CED Professional Standards & Ethics 4

Question 1

Which document most directly governs how a nonprofit must use restricted grant funds in alignment with donor intent?

Accepted Answer

The grant agreement or gift instrument

Answer

The grant agreement or gift instrument is the legally binding document that specifies how restricted funds must be used.

Question 2

Professional ethics in nonprofit management require that an ED avoid using organizational information for personal benefit. This principle is best described as:

Accepted Answer

Duty of loyalty

Answer

The duty of loyalty prohibits self-dealing, including using privileged organizational information for personal financial advantage.

Question 3

An organization's whistleblower policy should include which key protection?

Accepted Answer

Protection from retaliation for good-faith reports of suspected wrongdoing

Answer

The essential component of a whistleblower policy is protection from retaliation for employees who report suspected misconduct in good faith.

Question 4

When an executive director recuses themselves from a board vote due to a conflict of interest, they should:

Accepted Answer

Leave the room before discussion begins and the vote occurs

Answer

Full recusal means leaving both the discussion and the vote to ensure the conflicted party does not influence the outcome in any way.

Question 5

A grant-funded program is producing minimal impact data. The ED should ethically respond by:

Accepted Answer

Transparently communicating results to the funder and discussing program adjustments

Answer

Honest reporting to funders, even when outcomes are poor, maintains trust and allows for collaborative problem-solving rather than deceptive grant management.

(CED) Certified Executive Director Practice Test

(CED) Certified Executive Director Practice Test

CED Professional Standards & Ethics 4