Certified Fund Raising Executive (CFRE) — Questions and Answers

Question 1: What is the primary purpose of an annual fundraising plan?

To determine staff bonuses
To replace the need for a strategic plan
To report to the IRS on charitable activities
To outline goals, strategies, timelines, and resources for all fundraising activities over the coming year (Correct answer)

Correct answer: To outline goals, strategies, timelines, and resources for all fundraising activities over the coming year

An annual fundraising plan provides a roadmap covering revenue goals, fundraising strategies, timelines, and staffing to guide all development activities for the year.

Question 2: What is 'prospect research' designed to uncover?

Publicly available tax records of all nonprofit donors
Social media activity of potential volunteers
A donor's capacity, affinity, and propensity to give (Correct answer)
Competitive intelligence on other nonprofits' donor lists

Correct answer: A donor's capacity, affinity, and propensity to give

Prospect research gathers information about a prospect's wealth indicators, connection to the cause, and likelihood to give to prioritize cultivation.

Question 3: A fundraiser discovers a staff member has been submitting inflated expense reports. The FIRST action the fundraiser should take is:

Ignore it unless the amounts exceed a material threshold
Alert donors who may be affected by the financial irregularity
Report the suspected misconduct to the appropriate supervisor or through the organization's established reporting mechanism (Correct answer)
Confront the staff member privately before involving leadership

Correct answer: Report the suspected misconduct to the appropriate supervisor or through the organization's established reporting mechanism

Ethical practice requires reporting suspected financial misconduct through appropriate organizational channels immediately — not handling it informally or ignoring it.

Question 4: A 'board fundraising matrix' or 'give/get policy' typically outlines:

Each board member's personal giving expectation and/or the amount they are expected to help raise (Correct answer)
How often board members must attend donor events
The board's investment portfolio allocation
The organization's grant deadline calendar

Correct answer: Each board member's personal giving expectation and/or the amount they are expected to help raise

A give/get policy clarifies financial expectations for board membership, specifying a personal contribution minimum and/or a fundraising goal that each member should help meet.

Question 5: Which tool is most useful for tracking a fundraiser's portfolio of major gift prospects?

An event registration platform
A moves management system or CRM tracking cultivation stage, last contact, and planned next steps (Correct answer)
A social media content calendar
A direct mail merge template

Correct answer: A moves management system or CRM tracking cultivation stage, last contact, and planned next steps

A CRM or moves management system enables fundraisers to track where each major gift prospect is in the cultivation cycle and plan strategic next contacts.

Question 6: What is a 'naming opportunity' in major gift fundraising?

The practice of listing all donors in an annual report
A chance to rename the organization
A strategy for anonymous giving
An opportunity to name a building, room, or program in honor of a donor in exchange for a significant gift (Correct answer)

Correct answer: An opportunity to name a building, room, or program in honor of a donor in exchange for a significant gift

Naming opportunities recognize major donors by associating their name with a physical space, endowment, or program in exchange for a leadership-level gift.

Question 7: Which of the following is a warning sign that a board may be disengaged from fundraising?

Board members regularly introduce the development director to their contacts
The board chair makes the largest gift in the campaign
Less than 100% board participation in personal giving, no board member involvement in cultivation, and passive meeting attendance (Correct answer)
The board approves an annual fundraising plan

Correct answer: Less than 100% board participation in personal giving, no board member involvement in cultivation, and passive meeting attendance

Low personal giving rates, absence from cultivation activities, and passive meeting attendance are classic indicators that the board is not genuinely engaged in its fundraising responsibilities.

Question 8: Abbreviation for "last year but not this year" donors.

Planned Giving
Feasibility Study
Lybunts (Correct answer)
Support Services

Correct answer: Lybunts

LYBUNT is a common acronym in fundraising that stands for 'Last Year But Unfortunately Not This Year.' It categorizes donors who made a contribution in the previous year but have not yet given in the current year. Identifying LYBUNT donors is crucial for targeted re-engagement strategies to encourage renewed support.

Question 9: Which metric is most useful for measuring donor stewardship effectiveness?

Average cost per event attendee
Total number of social media followers
Donor retention rate year over year (Correct answer)
Number of grant applications submitted

Correct answer: Donor retention rate year over year

Donor retention rate directly measures how successfully an organization stewards and retains its donors from one year to the next.

Question 10: According to AFP's Code of Ethical Principles, which practice is explicitly prohibited when compensating fundraising professionals?

Offering equity participation in the nonprofit
Paying a base salary plus performance bonus
Reimbursing travel and lodging expenses
Paying a percentage commission based on funds raised (Correct answer)

Correct answer: Paying a percentage commission based on funds raised

The AFP Code of Ethical Principles prohibits percentage-based compensation (commission) for funds raised, as it creates conflicts of interest and can distort donor relationships.

Question 11: What does 'philanthropy' literally mean in its Greek origin?

Generous spirit
Love of humanity (Correct answer)
Gift to the gods
Public charity

Correct answer: Love of humanity

Philanthropy derives from the Greek 'philanthropia,' combining 'philos' (loving) and 'anthropos' (human being), meaning love of humanity.

Question 12: Which document must US nonprofit organizations file annually to maintain public accountability?

IRS Form 990 (Correct answer)
IRS Form 940
IRS Form W-2
IRS Form 1099-MISC

Correct answer: IRS Form 990

IRS Form 990 is the annual information return required of most US tax-exempt organizations and is publicly available, providing transparency to donors and the public.

Question 13: The primary purpose of a gift acceptance policy is to:

Limit the types of donors who can contribute to the organization
Establish guidelines for which types of gifts the organization will accept and how they will be valued (Correct answer)
Set minimum gift amounts for board members
Determine how gifts will be spent once received

Correct answer: Establish guidelines for which types of gifts the organization will accept and how they will be valued

A gift acceptance policy provides a framework for evaluating non-cash, complex, or potentially problematic gifts to protect the organization from liability and ensure alignment with its mission.

Question 14: A donor who has given every year for 5 or more consecutive years is typically categorized as which type of donor?

Major donor
Prospect
Loyal or consecutive donor (Correct answer)
Lapsed donor

Correct answer: Loyal or consecutive donor

Donors who give consecutively for multiple years are classified as loyal or consecutive donors and are prime candidates for upgrade and major gift conversations.

Question 15: When conducting a feasibility study for a capital campaign, the consultant's primary role is to:

Develop the case for support document
Assess community readiness and gauge donor capacity and inclination (Correct answer)
Train the volunteer leadership team
Solicit lead gifts from top prospects

Correct answer: Assess community readiness and gauge donor capacity and inclination

A feasibility study consultant's primary role is to objectively assess whether the community has the willingness and financial capacity to support the proposed campaign goal.

Question 16: In a fundraising context, 'diversification of revenue streams' is important because:

It allows the organization to spend more on administration
It reduces the need for donor stewardship
It increases the number of staff needed in the development office
It protects the organization from financial risk if any single funding source declines (Correct answer)

Correct answer: It protects the organization from financial risk if any single funding source declines

Revenue diversification reduces dependency on any single funding source, making the organization more financially resilient if grants, events, or major gifts fluctuate.

Question 17: What is the most common reason donors lapse (stop giving) to an organization?

They were never properly thanked or felt unappreciated (Correct answer)
They moved to a different geographic area
They switched to a competing nonprofit
They reduced their personal charitable budgets

Correct answer: They were never properly thanked or felt unappreciated

Studies consistently show that donors lapse most often because they felt unappreciated or undervalued — poor stewardship is the top driver of attrition.

Question 18: What is a 'bequest society' in planned giving?

A legal entity that holds planned gift assets in trust
A committee that approves all estate gifts over a certain threshold
A special investment fund for planned gift proceeds
A recognition program for donors who have notified the organization of their intention to include the charity in their estate plan (Correct answer)

Correct answer: A recognition program for donors who have notified the organization of their intention to include the charity in their estate plan

A bequest society (or legacy society) acknowledges and recognizes donors who have made or expressed intention to make a planned gift, helping to cultivate and retain these long-term relationships.

Question 19: Which year was the Association of Fundraising Professionals (AFP) originally founded?

1963
1960
1954 (Correct answer)
1971

Correct answer: 1954

AFP was founded in 1954 as the National Society of Fund Raisers, later rebranded to its current name.

Question 20: Delivery of informational materials via mass mailing and requests for donations or volunteer work.

both unrestricted gift and direct mail (Correct answer)
unrestricted gift
renewal mailing
direct mail (Correct answer)

Correct answer: both unrestricted gift and direct mail

The definition clearly describes "direct mail" as a method of communication involving mass mailing for soliciting donations or volunteers. While the question asks for the delivery method, the context of fundraising often implies the type of gift sought. An "unrestricted gift" is a common goal of such broad solicitations, as it allows the organization maximum flexibility in using the funds. Therefore, both terms are relevant to the described activity.

Question 21: What is 'capacity' in the context of major gift prospect research?

The organization's capacity to manage a capital campaign
The size of the organization's prospect database
The estimated financial ability of a prospect to make a significant charitable gift (Correct answer)
The donor's ability to volunteer time

Correct answer: The estimated financial ability of a prospect to make a significant charitable gift

In prospect research, capacity refers to the estimated wealth and financial ability of a prospective donor to make a major gift, assessed through public records, wealth screening, and other sources.

Question 22: In planned giving, what is a 'bequest intention' document?

A non-binding letter stating a donor plans to leave a gift to a nonprofit in their will (Correct answer)
An irrevocable trust document naming a charity as beneficiary
A legally binding contract guaranteeing a future estate gift
A codicil added to a donor's existing will

Correct answer: A non-binding letter stating a donor plans to leave a gift to a nonprofit in their will

A bequest intention is a non-binding statement of intent—valuable for counting in gift tables but not legally enforceable by the charity.

Question 23: Which of the following is the correct sequence for conducting a capital campaign?

Campaign planning → public phase → silent phase → feasibility study
Public phase → silent phase → campaign planning → feasibility study
Silent phase → feasibility study → public phase → campaign planning
Feasibility study → campaign planning → silent phase → public phase (Correct answer)

Correct answer: Feasibility study → campaign planning → silent phase → public phase

Capital campaigns follow a structured sequence: feasibility study first, then campaign planning, followed by the quiet/silent phase to secure lead gifts, and finally the public phase.

Question 24: Which compensation arrangement is considered unethical by the AFP Code of Ethical Standards?

Hourly consulting fees for campaign planning
Percentage-based compensation tied directly to the amount of funds raised (Correct answer)
A base salary plus performance bonus tied to organizational metrics
Annual salary with a cost-of-living increase

Correct answer: Percentage-based compensation tied directly to the amount of funds raised

Percentage-based compensation for fundraisers is considered unethical because it can incentivize coercive solicitation and undermine donor trust.

Question 25: Which fundraising metric measures how much revenue is generated for every dollar spent on fundraising?

Cost per dollar raised (CPDR)
Fundraising efficiency ratio
Return on investment (ROI) (Correct answer)
Donor acquisition cost

Correct answer: Return on investment (ROI)

ROI in fundraising context measures net revenue relative to fundraising expenditure, indicating program efficiency.

Question 26: A mailing to potential funders or prospective members.

acquisition mailing (or prospect mailing) (Correct answer)
acknowledgment letter
telephone - mail campaign
sequential giving

Correct answer: acquisition mailing (or prospect mailing)

The definition accurately describes an "acquisition mailing," also known as a "prospect mailing." This type of direct mail campaign is specifically designed to reach new, potential donors or members who have not previously supported the organization. Its goal is to "acquire" new supporters by introducing them to the cause and soliciting their initial contribution.

