice Test
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Regulatory Compliance & Legal Framework 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 Regulatory Compliance & Legal Framework flashcards as text

  1. Which of the following constitutes 'private inurement' that could jeopardize a nonprofit's tax-exempt status?

    Answer: Transferring organizational assets to a board member at below-market value

    Private inurement occurs when an organization's net earnings benefit insiders, such as transferring assets at below-market rates to board members or executives.

  2. The Genetic Information Nondiscrimination Act (GINA) prohibits employers from using genetic information in:

    Answer: All employment decisions including hiring, firing, and compensation

    GINA prohibits the use of genetic information in all employment decisions, including hiring, firing, pay, promotions, and any other terms or conditions of employment.

  3. An executive director wants to enter into a multi-year lease agreement. Which governance step is MOST important before signing?

    Answer: Securing board authorization per the bylaws and applicable delegation authority

    Before committing to a significant long-term financial obligation, the executive director must ensure proper board authorization as specified in the organization's bylaws.

  4. The primary purpose of a compliance audit is to:

    Answer: Verify that the organization is operating according to laws, regulations, and internal policies

    A compliance audit systematically reviews whether an organization adheres to applicable laws, regulations, and its own internal policies and procedures.

  5. Under the Age Discrimination in Employment Act (ADEA), protections apply to workers who are:

    Answer: 40 years of age or older

    The ADEA protects individuals who are 40 years of age or older from discrimination based on age in hiring, promotion, discharge, compensation, and other employment terms.

  6. A 'sunset provision' in legislation or policy means that the law or policy:

    Answer: Automatically expires on a specified date unless renewed

    A sunset provision establishes an automatic expiration date for a law or policy, requiring affirmative renewal by legislators or policymakers to keep it in effect.

  7. Which scenario MOST likely creates an 'unrelated business income' (UBI) tax liability for a nonprofit?

    Answer: Operating a commercial parking lot open to the general public year-round

    UBI arises when a tax-exempt organization regularly conducts a trade or business that is not substantially related to its exempt purpose, such as a commercial parking lot serving the general public.