Question 27: Under AFP ethical standards, a fundraiser who learns of illegal activity within their organization should:

Report it through appropriate channels, which may include legal authorities (Correct answer)
Keep it confidential as part of professional loyalty
Ignore it to protect organizational reputation
Only disclose it after leaving the organization

Correct answer: Report it through appropriate channels, which may include legal authorities

AFP ethics standards require fundraisers to report illegal activities through proper channels to uphold accountability and protect the public trust.

Question 28: What role does a 'case for support' play in donor stewardship?

It is used only for government grant applications
It serves as the foundational document articulating why donors should invest in your mission (Correct answer)
It is required by the IRS for tax-exempt status
It replaces the need for personal cultivation meetings

Correct answer: It serves as the foundational document articulating why donors should invest in your mission

The case for support communicates the organization's mission, need, and impact, providing the emotional and rational foundation for all donor cultivation and solicitation.

Question 29: Which of the following donor segments should typically receive the highest level of personal stewardship attention?

Lapsed donors from five or more years ago
Online-only annual fund donors
First-time small gift donors
Major gift donors and planned giving prospects (Correct answer)

Correct answer: Major gift donors and planned giving prospects

Major gift donors and planned giving prospects represent the highest revenue potential and require the most personalized, relationship-intensive stewardship investment.

Question 30: A 'named gift opportunity' is primarily used to:

Recognize anonymous donors without revealing their identity
Incentivize major gifts by offering naming rights to a space or program (Correct answer)
Name a fundraising campaign after the executive director
Identify grant opportunities by funder name

Correct answer: Incentivize major gifts by offering naming rights to a space or program

Named gift opportunities allow donors to attach their name (or a loved one's name) to a building, room, fund, or program in exchange for a major gift, providing tangible recognition.

Question 31: Which strategy is most effective for upgrading mid-level annual fund donors to a higher giving level?

Removing them from the direct mail program entirely
Making a personal phone call with a tailored ask amount (Correct answer)
Sending them the same mass appeal as all other donors
Asking them to volunteer instead of donate

Correct answer: Making a personal phone call with a tailored ask amount

Personalized outreach such as a phone call with a specific ask amount tailored to the donor's capacity is the most effective upgrade strategy for mid-level donors.

Question 32: What is '100% board giving' and why is it important?

Board members collectively raise 100% of the annual budget
Every board member makes a personal financial contribution, regardless of size, demonstrating commitment to the organization (Correct answer)
100% of board meetings must include a fundraising agenda item
Every board member must give the same dollar amount

Correct answer: Every board member makes a personal financial contribution, regardless of size, demonstrating commitment to the organization

100% board giving means all board members contribute personally, which signals organizational credibility and is often required by foundations and major donors as a prerequisite for their own gifts.

Question 33: Which metric helps evaluate the health of a direct mail program?

Number of volunteers at events
Response rate, average gift size, and net revenue per piece mailed (Correct answer)
Social media engagement rates
Board meeting attendance rates

Correct answer: Response rate, average gift size, and net revenue per piece mailed

Direct mail program health is assessed through response rate (percentage of recipients who donate), average gift size, and net revenue generated per piece mailed.

Question 34: In a capital campaign, the 'quiet phase' refers to:

The final wrap-up after the public goal is met
The period when no solicitations are made to avoid donor fatigue
Silent auction fundraising events held during the campaign
Confidential solicitation of lead gifts before the public announcement (Correct answer)

Correct answer: Confidential solicitation of lead gifts before the public announcement

The quiet (or silent) phase of a capital campaign involves soliciting major and lead gifts from top prospects before the public launch, typically targeting 50–70% of the goal during this phase.

Question 35: In planned giving, a Charitable Remainder Trust (CRT) provides what benefit to the donor during their lifetime?

Income payments to the donor or named beneficiary for life or a term of years (Correct answer)
An immediate full deduction equal to the donated asset's fair market value
Avoidance of all estate taxes on the donated assets
Guaranteed principal protection on the trust's investment portfolio

Correct answer: Income payments to the donor or named beneficiary for life or a term of years

A CRT pays income to the donor or their beneficiaries for life or a set term, with the remainder passing to the charity at termination.

Question 36: Under IRS rules, what is the maximum gift amount a donor can give to a public charity before needing a written acknowledgment to claim a deduction?

$250 (Correct answer)
$500
$1,000
$100

Correct answer: $250

Donors need a written acknowledgment from the charity for any single contribution of $250 or more to substantiate their deduction.

Question 37: What is a 'named gift' in philanthropic fundraising?

A donation large enough to name a building, room, or program after the donor or honoree (Correct answer)
A pledge where the donor's name appears on all campaign materials
Any gift made in memory of a deceased individual
A recurring gift tied to the donor's name through a branded fund

Correct answer: A donation large enough to name a building, room, or program after the donor or honoree

Named gifts are typically major donations that secure naming rights to a facility, endowed fund, or program in recognition of the gift.

Question 38: A fundraiser discovers that a longtime donor's capacity has dramatically increased following an inheritance. What is the most appropriate next step?

Remove the donor from the annual fund and transfer them to a major gift portfolio without notification
Update the donor's prospect rating and develop a personalized cultivation strategy before soliciting (Correct answer)
Immediately send a major gift solicitation letter
Alert board members to solicit the donor at the next event

Correct answer: Update the donor's prospect rating and develop a personalized cultivation strategy before soliciting

When a donor's capacity increases, the appropriate step is to update their rating and develop a thoughtful, individualized cultivation plan before making a new ask.

Question 39: The AFP Code of Ethical Standards requires fundraisers to disclose which of the following?

Conflicts of interest that could affect professional judgment (Correct answer)
Internal board meeting minutes
The salaries of all fundraising staff
The names of all major donors

Correct answer: Conflicts of interest that could affect professional judgment

The AFP Code requires professionals to disclose actual or apparent conflicts of interest to avoid compromising their professional judgment or organizational integrity.

Question 40: A bequest intention that is documented but not legally binding is called a:

Revocable pledge
Soft credit or expectancy (Correct answer)
Testamentary annuity
Irrevocable trust

Correct answer: Soft credit or expectancy

A soft credit or expectancy is recorded when a donor has communicated a planned gift intention (such as a bequest) but the gift is not yet legally committed and can be changed.

Question 41: Gifts made or promises made before a campaign is made public. Before a campaign is revealed, advance gifts are requested because their amount may determine whether it succeeds or fails.

Life income gift
Timing
Advance gifts (Correct answer)
Cash flow

Correct answer: Advance gifts

The definition precisely describes "advance gifts." These are significant donations or pledges secured from key donors before a major fundraising campaign is publicly launched. Their importance lies in building momentum, demonstrating early support, and often setting the pace for the overall success of the campaign.

Question 42: Under the CFRE Code of Ethical Principles, which action is expressly prohibited?

Receiving compensation based on a percentage of funds raised (Correct answer)
Accepting gifts from corporations
Soliciting major gifts through personal visits
Using direct mail for annual fund campaigns

Correct answer: Receiving compensation based on a percentage of funds raised

Percentage-based compensation for fundraising is prohibited under AFP and CFRE ethical standards because it creates a conflict of interest and can distort fundraising priorities.

Question 43: Why is it important for fundraisers to maintain accurate and complete donor records?

To fulfill fiduciary responsibilities and enable accurate stewardship and reporting (Correct answer)
To share donor data with partner organizations freely
To qualify for additional tax-exempt status categories
To satisfy social media data requirements

Correct answer: To fulfill fiduciary responsibilities and enable accurate stewardship and reporting

Accurate donor records support ethical stewardship, ensure gifts are used as intended, and fulfill the organization's fiduciary and reporting responsibilities.

Question 44: Expenditures that are directly tied to campaign budget forecasts and are judged necessary for the organization and planning of a campaign.

campaign leadership
circuit courts
campaign costs (Correct answer)
campaign expenses

Correct answer: campaign costs

Campaign costs are the expenditures directly associated with the planning, organization, and execution of a fundraising campaign. These costs are budgeted and deemed necessary for the campaign's efficient operation and success. They encompass various expenses, from promotional materials to administrative overhead, all aimed at achieving fundraising goals.

Question 45: What distinguishes a 'development committee' from the full board in fundraising governance?

The development committee handles all board governance matters
The development committee approves all operational budgets
The development committee focuses specifically on fundraising strategy, oversight of the development program, and volunteer leadership recruitment (Correct answer)
The development committee replaces the need for a development staff director

Correct answer: The development committee focuses specifically on fundraising strategy, oversight of the development program, and volunteer leadership recruitment

A development committee is a board subcommittee focused on fundraising strategy, development program oversight, and recruiting volunteer leaders — not on general board governance matters.

Question 46: Which measurement best evaluates the effectiveness of a fundraising program's donor retention efforts?

Donor retention rate (percentage of donors who give again in the subsequent year) (Correct answer)
Total number of new donors acquired
Total gross revenue raised per campaign
Average gift size across all donors

Correct answer: Donor retention rate (percentage of donors who give again in the subsequent year)

Donor retention rate directly measures how well the organization is keeping existing donors engaged — retaining donors is far more cost-effective than acquiring new ones.

Question 47: What is the purpose of a 'gift acknowledgment' letter sent within 48 hours of receiving a donation?

To inform the donor of upcoming events
To provide a tax receipt only — no personal content is needed
To request an additional gift immediately
To thank the donor promptly and reinforce their positive decision to give (Correct answer)

Correct answer: To thank the donor promptly and reinforce their positive decision to give

Prompt acknowledgment reinforces the donor's giving decision, builds loyalty, and is a best practice in stewardship that supports future retention.

Question 48: What is the purpose of list segmentation in a direct mail annual fund program?

To tailor messages and ask amounts to different groups based on their giving history (Correct answer)
To identify donors eligible for planned giving only
To separate restricted gifts from unrestricted gifts in accounting
To reduce the total number of donors receiving mail

Correct answer: To tailor messages and ask amounts to different groups based on their giving history

Segmentation allows organizations to send customized messages and appropriate ask amounts to different donor groups, improving response rates and average gift sizes.

Question 49: What is the primary purpose of a 'case for support' in fundraising?

To articulate why the organization deserves philanthropic investment (Correct answer)
To document donor stewardship activities
To present the organization's audited financial statements
To outline the legal basis for charitable solicitation

Correct answer: To articulate why the organization deserves philanthropic investment

A case for support communicates the organization's mission, impact, and compelling need to inspire prospective donors to give.

Question 50: Which of the following is a key responsibility of a campaign chair volunteer?

Managing staff performance reviews
Providing leadership credibility, making a lead gift, and helping recruit other major donors and volunteer leaders (Correct answer)
Processing all gift transactions
Writing all campaign communications

Correct answer: Providing leadership credibility, making a lead gift, and helping recruit other major donors and volunteer leaders

A campaign chair provides visible leadership by making a significant personal gift and using their reputation and relationships to attract other leaders and major donors to the campaign.

Question 51: What does the term 'upgrade' refer to in annual fund fundraising?

Moving a donor from annual giving to a planned gift
Improving the quality of the direct mail package design
Asking a current donor to give more than their previous gift amount (Correct answer)
Switching a donor from paper mail to electronic communications

Correct answer: Asking a current donor to give more than their previous gift amount

An upgrade strategy involves asking existing donors to increase their gift level, typically by suggesting a specific amount higher than their last gift.

Question 52: Which major gift fundraising concept describes a donor's potential to give based on their wealth, not just past giving history?

Propensity
Inclination
Affinity
Capacity (Correct answer)

Correct answer: Capacity

Capacity refers to a donor's financial ability to make a gift, often assessed through wealth screening tools separate from their giving history.

Question 53: A 'feasibility study' conducted before a capital campaign is designed to:

Raise initial funds for the campaign
Train new fundraising staff
Create the campaign case for support
Assess whether the campaign goal, leadership, and donor base can support the planned campaign (Correct answer)

Correct answer: Assess whether the campaign goal, leadership, and donor base can support the planned campaign

A feasibility study interviews key stakeholders and major gift prospects to evaluate whether the organization is ready to launch a campaign at the proposed scale.

Question 54: How should a fundraiser respond when a donor requests changes to a gift agreement after it has been signed?

Ignore the request since the agreement is binding
Reject any changes to maintain organizational consistency
Work with legal counsel and the donor to formally amend the agreement if changes are allowable (Correct answer)
Unilaterally amend the agreement without donor knowledge

Correct answer: Work with legal counsel and the donor to formally amend the agreement if changes are allowable

Gift agreement amendments should be handled formally with legal guidance and explicit donor consent to protect both the donor's intent and the organization's integrity.

Question 55: The term 'quid pro quo contribution' refers to a payment where:

The donor receives something of value in return for their contribution (Correct answer)
The donor gives anonymously
The gift is made via payroll deduction
The organization matches the donation

Correct answer: The donor receives something of value in return for their contribution

A quid pro quo contribution is one where the donor receives goods or services in exchange for their gift; organizations must disclose the value of those benefits for tax purposes.

Question 56: Which fundraising principle states that people give to people — meaning the relationship between the asker and the prospect is often more important than the organization itself?

The peer-to-peer solicitation principle (Correct answer)
The propensity-to-give principle
The donor-centered fundraising principle
The case for support principle

Correct answer: The peer-to-peer solicitation principle

Peer-to-peer solicitation is grounded in the principle that a personal ask from a trusted peer or friend is more effective than an organizational solicitation.

Question 57: When segmenting a direct mail list, LYBUNT refers to donors who gave:

Last year but unfortunately not this year (Correct answer)
Lifetime yearly benefits until now terminated
Large yields by understanding new trends
Last year but unchosen now for targeting

Correct answer: Last year but unfortunately not this year

LYBUNT stands for 'Last Year But Unfortunately Not This Year,' identifying lapsed donors from the immediately prior year who are prime reactivation targets.

Question 58: What is the primary purpose of an annual fund in a nonprofit organization?

To secure planned gifts from wealthy individuals
To fund only capital construction projects
To fund endowment growth exclusively
To provide a broad base of unrestricted operating support from many donors (Correct answer)

Correct answer: To provide a broad base of unrestricted operating support from many donors

The annual fund provides broad-based unrestricted operating support, allowing the organization flexibility to meet day-to-day expenses and programmatic needs.

Question 59: Which of the following describes a 'pooled income fund'?

An investment account managed by the board's finance committee
A fund where all donors give anonymously to a shared general fund
A planned giving vehicle where multiple donors contribute assets to a fund, receive proportionate income for life, and the remainder passes to the charity (Correct answer)
A matching grant fund contributed to by multiple corporate sponsors

Correct answer: A planned giving vehicle where multiple donors contribute assets to a fund, receive proportionate income for life, and the remainder passes to the charity

A pooled income fund pools contributions from multiple donors; each donor receives a proportionate share of fund income for their lifetime, and upon death, their share of the fund passes to the designated charity.

Question 60: A volunteer who raises money for a cause is also known as a fundraiser, and a fundraising event has come to be known as a fundraiser. A fundraiser is someone who makes a living working as a member of an organization's or institution's development department, an independent fundraising consultant, or a fundraising counseling firm member.

volunteer
bequest
fundraising activities
fundraiser (Correct answer)

Correct answer: fundraiser

The definition explicitly states that "A volunteer who raises money for a cause is also known as a fundraiser," and further elaborates that "A fundraiser is someone who makes a living working as a member of an organization's... development department." It also mentions that a fundraising event can be called a fundraiser. This comprehensive description directly defines the term "fundraiser" in its various applications.

Question 61: The 'moves management' system in major gift fundraising refers to:

A CRM software feature for scheduling donor visits
A structured approach to moving prospects through stages of identification, qualification, cultivation, solicitation, and stewardship (Correct answer)
Physically relocating donor meetings to preferred venues
Transferring donor records between development staff members

Correct answer: A structured approach to moving prospects through stages of identification, qualification, cultivation, solicitation, and stewardship

Moves management is a systematic process that tracks and intentionally advances prospects through a pipeline of relationship-building stages toward a major gift.

Question 62: Which of the following is a best practice for gift acknowledgment timing?

Within 30 days of receiving a gift
Only at year-end for tax purposes
Within 48–72 hours of receiving a gift (Correct answer)
After the donor makes a second gift

Correct answer: Within 48–72 hours of receiving a gift

Best practice calls for acknowledging gifts within 48–72 hours to reinforce the donor's positive giving experience and build trust.

Question 63: What is the ethical obligation of a fundraiser when a prospective donor appears to be making a gift under undue influence?

Report the gift as completed to meet campaign targets
Accept the gift quickly before the donor changes their mind
Proceed if the gift amount is below a certain threshold
Pause the solicitation and take steps to ensure the donor is acting freely and competently (Correct answer)

Correct answer: Pause the solicitation and take steps to ensure the donor is acting freely and competently

Fundraisers must ensure donors are acting of their own free will and are competent; proceeding when undue influence is suspected violates the donor's rights and the fundraiser's ethical duty.

Question 64: Which fundraising method typically yields the highest average gift size?

Social media crowdfunding
Direct mail appeals
Planned giving and bequests (Correct answer)
Special events

Correct answer: Planned giving and bequests

Planned gifts and bequests typically yield the largest average gift because donors contribute assets such as estates, trusts, or life insurance policies.

Question 65: Which of the following is a key characteristic of a 'comprehensive campaign'?

It focuses exclusively on capital projects like buildings
It only solicits gifts from corporations and foundations
It is limited to a single fiscal year
It integrates multiple gift types — capital, endowment, and program funds — into a single campaign goal (Correct answer)

Correct answer: It integrates multiple gift types — capital, endowment, and program funds — into a single campaign goal

A comprehensive campaign combines capital, endowment, and program-related fundraising goals into one unified effort to maximize organizational advancement.

Question 66: How should a development officer handle a board member who consistently fails to meet their give/get commitment?

Remove them from the board immediately without discussion
Have a private, supportive conversation to understand barriers and find a meaningful role that better matches their capacity (Correct answer)
Ignore the issue to avoid conflict
Publicly shame them at a board meeting

Correct answer: Have a private, supportive conversation to understand barriers and find a meaningful role that better matches their capacity

Addressing underperformance requires a respectful private conversation to understand obstacles, adjust expectations, or identify a better-suited role — preserving the relationship while maintaining accountability.

Question 67: What is a 'gift range chart' (also called a table of gifts) used for in campaign planning?

Calculating the tax deductibility of planned gifts
Showing how many gifts at various levels are needed to reach the campaign goal (Correct answer)
Scheduling donor recognition events
Tracking staff salaries against fundraising income

Correct answer: Showing how many gifts at various levels are needed to reach the campaign goal

A gift range chart mathematically models the number of gifts at each level required to reach a campaign goal, helping planners identify how many prospects are needed at each tier.

Question 68: What is the typical recertification cycle for the CFRE credential?

3 years (Correct answer)
2 years
1 year
5 years

Correct answer: 3 years

CFRE credential holders must recertify every 3 years by demonstrating continued education, professional service, and fundraising practice.

Question 69: In stewardship, what is the purpose of a 'gift impact report'?

To show donors the tangible outcomes their contribution achieved (Correct answer)
To request a renewal gift
To track internal fundraising staff performance
To document compliance with IRS regulations

Correct answer: To show donors the tangible outcomes their contribution achieved

A gift impact report demonstrates to donors exactly how their funds were used and what outcomes resulted, reinforcing the value of their philanthropic investment.

Question 70: Which of the following is a key metric for evaluating the success of a planned giving program?

Percentage of planned gifts that are bequests vs. trusts
Number of planned giving events held per year
Number of direct mail appeals sent to planned giving prospects
Number of confirmed gift intentions (expectancies) in the pipeline and the estimated value of those commitments (Correct answer)

Correct answer: Number of confirmed gift intentions (expectancies) in the pipeline and the estimated value of those commitments

The number and estimated value of confirmed gift intentions (expectancies) is the primary indicator of a planned giving program's pipeline strength and future revenue potential.

Question 71: What is the primary difference between 'annual giving' and 'major giving' programs?

Annual giving programs typically involve smaller, repeated gifts from broad audiences while major gifts involve larger, individual, relationship-based philanthropy (Correct answer)
Annual giving is only for corporations; major giving is only for individuals
Annual giving requires a board vote; major gifts do not
Annual giving is tax-exempt; major giving is not

Correct answer: Annual giving programs typically involve smaller, repeated gifts from broad audiences while major gifts involve larger, individual, relationship-based philanthropy

Annual giving programs focus on broad-based, recurring gifts of modest amounts, while major gift programs focus on fewer, larger gifts requiring deep individual relationship cultivation.

Question 72: The IRS requires nonprofits to provide a written acknowledgment for any single cash donation of:

$50 or more
$100 or more
$250 or more (Correct answer)
$500 or more

Correct answer: $250 or more

Under IRS regulations, nonprofits must provide written acknowledgment (a receipt) for any single cash contribution of $250 or more so the donor can claim a charitable deduction.

Question 73: In major gift fundraising, a 'discovery visit' is primarily used to:

Learn about the prospect's interests, connection to the mission, and philanthropic capacity before crafting a solicitation strategy (Correct answer)
Ask for a specific gift amount on the first contact
Deliver a formal gift proposal document
Conduct a background financial investigation of the prospect

Correct answer: Learn about the prospect's interests, connection to the mission, and philanthropic capacity before crafting a solicitation strategy

A discovery visit is an early cultivation meeting designed to learn about the prospect's motivations, interests, and alignment with the organization before any solicitation is made.

Question 74: In planned giving, what distinguishes a charitable remainder unitrust (CRUT) from a charitable remainder annuity trust (CRAT)?

A CRUT allows additional contributions; a CRAT does not allow additional contributions (Correct answer)
A CRUT pays a fixed dollar amount; a CRAT pays a fixed percentage
A CRUT pays a fixed percentage of the trust's annually revalued assets; a CRAT pays a fixed dollar amount
A CRUT requires a minimum 10% remainder to charity; a CRAT does not

Correct answer: A CRUT allows additional contributions; a CRAT does not allow additional contributions

A CRUT allows donors to make additional contributions to the trust after it is established, while a CRAT is funded only at inception and accepts no additional contributions.

Question 75: Under IRS regulations, a donor who receives a benefit in exchange for a charitable contribution must be informed of:

The organization's overhead ratio
The organization's total annual budget
The number of other donors who gave at the same level
The fair market value of the benefit received so they can calculate the deductible portion (Correct answer)

Correct answer: The fair market value of the benefit received so they can calculate the deductible portion

IRS rules require organizations to provide a good faith estimate of the fair market value of any benefit received so donors can calculate their net deductible contribution.

Question 76: Which ethical principle requires fundraisers to be honest about how funds will be used in a solicitation?

Autonomy
Truthfulness and honesty (Correct answer)
Confidentiality
Stewardship

Correct answer: Truthfulness and honesty

Truthfulness and honesty require that fundraisers accurately represent the organization's programs and how donated funds will be allocated.

Question 77: Which approach best supports upgrading annual fund donors to major gift prospects?

Reducing contact frequency to avoid annoying donors
Implementing a mid-level giving program with personal outreach and stewardship (Correct answer)
Sending more direct mail appeals
Requiring donors to attend an event before upgrading

Correct answer: Implementing a mid-level giving program with personal outreach and stewardship

Mid-level giving programs provide a bridge between annual fund and major gifts, using personalized stewardship to identify and cultivate upgrade candidates.

Question 78: The CFRE exam domain 'Relationship Building' primarily encompasses which activity?

Identifying, cultivating, and stewarding donor relationships (Correct answer)
Designing fundraising event logistics
Processing gift acknowledgments in accounting software
Writing grant proposals

Correct answer: Identifying, cultivating, and stewarding donor relationships

The Relationship Building domain covers identifying prospects, cultivating engagement, and stewarding donors over time.

Question 79: What is 'donor attrition' in the context of annual giving?

The increase in average gift size year over year
The percentage of donors who do not renew their gift in a subsequent year (Correct answer)
The cost of acquiring new donors through direct mail
The process of moving donors to major gift portfolios

Correct answer: The percentage of donors who do not renew their gift in a subsequent year

Donor attrition (also called lapse rate) measures the percentage of donors who gave in one period but did not renew in the next period.

Question 80: In a capital campaign, what is the 'quiet phase'?

The confidential period when major gifts are solicited before the public announcement (Correct answer)
The planning and feasibility study period
The board-only giving period before staff are solicited
The post-campaign wrap-up and stewardship phase

Correct answer: The confidential period when major gifts are solicited before the public announcement

The quiet phase involves securing 50–70% of the campaign goal from lead donors before the public launch to create momentum.

Question 81: When a board member feels uncomfortable asking for gifts, the fundraiser should:

Train them in lower-risk fundraising roles such as cultivation, stewardship, and opening doors rather than direct solicitation (Correct answer)
Require them to complete a solicitation quota anyway
Remove them from all fundraising activities
Report the discomfort to the executive director as a performance issue

Correct answer: Train them in lower-risk fundraising roles such as cultivation, stewardship, and opening doors rather than direct solicitation

Not every board member needs to make face-to-face asks; effective development programs offer multiple engagement roles that play to individual strengths and comfort levels.

Question 82: Which approach describes 'board member fundraising' best practice where board members open doors rather than close gifts?

Board members make introductions and accompany staff on cultivation visits (Correct answer)
Board members review and approve every gift solicitation letter
Board members personally solicit and close all major gifts independently
Board members host events and handle all gift follow-up without staff

Correct answer: Board members make introductions and accompany staff on cultivation visits

Best practice positions board members as relationship connectors who introduce prospects and support staff gift officers, who lead cultivation and solicitation.

Question 83: The concept of 'restricted vs. unrestricted gifts' is important in ethics because:

Unrestricted gifts cannot be used for operating expenses
Unrestricted gifts must be returned to donors annually
Restricted gifts are tax-deductible at a higher rate
Organizations must honor donor restrictions and use gifts only as intended (Correct answer)

Correct answer: Organizations must honor donor restrictions and use gifts only as intended

Honoring donor restrictions is a fundamental ethical obligation; using a restricted gift for a different purpose violates the donor's intent and the organization's fiduciary duty.

Question 84: A donation made to a company or organization for whatever reasons the trustees or officers decide.

unrestricted gift (Correct answer)
associates
designated gift
life interest

Correct answer: unrestricted gift

An "unrestricted gift" is precisely a donation given to an organization without any specific conditions or limitations on its use. This allows the organization's leadership (trustees or officers) the flexibility to allocate the funds where they are most needed, supporting general operations or emerging priorities. It contrasts with a designated or restricted gift, which has specific donor-imposed conditions.

Question 85: Which type of charitable trust pays income to the organization first, with the remainder going to heirs?

Pooled income fund
Charitable lead trust (CLT) (Correct answer)
Donor-advised fund (DAF)
Charitable remainder trust (CRT)

Correct answer: Charitable lead trust (CLT)

A charitable lead trust (CLT) distributes income to the nonprofit for a set term, after which the remaining assets pass to the donor's heirs, making it attractive for estate planning.

Question 86: Under the Donor Bill of Rights, donors have the right to:

Expect that all relationships with the organization will be conducted with confidentiality and respect (Correct answer)
Require the organization to match their gift from general funds
Receive a percentage of funds raised in their name
Direct how all organizational operating expenses are spent

Correct answer: Expect that all relationships with the organization will be conducted with confidentiality and respect

The Donor Bill of Rights guarantees that donor relationships will be conducted with confidentiality, honesty, and respect — fundamental rights to protect donor trust.

Question 87: What is a 'gift annuity'?

A contract where a donor transfers assets to a charity in exchange for fixed income payments for life, with the remainder benefiting the charity (Correct answer)
An annuity fund managed by the government for charitable purposes
A pooled investment fund open only to nonprofit organizations
An insurance product that donates to charity at death

Correct answer: A contract where a donor transfers assets to a charity in exchange for fixed income payments for life, with the remainder benefiting the charity

A charitable gift annuity is a contract between the donor and the charity: the donor transfers assets, the charity pays a fixed annuity income for life, and upon the donor's death the remaining assets benefit the charity.

Question 88: The 'pyramid of giving' model suggests that an organization should:

Build a broad base of small donors and cultivate them toward larger gifts over time (Correct answer)
Focus exclusively on major gift solicitation
Prioritize grant funding over individual donors
Solicit all donors at the same gift level

Correct answer: Build a broad base of small donors and cultivate them toward larger gifts over time

The donor pyramid illustrates that organizations need a large base of annual fund donors from which to identify, cultivate, and upgrade prospects to major and planned gifts.

Question 89: Which principle underpins the concept of 'philanthropic freedom'?

Organizations can restrict donor giving to specific programs only
Governments should control how charitable funds are distributed
Fundraisers must approve all gifts before they are accepted
Donors have the right to make charitable gifts to any legal organization without coercion (Correct answer)

Correct answer: Donors have the right to make charitable gifts to any legal organization without coercion

Philanthropic freedom holds that donors have the fundamental right to support causes of their own choosing without undue pressure or manipulation.

Question 90: Which type of prospect research tool aggregates publicly available data such as real estate holdings, SEC filings, and political donations to estimate donor capacity?

Engagement scoring models
Psychographic segmentation tools
Wealth screening software (Correct answer)
Donor survey instruments

Correct answer: Wealth screening software

Wealth screening software uses publicly available data sources to estimate a prospect's financial capacity to give, helping prioritize major gift outreach.

Question 91: Which of the following describes the role of a 'volunteer fundraising committee'?

To approve the organization's annual budget
To handle day-to-day administrative functions
To replace paid development staff
To assist with peer-to-peer solicitations, cultivation events, and opening doors to new donor prospects (Correct answer)

Correct answer: To assist with peer-to-peer solicitations, cultivation events, and opening doors to new donor prospects

A volunteer fundraising committee extends the reach of the development office by engaging community leaders in peer solicitation, event hosting, and prospect introductions.

Question 92: What does 'moves management' refer to in fundraising?

Transferring fundraising staff between departments
A strategic process of planning and tracking steps to move prospects toward a major gift commitment (Correct answer)
Moving donor records between databases
Scheduling logistics for donor events

Correct answer: A strategic process of planning and tracking steps to move prospects toward a major gift commitment

Moves management is a systematic approach to planning intentional contacts and activities that advance a prospect toward making a significant gift.

Question 93: A 'challenge grant' in fundraising is designed to:

Test a nonprofit's accounting controls
Motivate additional giving by matching new gifts up to a set amount (Correct answer)
Require grantees to submit matching IRS documentation
Challenge a competing organization's funding claims

Correct answer: Motivate additional giving by matching new gifts up to a set amount

A challenge grant motivates donors to give by having a lead donor or foundation agree to match new contributions dollar-for-dollar (or at another ratio) up to a specified total.

Question 94: What is the difference between a 'revocable' and an 'irrevocable' planned gift?

Revocable gifts are tax-deductible; irrevocable gifts are not
A revocable gift (e.g., a bequest) can be changed by the donor during their lifetime, while an irrevocable gift (e.g., a funded CRT) cannot be changed once established (Correct answer)
Revocable gifts are always larger than irrevocable gifts
Irrevocable gifts require board approval; revocable gifts do not

Correct answer: A revocable gift (e.g., a bequest) can be changed by the donor during their lifetime, while an irrevocable gift (e.g., a funded CRT) cannot be changed once established

Revocable planned gifts, like bequests, can be altered or revoked at any time before death, while irrevocable gifts, once transferred, cannot be changed or reclaimed by the donor.

Question 95: Which of the following best describes the 'silent phase' of a capital campaign?

The phase when only direct mail is used
The period after the campaign ends when no solicitations occur
The planning phase before any donors are contacted
The early phase when major gifts are solicited quietly before public announcement (Correct answer)

Correct answer: The early phase when major gifts are solicited quietly before public announcement

The silent (or quiet) phase is when fundraisers solicit lead gifts from top prospects, typically aiming to secure 50–70% of the goal before any public announcement.

Question 96: Which of the following is the most common type of planned gift in the United States?

Bequest through a will or living trust (Correct answer)
Charitable remainder trust
Charitable gift annuity
Charitable lead trust

Correct answer: Bequest through a will or living trust

Bequests — gifts made through a will or revocable living trust — are the most common form of planned giving in the US, making up the majority of legacy gift revenue.

Question 97: When a donor designates a gift to a specific program and that program is discontinued, the organization should:

Transfer the funds to the general operating budget without notifying the donor
Hold the funds indefinitely until a similar program is re-launched
Contact the donor to discuss redirecting the gift to a related purpose (Correct answer)
Return the gift immediately without contacting the donor

Correct answer: Contact the donor to discuss redirecting the gift to a related purpose

Ethical and legal stewardship requires the organization to contact the donor and seek their guidance on redirecting a restricted gift when the original designated purpose no longer exists.

Question 98: Which of the following actions would violate a donor's privacy rights?

Sharing a donor's contact information with a third-party vendor without the donor's consent (Correct answer)
Listing a donor in a published honor roll with their permission
Sending a personalized thank-you letter
Including a donor's cumulative giving total in their internal record

Correct answer: Sharing a donor's contact information with a third-party vendor without the donor's consent

Sharing donor information with third parties without explicit consent violates the donor's privacy rights and breaches the trust that is fundamental to the philanthropic relationship.

Question 99: What is the primary purpose of a 'case for support' in fundraising?

To outline staff compensation and administrative budget needs
To document the history of the organization's founding
To articulate why the organization deserves philanthropic investment and what impact the donor's gift will achieve (Correct answer)
To provide a legal justification for the organization's tax-exempt status

Correct answer: To articulate why the organization deserves philanthropic investment and what impact the donor's gift will achieve

The case for support compellingly communicates the organization's mission, the urgent need it addresses, and the transformational impact donor investment will make.

Question 100: Which of the following is considered a best practice for direct mail copy in a fundraising appeal?

Using complex vocabulary to convey organizational expertise
Writing in a personal, conversational tone with a clear, specific ask (Correct answer)
Keeping the letter to a single paragraph for modern readers
Focusing primarily on organizational history and mission statistics

Correct answer: Writing in a personal, conversational tone with a clear, specific ask

Effective fundraising copy uses a personal, conversational tone and includes a clear, specific ask because donors respond to emotional connection and simplicity.

Question 101: What is the typical response rate range for a direct mail renewal letter sent to lapsed donors?

10% to 15%
2% to 5% (Correct answer)
20% to 30%
0.5% to 1%

Correct answer: 2% to 5%

Lapsed donor reactivation mailings typically achieve 2%–5% response rates, higher than cold acquisition but lower than active donor renewal.

Question 102: According to CFRE best practices, what is the recommended minimum size for a capital campaign leadership gift (top gift in the pyramid)?

25-30% or more of the total goal (Correct answer)
50% or more of the total goal
5% of the total goal
10-20% of the total goal

Correct answer: 25-30% or more of the total goal

Capital campaign gift pyramids typically call for a lead gift representing 25-30% or more of the total goal to establish credibility and momentum for the campaign.

Question 103: Which statement about major gift cultivation best reflects best practice?

All major donor prospects should receive identical cultivation tracks
Solicitation should occur within 30 days of initial contact to maintain momentum
Cultivation should be tailored to the donor's interests and may take months or years (Correct answer)
Cultivation ends once the first major gift is secured

Correct answer: Cultivation should be tailored to the donor's interests and may take months or years

Effective major gift cultivation is individualized, based on each prospect's interests and readiness, and the timeline varies significantly from donor to donor.

Question 104: Which fundraising strategy involves asking a donor for a gift that is significantly larger than their previous contribution?

Blended gift ask
Capacity ask
Transformational ask
Stretch ask (Correct answer)

Correct answer: Stretch ask

A stretch ask encourages donors to give at a level somewhat beyond their past giving to grow their philanthropic investment.

Question 105: Which type of foundation is established by an individual or family and funded primarily from a single source?

Operating foundation
Private foundation (Correct answer)
Community foundation
Corporate foundation

Correct answer: Private foundation

A private foundation is typically established and controlled by an individual, family, or corporation and is funded primarily from a single source rather than public contributions.

Question 106: What is the key characteristic of an 'unrestricted gift' to a nonprofit?

It can only fund overhead and administrative costs
It requires board approval before being spent
It must be used within the fiscal year it was received
The organization can use it for any operational or programmatic purpose (Correct answer)

Correct answer: The organization can use it for any operational or programmatic purpose

Unrestricted gifts give the nonprofit maximum flexibility to apply funds wherever they are most needed, including operations, programs, or reserves.

Question 107: The AFP (Association of Fundraising Professionals) Standards of Practice require members to:

Share donor lists with peer organizations upon request
Disclose conflicts of interest and act in the best interest of donors and organizations (Correct answer)
Accept only salary-based compensation from a single employer
Limit solicitation to donors with prior giving history

Correct answer: Disclose conflicts of interest and act in the best interest of donors and organizations

AFP Standards require members to be transparent, disclose real or perceived conflicts of interest, and always act ethically in the interests of both donors and the organizations they serve.

Question 108: What is the best way to sustain volunteer engagement over a multi-year capital campaign?

Reducing volunteer involvement after the silent phase
Providing regular updates on campaign progress, celebrating milestones, and recognizing volunteer contributions (Correct answer)
Switching volunteers to different campaigns mid-cycle
Assigning the same tasks repeatedly to build routine

Correct answer: Providing regular updates on campaign progress, celebrating milestones, and recognizing volunteer contributions

Sustained engagement requires keeping volunteers informed of progress, celebrating shared achievements, and consistently recognizing their contributions to maintain motivation over time.

Question 109: What is a 'matching gift' program and how does it benefit annual giving?

A process where donors exchange gifts with each other
A corporate program where employer matches employee charitable donations, effectively doubling the impact (Correct answer)
An event where donors are matched with volunteer opportunities
A challenge grant restricted to capital campaigns only

Correct answer: A corporate program where employer matches employee charitable donations, effectively doubling the impact

Corporate matching gift programs allow employers to match employee donations to qualifying nonprofits, multiplying the impact of each gift and often increasing donor motivation to give.

Question 110: Which communication strategy is most effective for retaining mid-level donors?

Providing personalized impact reports that demonstrate how their gift was used (Correct answer)
Calling donors only when a new campaign launches
Limiting contact to tax receipts
Sending only annual fund appeal letters

Correct answer: Providing personalized impact reports that demonstrate how their gift was used

Personalized impact reporting shows donors their contribution mattered, which is the strongest driver of mid-level donor retention.

Question 111: Which document, co-created by AFP, CASE, AHP, and others in 1993, establishes donor protections?

Charitable Donor Charter
Donor Bill of Rights (Correct answer)
Philanthropic Covenant
Nonprofit Transparency Act

Correct answer: Donor Bill of Rights

The Donor Bill of Rights was created in 1993 by AFP, CASE, AHP, and the Council on Foundations to define donor expectations and rights.

Question 112: The straightforward transfer of property to the donee as a gift without any restrictions or stipulations.

Planned gift
Cash gift
Bargain sale
Outright gift (Correct answer)

Correct answer: Outright gift

An "outright gift" perfectly matches this description. It refers to a donation made directly and immediately to a charity, with no conditions, restrictions, or future obligations attached. The donor relinquishes full control of the asset at the time of the gift, making it a simple and direct transfer.

Question 113: A donor bequeaths 5% of their estate to a nonprofit in their will. This gift is best classified as:

A charitable lead annuity trust
A testamentary bequest (Correct answer)
A revocable living trust transfer
A charitable gift annuity

Correct answer: A testamentary bequest

A testamentary bequest is a planned gift made through a donor's will that transfers assets to a nonprofit upon the donor's death.

Question 114: A 'naming policy' in a capital campaign should address:

How to design logo signage for the building
The font and color scheme used in donor plaques
Minimum gift thresholds for naming rights, duration of naming recognition, and conditions for removal (Correct answer)
How social media posts about the building are approved

Correct answer: Minimum gift thresholds for naming rights, duration of naming recognition, and conditions for removal

A naming policy establishes the minimum gift required for naming rights, how long the name will be recognized, and under what circumstances (e.g., donor misconduct) a name might be removed.

Question 115: What percentage of a nonprofit's revenue is commonly cited as the benchmark where fundraising costs become a concern for watchdog agencies?

25%
20%
50%
35% (Correct answer)

Correct answer: 35%

Many watchdog agencies flag organizations where fundraising costs exceed 35% of total revenue as a potential concern for donors.

Question 116: Donor retention rate is calculated by dividing:

Total gifts this year by total gifts last year
New donors this year by lapsed donors
Number of donors who gave last year who also gave this year by total donors from last year (Correct answer)
Total revenue by number of donors

Correct answer: Number of donors who gave last year who also gave this year by total donors from last year

Retention rate = (donors retained from prior year ÷ total donors in prior year) × 100, measuring how well an organization keeps its existing donors year over year.

Question 117: Which of the following best describes 'informed consent' in a fundraising context?

The donor fully understands how their gift will be used and agrees without pressure (Correct answer)
The organization consents to accept a restricted gift
The donor receives a tax receipt after giving
The board approves all solicitation campaigns

Correct answer: The donor fully understands how their gift will be used and agrees without pressure

Informed consent means the donor has been given complete, accurate information about the gift's use and is giving freely without manipulation or pressure.

Question 118: Which of the following best describes 'telefundraising' as a component of annual giving?

Using text messages to send giving receipts
An automated email series triggered by donor actions
Fundraising conducted exclusively through social media platforms
Soliciting donors or prospects by telephone to secure or renew gifts (Correct answer)

Correct answer: Soliciting donors or prospects by telephone to secure or renew gifts

Telefundraising involves trained callers contacting donors or prospects by phone to solicit, renew, or upgrade gifts, often used in conjunction with direct mail.

Question 119: A fundraiser discovers that a major donor was given inaccurate information about a program before making their gift. What is the ethical course of action?

Take no action since the gift has already been processed
Transfer the gift to a different program silently
Reduce the donor's recognition level to compensate for the error
Disclose the error to the donor, correct the information, and offer to honor the donor's wishes regarding the gift (Correct answer)

Correct answer: Disclose the error to the donor, correct the information, and offer to honor the donor's wishes regarding the gift

Ethical fundraising requires correcting misinformation given to donors and empowering the donor to decide how they wish to proceed with their gift based on accurate information.

Question 120: Which governance principle is most directly related to a board's fundraising responsibility?

Fiduciary responsibility, which includes ensuring the organization has the financial resources needed to fulfill its mission (Correct answer)
The board's role in hiring and firing the CEO only
The board's authority to approve all program activities
The board's right to override staff fundraising decisions

Correct answer: Fiduciary responsibility, which includes ensuring the organization has the financial resources needed to fulfill its mission

The board's fiduciary responsibility includes ensuring financial health, which means actively supporting resource development — including fundraising — to sustain the mission.

Question 121: A method of raising money that entails planning and producing a special event for philanthropic objectives; any surplus funds are assigned as donations to the relevant charitable organization.

Timing
Cause-related marketing
Benefit event (Correct answer)
Public charity

Correct answer: Benefit event

This definition perfectly describes a "benefit event." These are special events, such as galas, concerts, or runs, specifically planned and executed to raise money for a charitable cause. The primary purpose is philanthropic, with any net proceeds from ticket sales, sponsorships, or other activities directly benefiting the designated organization.

Question 122: How does a fundraiser ethically handle a situation where an elderly donor with cognitive decline expresses interest in making a very large planned gift?

Proceed quickly to secure the gift commitment before family members interfere
Pause and consult with supervisors and legal counsel to ensure the donor is competent and acting of their own free will (Correct answer)
Accept the gift and document it to protect against future disputes
Involve the donor's children in all gift discussions without the donor's knowledge

Correct answer: Pause and consult with supervisors and legal counsel to ensure the donor is competent and acting of their own free will

When donor competence is in question, ethical fundraisers pause the process and seek guidance from supervisors and legal counsel to ensure the donor is genuinely competent and acting freely.

Question 123: A 'charitable lead trust' (CLT) is structured so that:

The charity manages all trust investments for the donor's lifetime
The government receives a tax benefit and the charity receives nothing
The charity receives income first for a period of time, and then the remainder passes to the donor's heirs (Correct answer)
The donor receives income first and the charity receives the remainder at death

Correct answer: The charity receives income first for a period of time, and then the remainder passes to the donor's heirs

In a charitable lead trust, the charity receives income (the 'lead' interest) for a term of years or lifetime, after which the remaining assets pass to the donor's heirs or other beneficiaries.

Question 124: What is the primary challenge in managing volunteer fundraisers?

Volunteers cost too much to train
Volunteers are unaccountable for results and require motivation, clear expectations, and structured support without the authority structure of employment (Correct answer)
Volunteers must be licensed by the state to solicit funds
Volunteers must be paid a commission for every gift they secure

Correct answer: Volunteers are unaccountable for results and require motivation, clear expectations, and structured support without the authority structure of employment

Unlike paid staff, volunteers cannot be required to perform tasks, so managing them effectively requires motivating engagement, setting clear expectations, and providing support without supervisory authority.

Question 125: A nonprofit's annual fund raised $200,000 from 1,000 donors last year. This year it raised $210,000 from 950 donors. What is the most accurate assessment?

The program is growing because total revenue increased
The program has a concerning donor retention problem despite revenue growth (Correct answer)
The program is declining because donor count fell
The program is stable and no changes are needed

Correct answer: The program has a concerning donor retention problem despite revenue growth

While revenue grew slightly, losing 50 donors (5% of base) signals a retention problem that will compound over time, eroding long-term program health.

Question 126: What is 'grateful patient fundraising' most directly associated with?

Veterans organization fundraising
Disaster relief campaigns
Hospital and healthcare philanthropy (Correct answer)
University medical school appeals

Correct answer: Hospital and healthcare philanthropy

Grateful patient fundraising is a hospital philanthropy strategy that identifies and cultivates patients who received exceptional care as potential major donors.

Question 127: What is 'donor lifetime value' (LTV) and why is it important in annual giving programs?

The maximum gift amount a donor has ever made
The projected total revenue a donor will contribute over their entire relationship with the organization (Correct answer)
The total assets a donor has available for charitable giving
The number of years a donor has been on the mailing list

Correct answer: The projected total revenue a donor will contribute over their entire relationship with the organization

Lifetime value projects the total expected revenue from a donor across their giving relationship, helping organizations justify acquisition costs and prioritize retention investments.

Question 128: The concept of 'peer-to-peer fundraising' relies primarily on:

Grant funding from foundations
Social media advertising algorithms
The organization's staff making all solicitations
Donors and supporters soliciting their own networks on behalf of the organization (Correct answer)

Correct answer: Donors and supporters soliciting their own networks on behalf of the organization

Peer-to-peer fundraising leverages the personal networks and relationships of supporters who solicit their own friends, family, and colleagues, dramatically expanding the donor base.

Question 129: Which element of a direct mail appeal package has the greatest impact on response rate?

The list and offer (Correct answer)
The outer envelope teaser copy
The postage class used
The reply device design

Correct answer: The list and offer

Research consistently shows that the mailing list quality and the strength of the offer (the ask) have the greatest influence on response rate.

Question 130: In the context of special events fundraising, what is 'net revenue'?

Gross revenue minus only direct food and venue costs
Total ticket and sponsorship sales before any deductions
Total event income minus all event-related expenses (Correct answer)
The amount raised above the event's expected capacity

Correct answer: Total event income minus all event-related expenses

Net revenue is the actual profit from an event, calculated by subtracting all costs (venue, catering, entertainment, staffing) from total income.

Question 131: A fundraiser is creating a mid-level giving society for donors giving $1,000-$9,999 annually. Which benefit would be MOST effective at this tier?

A listing in the annual report alongside all donors
A discounted ticket to the public gala event
Exclusive access to a behind-the-scenes program tour and personal thank-you from program staff (Correct answer)
A branded bumper sticker

Correct answer: Exclusive access to a behind-the-scenes program tour and personal thank-you from program staff

Mid-level donors respond best to access and insider experiences — exclusive tours and personal connections to program impact are highly valued at this giving tier.

Question 132: What is the name of the ethical code all CFRE credential holders must uphold?

AFP Code of Ethical Standards (Correct answer)
CASE Statement of Ethics
CFRE International Ethics Charter
Donor Bill of Rights

Correct answer: AFP Code of Ethical Standards

CFRE credential holders are required to uphold the AFP Code of Ethical Standards as part of their certification agreement.

Question 133: A nonprofit organization wants to measure the long-term value of its donor relationships. Which metric best captures this?

Cost per dollar raised
Average gift size
Donor lifetime value (LTV) (Correct answer)
Return on investment (ROI) per campaign

Correct answer: Donor lifetime value (LTV)

Donor lifetime value (LTV) measures the total net revenue a donor generates over their entire relationship with the organization, capturing long-term relationship worth.

Question 134: In a major gifts campaign, what is the recommended ratio of prospects to gifts needed at each level?

3:1 to 4:1 (Correct answer)
2:1
1:1
10:1

Correct answer: 3:1 to 4:1

Major gift fundraising generally requires a 3:1 to 4:1 ratio of prospects to gifts expected at each level, accounting for those who decline or cannot give.

Question 135: The names and addresses of a company's current and recently expired donors and members.

giving clubs
life interest
planned giving
house ﬁle (Correct answer)

Correct answer: house ﬁle

A "house file" in fundraising refers to an organization's internal database or list of its own current and past supporters, including donors, members, and volunteers. This valuable asset contains their names, addresses, and giving history, making it crucial for renewal campaigns, stewardship, and cultivating ongoing relationships.

Question 136: What is 'donor fatigue' in fundraising practice?

A donor's loss of interest after their naming gift is fulfilled
A decline in donor giving caused by over-solicitation or too many competing appeals (Correct answer)
Reduced board member enthusiasm after a failed campaign
Physical exhaustion experienced by fundraising staff during campaign peaks

Correct answer: A decline in donor giving caused by over-solicitation or too many competing appeals

Donor fatigue occurs when donors receive too many solicitation requests and begin to disengage or reduce giving as a result.

Question 137: When planning a donor cultivation event, the primary goal should be:

Minimizing organizational costs at all costs
Building relationships and deepening donor engagement with the mission (Correct answer)
Generating immediate donations at the event
Showcasing the organization's social media presence

Correct answer: Building relationships and deepening donor engagement with the mission

Cultivation events are designed to deepen relationships and connect donors emotionally to the mission, laying groundwork for future solicitations rather than immediate asks.

Question 138: A fundraiser is offered a personal gift (e.g., tickets to a sporting event) by a donor. According to AFP standards, what should the fundraiser do?

Decline or disclose the gift according to organizational policy to avoid a conflict of interest (Correct answer)
Accept only if the value is under $50
Accept the gift privately and not disclose it
Accept the gift as a reward for good relationship-building

Correct answer: Decline or disclose the gift according to organizational policy to avoid a conflict of interest

AFP standards require fundraisers to avoid personal enrichment from donor relationships; gifts should be declined or disclosed per organizational policy to prevent conflicts of interest.

Question 139: In an A/B split test for a direct mail appeal, what is the most important rule to follow?

Use different ask amounts for each group tested
Always test on a small random sample of the full list
Test only one variable at a time to isolate its effect (Correct answer)
Change as many variables as possible to generate data quickly

Correct answer: Test only one variable at a time to isolate its effect

Testing one variable at a time is the cardinal rule of A/B testing, ensuring that any difference in response can be attributed to the single changed element.

Question 140: Which of the following is an example of 'restricted' fund accounting in nonprofit finance?

Annual fund revenue deposited into the general operating account
Board-designated reserves set aside for building maintenance
A foundation grant designated exclusively for a specific youth literacy program (Correct answer)
Unrestricted operating funds used at board discretion

Correct answer: A foundation grant designated exclusively for a specific youth literacy program

A restricted gift is one where the donor or funder has specified how the funds must be used — such as a grant designated exclusively for a particular program.

Question 141: In grant writing, a 'logic model' is used primarily to:

Calculate the cost-benefit ratio of a program
Justify the organization's overhead costs to funders
Outline the organizational chart for the grant project
Visually map the relationships between a program's inputs, activities, outputs, and outcomes (Correct answer)

Correct answer: Visually map the relationships between a program's inputs, activities, outputs, and outcomes

A logic model visually represents how a program's resources and activities are expected to lead to desired outputs and outcomes, demonstrating program theory to funders.

Question 142: Campaign forms of every kind are referred to by this general phrase, as are the supplies needed for campaign workers, fact sheets, prospect lists, and a variety of other things crucial to the efficient operation of a campaign, as well as printed materials like brochures used to advance a campaign.

Big gifts
Social media
Campaign costs
Campaign materials (Correct answer)

Correct answer: Campaign materials

Campaign materials is a comprehensive term that refers to all the resources, documents, and supplies essential for the effective planning, execution, and promotion of a fundraising campaign. This includes a wide range of items such as brochures, forms, fact sheets, prospect lists, and other printed or digital assets. These materials are crucial for informing donors, guiding staff, and ensuring the campaign's smooth operation.

Question 143: A document that is sent to donors (together with copies going to the campaign's and organization's or institution's proper officials), either individually or as an attachment with an acknowledgement, officially thanking them for their support.

Gift / present
Major Gifts
Gift receipt (Correct answer)
A store credit

Correct answer: Gift receipt

A gift receipt is a formal document provided to donors to acknowledge their contribution and serve as proof of donation for tax purposes. It typically includes details like the donor's name, gift amount, date, and the organization's tax-exempt status. Beyond its legal function, it also acts as an important stewardship tool, expressing gratitude and reinforcing donor relations.

Question 144: What is 'prospect research' in the context of fundraising?

The process of identifying and evaluating potential donors' capacity, inclination, and connection to the organization (Correct answer)
Background research on fundraising staff candidates
Research into peer-to-peer fundraising platforms
Research into grant writing best practices

Correct answer: The process of identifying and evaluating potential donors' capacity, inclination, and connection to the organization

Prospect research involves gathering and analyzing information about potential donors to assess their philanthropic capacity, philanthropic history, and connection to the organization's mission.

Question 145: Which of the following is a key advantage of email solicitation compared to direct mail in an annual fund program?

Email achieves higher response rates than direct mail
Email is more effective for acquiring first-time donors
Email donors give significantly larger gifts than direct mail donors
Email has lower cost per contact and allows rapid deployment and testing (Correct answer)

Correct answer: Email has lower cost per contact and allows rapid deployment and testing

Email's primary advantages are very low cost per contact and the ability to deploy quickly and test subject lines and content with minimal expense.

Question 146: In the context of annual fund appeals, what does 'LYBUNT' stand for?

Last Year's Budget Under New Tracking
Long-Year Benefactor Upgrading Now Today
Last Year But Unfortunately Not This year (Correct answer)
Loyal Yearly Benefactor Under New Terms

Correct answer: Last Year But Unfortunately Not This year

LYBUNT stands for 'Last Year But Unfortunately Not This Year' — donors who gave in the prior fiscal year but have not yet given in the current year, making them a key lapsed-donor segment.

Question 147: In direct mail fundraising, what does 'RFM' stand for?

Recency, Frequency, Monetary value (Correct answer)
Response, Frequency, Market
Response, Fulfillment, Management
Reach, Frequency, Message

Correct answer: Recency, Frequency, Monetary value

RFM (Recency, Frequency, Monetary value) is a segmentation model that ranks donors based on when they last gave, how often they give, and the size of their gifts.

Question 148: When writing a direct mail appeal letter, the 'Johnson Box' refers to:

The postscript at the end of the letter
The return address block in the upper left corner
The donor recognition box included in the reply device
A highlighted summary statement placed above the salutation to capture reader attention (Correct answer)

Correct answer: A highlighted summary statement placed above the salutation to capture reader attention

The Johnson Box is a highlighted or boxed summary statement at the top of a direct mail letter, above the salutation, designed to immediately engage the reader.

Question 149: In prospect research, 'wealth screening' is used primarily to:

Identify potential donors' capacity to give major gifts (Correct answer)
Screen volunteers for background checks
Assess a nonprofit's financial health
Verify a donor's tax-exempt status

Correct answer: Identify potential donors' capacity to give major gifts

Wealth screening tools analyze publicly available data—such as real estate holdings, business affiliations, and stock ownership—to estimate a prospect's financial capacity for major giving.

Question 150: What is the significance of the '80/20 rule' in fundraising stewardship?

80% of donors prefer email over direct mail
80% of an organization's revenue typically comes from 20% of its donors (Correct answer)
80% of grants are awarded in the first 20 days of a cycle
80% of staff time should be spent on events

Correct answer: 80% of an organization's revenue typically comes from 20% of its donors

The 80/20 rule (Pareto Principle) in fundraising reflects that a small percentage of donors often provides the majority of revenue, guiding where to concentrate stewardship resources.

Question 151: Which of the following is the correct formula for calculating 'cost to raise a dollar'?

Total fundraising expenses ÷ total funds raised (Correct answer)
Total gifts ÷ total number of solicitations
Total revenue ÷ total donors
Total operating expenses ÷ total revenue

Correct answer: Total fundraising expenses ÷ total funds raised

Cost to raise a dollar (or fundraising efficiency ratio) is calculated by dividing total fundraising expenses by the total funds raised during the same period.

Question 152: A donor recognition society is BEST described as:

A peer-to-peer fundraising team
A tiered program that publicly acknowledges donors at various giving levels (Correct answer)
A committee that reviews gift restrictions
An IRS-mandated donor disclosure program

Correct answer: A tiered program that publicly acknowledges donors at various giving levels

A donor recognition society groups donors by giving level and offers benefits and acknowledgment appropriate to each tier.

Question 153: A SWOT analysis in fundraising strategic planning stands for:

Strategies, Workplans, Outcomes, Timelines
Strengths, Weaknesses, Opportunities, Threats (Correct answer)
Solicitations, Wins, Offers, Transitions
Supporters, Workers, Operations, Targets

Correct answer: Strengths, Weaknesses, Opportunities, Threats

A SWOT analysis evaluates internal Strengths and Weaknesses and external Opportunities and Threats to inform strategic fundraising planning decisions.

Question 154: An organization's 'donor bill of rights' primarily serves to:

Provide donors with voting rights at annual meetings
Grant donors legal authority over organizational decisions
Guarantee donors a financial return on their contributions
Assure donors they will be treated with respect and their gifts used as intended (Correct answer)

Correct answer: Assure donors they will be treated with respect and their gifts used as intended

The Donor Bill of Rights, developed by AFP and CASE, articulates the rights donors have to information, transparency, and respectful treatment from charitable organizations.

Question 155: The 'moves management' system in major gift fundraising refers to:

A series of planned interactions to cultivate and steward donors (Correct answer)
Managing volunteer movement during events
Transferring funds between campaign accounts
Relocating donor files between staff members

Correct answer: A series of planned interactions to cultivate and steward donors

Moves management is a structured cultivation strategy involving intentional, planned interactions ('moves') designed to deepen a donor's relationship with the organization and increase giving.

Question 156: A nonprofit board member's 'give or get' policy means the board member is expected to:

Either give all their time or get a paid salary from the organization
Either make a personal gift or help secure gifts from others totaling a set amount (Correct answer)
Either give up their seat or get a committee assignment
Either give their professional services or get reimbursed for expenses

Correct answer: Either make a personal gift or help secure gifts from others totaling a set amount

A 'give or get' policy requires each board member to either donate personally at a minimum level or leverage their networks to secure equivalent contributions from others.

Question 157: A 'development audit' is BEST used to:

Review the financial statements for accuracy
Evaluate the effectiveness, efficiency, and alignment of a fundraising program with organizational goals (Correct answer)
Assess social media marketing performance
Determine donor tax deduction eligibility

Correct answer: Evaluate the effectiveness, efficiency, and alignment of a fundraising program with organizational goals

A development audit systematically reviews all aspects of a fundraising program to identify strengths, gaps, and opportunities for improvement in strategy and operations.

Question 158: A 'case for support' document primarily serves to:

Outline staff compensation and benefits
Report financial results to the IRS
Document the legal status of the nonprofit
Articulate why a donor should give to the organization (Correct answer)

Correct answer: Articulate why a donor should give to the organization

The case for support (or case statement) is a persuasive document that communicates the organization's mission, needs, and impact to inspire donor investment.

Question 159: The 'recency, frequency, monetary' (RFM) analysis in fundraising is used to:

Schedule recent, frequent staff meetings about monetary goals
Score and segment donors based on how recently, how often, and how much they have given (Correct answer)
Measure the organization's recent, frequent, and monetary grant success
Evaluate recency of donor database updates for frequency of monetary errors

Correct answer: Score and segment donors based on how recently, how often, and how much they have given

RFM scoring ranks donors by how recently they gave (recency), how often they give (frequency), and the total amount they have given (monetary value) to prioritize outreach.

Question 160: A gift that is restricted or commemorative and is intended for a certain use.

designated gift (Correct answer)
big gifts
unrestricted gift
gift annuity

Correct answer: designated gift

A designated gift, also known as a restricted gift, is a donation made with specific instructions from the donor regarding its intended use. The donor specifies the purpose, program, or project for which the funds are to be used, and the organization is legally obligated to adhere to these restrictions. This ensures the gift supports a particular area important to the donor.

Question 161: The CFRE International Code of Ethics requires credential holders to do which of the following?

Maintain competence through continuing education and uphold ethical standards (Correct answer)
Solicit only within their home country
Disclose the salaries of all staff members to donors
Accept gifts only from donors they have personally cultivated

Correct answer: Maintain competence through continuing education and uphold ethical standards

CFRE credential holders commit to ongoing professional development and to upholding ethical standards as part of their certification obligations.

Question 162: What is the primary purpose of a donor stewardship program?

To recruit volunteers for fundraising events
To manage grant applications
To acknowledge, report back, and maintain relationships with existing donors (Correct answer)
To solicit new major gifts

Correct answer: To acknowledge, report back, and maintain relationships with existing donors

Donor stewardship focuses on acknowledging gifts, reporting impact, and nurturing long-term relationships to retain and upgrade donors.

Question 163: Which solicitation channel typically produces the best donor retention rates?

Social media advertising
Personal face-to-face solicitation (Correct answer)
Direct mail
Telephone fundraising

Correct answer: Personal face-to-face solicitation

Personal, face-to-face solicitation consistently produces the highest retention rates because of the relational connection it creates, though it is also the most resource-intensive channel.

Question 164: A present made in any of the following ways:

charitable contribution
charitable deferred gifts (Correct answer)
designated gift
unrestricted gift

Correct answer: charitable deferred gifts

Given the options, "charitable deferred gifts" is the most fitting term for a present made in various ways that are not immediate. These gifts, such as bequests, charitable remainder trusts, or gift annuities, are planned now but provide benefits to the charity at a future date, often after the donor's lifetime. The phrase "made in any of the following ways" hints at the diverse structures of such planned gifts.

Question 165: The 'Rule of Thirds' in capital campaign planning refers to what concept?

One-third of goal from top 10 donors, one-third from next tier, one-third from everyone else (Correct answer)
Allocating one-third of pledges to each of three fiscal years
Spending one-third of the budget on major gifts, one-third on events, one-third on direct mail
Dividing the campaign into three equal phases

Correct answer: One-third of goal from top 10 donors, one-third from next tier, one-third from everyone else

The Rule of Thirds suggests the top 10 donors give one-third, the next 100 donors give one-third, and all remaining donors give one-third of the campaign goal.

Question 166: A collection of influential and well-known people whose affiliation with a development program is intended to highlight and imply support for the goals and objectives of the program.

advisory board (Correct answer)
board of trustees
board of directors
health and human service board

Correct answer: advisory board

An "advisory board" consists of prominent individuals who lend their names, expertise, and influence to an organization or program. While they typically don't have governance responsibilities like a board of directors, their affiliation signals credibility and support, helping to attract donors and advance the program's goals and objectives.

Question 167: Which concept describes the cultivation strategy of moving a donor progressively from awareness to engagement to investment?

Philanthropic arc development
Donor pipeline or moves management (Correct answer)
Gift ladder progression
Annual fund escalation model

Correct answer: Donor pipeline or moves management

Moves management is the strategic process of planning and tracking specific actions that deepen a donor's relationship with the organization toward a major gift.

Question 168: Which element is most critical in a major gift solicitation meeting?

Discussing the organization's administrative overhead
Providing a tour of the facility before the ask
Asking for a specific dollar amount tied to a specific project (Correct answer)
Presenting a printed brochure with gift levels

Correct answer: Asking for a specific dollar amount tied to a specific project

Effective major gift solicitations include a specific, personalized ask amount linked to a tangible project or impact, which gives the donor clarity on how their gift will be used.

Question 169: A capital campaign's 'quiet phase' typically ends when:

The board approves the campaign goal
The first donor makes a gift
The public announcement event is planned
Approximately 50-60% or more of the goal has been secured in lead gifts (Correct answer)

Correct answer: Approximately 50-60% or more of the goal has been secured in lead gifts

The quiet phase ends and the public phase begins once 50-60% or more of the goal is secured from lead gifts, providing a strong foundation and momentum for the public launch.

Question 170: A broad word for higher-range gifts, with each institution having their own specific guidelines. In every drive to raise money, their significance is highlighted.

big gifts (Correct answer)
gift receipt
fundraising program
life income gift

Correct answer: big gifts

The phrase "higher-range gifts" directly corresponds to "big gifts," which are substantial donations crucial for fundraising campaigns. These gifts, often from major donors, are vital for reaching campaign goals and are typically cultivated through personalized stewardship. While specific thresholds vary by institution, their impact is universally recognized in fundraising drives.

Question 171: Which of the following is a key indicator that a donor may be a strong planned giving prospect?

The donor gives only through workplace giving programs
The donor is under age 30 and making their first gift
The donor is an older, loyal annual fund donor with no children and a long history of supporting the organization (Correct answer)
The donor made one large event-night gift

Correct answer: The donor is an older, loyal annual fund donor with no children and a long history of supporting the organization

Older donors with sustained giving histories, especially those without children or other significant heirs, are statistically stronger planned giving prospects due to fewer competing asset claims.

Question 172: Which metric best measures the effectiveness of a direct mail acquisition campaign?

Response rate
Average gift size
Total gross revenue
Cost per dollar raised (CPDR) (Correct answer)

Correct answer: Cost per dollar raised (CPDR)

Cost per dollar raised (CPDR) measures how efficiently acquisition spending converts to revenue, making it the most comprehensive effectiveness metric.

Question 173: Which principle guides the ethical use of donor information in a nonprofit's database?

Donor data may be sold to similar nonprofits to generate revenue
Sharing donor data freely increases the sector's collective impact
All donor data should be made public to ensure transparency
Donor information should be used only for purposes consistent with the donor's reasonable expectations and organizational mission (Correct answer)

Correct answer: Donor information should be used only for purposes consistent with the donor's reasonable expectations and organizational mission

Ethical stewardship requires that donor information be used only in ways donors would reasonably expect and consistent with organizational mission, honoring donor trust.

Question 174: Giving to charity organizations results in tax savings on income, gifts, and estates.

cash gift
tax benefits (Correct answer)
donor recognition
foreign market opportunities

Correct answer: tax benefits

Tax benefits refer to the financial advantages, such as deductions or credits, that donors receive on their income, gift, or estate taxes when contributing to qualified charitable organizations. These benefits are designed to incentivize philanthropy by reducing a donor's overall tax liability. They are a significant motivator for many charitable gifts.

Question 175: A mid-sized nonprofit receives an anonymous $500,000 gift with no restrictions. What is the FIRST step the development office should take?

Invest the funds immediately in the endowment
Announce the gift publicly to leverage matching opportunities
Allocate the funds to the most underfunded program
Work with board and finance to document the gift and establish an appropriate fund (Correct answer)

Correct answer: Work with board and finance to document the gift and establish an appropriate fund

The first step is proper documentation and governance — working with leadership and finance to formally accept, record, and determine appropriate use of the gift per policy.

Question 176: When a nonprofit receives a multi-year pledge, how should it be recorded on financial statements under generally accepted accounting principles (GAAP)?

Record the full present value of the pledge receivable in the year the pledge is made, discounted for time value (Correct answer)
Record it as contingent revenue until the final payment is made
Record only the payments actually received each year
Record the pledge only after all payments are received in full

Correct answer: Record the full present value of the pledge receivable in the year the pledge is made, discounted for time value

Under GAAP (ASC 958), multi-year pledges are recorded at their present discounted value when made, with a discount that unwinds to interest income over the pledge period.

Question 177: What is the recommended approach when a donor expresses interest in a planned gift but is hesitant to commit?

Transfer them to a planned giving attorney without further fundraiser involvement
Pressure them to sign a gift intention form immediately
Stop all contact until they are ready to commit
Provide educational resources about planned giving options, respect their timeline, and maintain regular stewardship contact (Correct answer)

Correct answer: Provide educational resources about planned giving options, respect their timeline, and maintain regular stewardship contact

Planned giving decisions involve complex personal, financial, and family considerations; respecting the donor's timeline while providing education and maintaining a supportive relationship leads to better outcomes.

Question 178: When training board members for fundraising, the MOST effective approach is:

Teaching board members to share personal stories about why the mission matters to them (Correct answer)
Providing a written script for every donor conversation
Limiting board fundraising involvement to signing letters
Requiring board members to make cold calls to prospect lists

Correct answer: Teaching board members to share personal stories about why the mission matters to them

Board members are most effective when they can authentically share their personal connection to the mission, making conversations natural and compelling rather than scripted.

Question 179: Effective volunteer recruitment for a fundraising campaign should begin with:

Posting a generic social media request for volunteers
Waiting until the campaign is publicly launched
Hiring a volunteer coordinator as a first step
Identifying individuals with connections to the mission and capacity to open doors to prospects (Correct answer)

Correct answer: Identifying individuals with connections to the mission and capacity to open doors to prospects

Recruiting volunteers who have personal connections to the mission and relationships with prospective donors dramatically increases campaign effectiveness compared to general recruitment.

Question 180: What is a 'control package' in direct mail fundraising?

The proven appeal that currently outperforms all alternatives and serves as a benchmark (Correct answer)
A mailing sent only to board members for internal review
A restricted use gift acknowledgment form
A package that controls postal costs through bulk rate

Correct answer: The proven appeal that currently outperforms all alternatives and serves as a benchmark

A control package is the current best-performing mail package against which all new test packages are measured.

Question 181: Which of the following best describes 'philanthropic inclination' in prospect research?

The donor's annual income level
The donor's legal capacity to enter a gift agreement
The likelihood that the prospect is motivated to give charitably based on past giving history, interests, and values (Correct answer)
The prospect's willingness to volunteer at events

Correct answer: The likelihood that the prospect is motivated to give charitably based on past giving history, interests, and values

Philanthropic inclination (or affinity) measures how likely a prospect is to give charitably, based on their demonstrated giving history, values, and personal connection to a cause.

Question 182: Which factor most strongly predicts whether a donor will make a major gift?

Whether the donor attended a special event in the past year
Previous giving history combined with capacity and affinity (Correct answer)
The donor's age and geographic location
The organization's social media follower count

Correct answer: Previous giving history combined with capacity and affinity

The three key predictors of major giving are capacity (financial ability), affinity (passion for the mission), and prior giving history—often called the 'golden triangle' of major gift fundraising.

Question 183: Which fundraising technique involves sending a small token gift (e.g., address labels or calendar) with a solicitation to increase response rates?

Donor premium follow-up
Reciprocity ask
Front-end premium (Correct answer)
Thank-you incentive

Correct answer: Front-end premium

A front-end premium is an unsolicited gift included with the appeal that leverages the principle of reciprocity to boost donation response rates.

Question 184: Using the phone to solicit donations or offer goods or services.

telemarketing (Correct answer)
telecommute
teleconference
telecast

Correct answer: telemarketing

The definition directly describes "telemarketing," which is the practice of contacting potential customers or donors by telephone. In a fundraising context, it involves soliciting donations, while in a commercial context, it involves offering goods or services, exactly as stated.

Question 185: Which of the following BEST describes the role of a gift acceptance policy?

It sets minimum gift amounts for all donors
It provides guidelines for evaluating and accepting non-cash, complex, or potentially problematic gifts (Correct answer)
It determines which donors qualify for named recognition
It outlines how staff will be compensated for securing major gifts

Correct answer: It provides guidelines for evaluating and accepting non-cash, complex, or potentially problematic gifts

A gift acceptance policy guides the organization in evaluating non-cash gifts, complex planned gifts, or gifts with conditions that may create legal, financial, or reputational risk.

Question 186: What does 'ROI' stand for and how is it applied in fundraising?

Return on Investment; used to measure net fundraising revenue relative to fundraising costs (Correct answer)
Report of Intentions; used to track pledge commitments
Request of Individuals; used to categorize solicitation types
Roster of Investors; used for planned giving portfolios

Correct answer: Return on Investment; used to measure net fundraising revenue relative to fundraising costs

ROI (Return on Investment) in fundraising measures how much net revenue is generated for every dollar spent on fundraising activities, helping prioritize the most cost-effective strategies.

Question 187: Which of the following is an example of proactive stewardship?

Posting generic social media updates about the organization
Calling a major donor to share a program success story before making a new ask (Correct answer)
Waiting for a donor complaint before addressing concerns
Sending a tax receipt only when requested

Correct answer: Calling a major donor to share a program success story before making a new ask

Proactive stewardship involves reaching out to donors with meaningful updates and recognition before any solicitation, building trust and loyalty.

Question 188: What does 'donor bill of rights' primarily protect?

Volunteers' rights in fundraising campaigns
The organization's right to keep donor information confidential
Fundraisers' rights to commission-based pay
Donors' rights to be informed, treated with respect, and have their gifts used as intended (Correct answer)

Correct answer: Donors' rights to be informed, treated with respect, and have their gifts used as intended

The Donor Bill of Rights ensures donors can expect transparency, respect, and accountability from the charitable organizations they support.

Question 189: What is the purpose of the 'accountability' component in fundraising ethics?

To limit the number of solicitations sent annually
To restrict the board's oversight of fundraising activities
To ensure fundraisers meet personal revenue targets
To demonstrate that donated funds are used responsibly and as promised to donors (Correct answer)

Correct answer: To demonstrate that donated funds are used responsibly and as promised to donors

Accountability in fundraising means being transparent about how donations are used and demonstrating that the organization fulfills its promises to donors and the public.

Question 190: A freely given, unconditional transfer of something of value without asking for anything in return at the moment of the transfer or in the future. The transfer is not a gift if the person making it entertains any thoughts of regaining it.

Gift (Correct answer)
Dish
Give
Credit

Correct answer: Gift

This definition perfectly encapsulates the essence of a "gift." It emphasizes the voluntary, unconditional, and irrevocable nature of the transfer of value. The key characteristic is that nothing is expected in return, either immediately or in the future, and the donor relinquishes all claim to the item.

Question 191: An organization receives a restricted gift for a specific program that has since been discontinued. What is the appropriate first step?

Use the funds for the general operating budget
Quietly transfer funds to a similar program
Return the gift immediately without discussion
Contact the donor to discuss redirecting the gift with their approval (Correct answer)

Correct answer: Contact the donor to discuss redirecting the gift with their approval

Ethical stewardship requires contacting the donor to obtain their approval before redirecting a restricted gift to an alternative purpose.

Question 192: A 'charitable remainder trust' (CRT) benefits the donor by:

Eliminating all federal estate taxes on the donor's estate
Providing an immediate lump sum cash payment to the charity
Requiring the charity to manage all investment decisions
Giving the donor (or named beneficiaries) income for life or a term of years, with the remainder passing to charity (Correct answer)

Correct answer: Giving the donor (or named beneficiaries) income for life or a term of years, with the remainder passing to charity

A CRT provides the donor or named beneficiaries with an income stream for life or a specified term, after which the trust's remaining assets pass to the designated charity.

Question 193: A fundraising 'board retreat' focused on development is MOST useful for:

Building board understanding of fundraising expectations, developing shared strategy, and practicing donor conversations (Correct answer)
Reviewing the organization's investment performance
Filing annual state charitable registration documents
Processing staff performance reviews

Correct answer: Building board understanding of fundraising expectations, developing shared strategy, and practicing donor conversations

A board fundraising retreat aligns board members on their philanthropic role, builds confidence for donor conversations, and creates shared ownership of fundraising strategy.

Question 194: What does a 'sustainer' or 'recurring donor' program offer a nonprofit organization?

Increased estate gift commitments
Volunteer labor to support program activities
One-time large gifts that fund capital projects
Predictable, steady revenue through automatically recurring gifts (Correct answer)

Correct answer: Predictable, steady revenue through automatically recurring gifts

Monthly or recurring donor programs provide predictable, sustainable revenue that reduces fundraising costs and improves donor retention rates.

Question 195: What is 'blended giving' in a major gift context?

Blending gifts from multiple family members into one record
Mixing annual fund and event revenue in one gift report
Combining cash gifts with in-kind donations
Combining an outright current gift with a planned gift commitment to maximize total impact and donor benefit (Correct answer)

Correct answer: Combining an outright current gift with a planned gift commitment to maximize total impact and donor benefit

Blended giving combines a donor's current outright gift with a planned (legacy) gift commitment, allowing donors to make a significant current impact while also leaving a lasting legacy.

Question 196: A charitable organization's board member is also the owner of a company being considered for a major vendor contract. This is an example of:

A planned giving opportunity
A conflict of interest requiring disclosure and recusal (Correct answer)
A restricted gift arrangement
Normal board governance practice

Correct answer: A conflict of interest requiring disclosure and recusal

When a board member has a personal financial interest in an organizational decision, it creates a conflict of interest that requires disclosure and typically recusal from the decision.

Question 197: In major gift fundraising, what does the '7 Touches' principle suggest?

A gift officer should make exactly 7 visits per donor per year
Donors who give 7 years in a row qualify as major donors
Seven board members must sign off on all major gift solicitations
A donor needs approximately 7 meaningful contacts before being asked for a major gift (Correct answer)

Correct answer: A donor needs approximately 7 meaningful contacts before being asked for a major gift

The 7 Touches principle suggests that meaningful cultivation and stewardship contacts help build the relationship needed before a major gift ask.

Question 198: A 'campaign readiness assessment' typically evaluates which of the following factors?

The number of social media followers an organization has
The number of grant applications submitted in prior years
Leadership capacity, donor base strength, staff readiness, and organizational credibility (Correct answer)
The organization's building maintenance schedule

Correct answer: Leadership capacity, donor base strength, staff readiness, and organizational credibility

Campaign readiness assessments evaluate organizational factors including volunteer and board leadership, donor pipeline depth, staff capacity, and mission credibility before committing to a major campaign.

Question 199: A 'major gift proposal' should be tailored to the donor primarily because:

It allows the organization to control how the gift is used
It is legally required for gifts above a certain threshold
It demonstrates that the organization understands the donor's specific interests and connects the gift to outcomes they care about (Correct answer)
Generic proposals are forbidden by AFP standards

Correct answer: It demonstrates that the organization understands the donor's specific interests and connects the gift to outcomes they care about

Tailored proposals resonate because they reflect the donor's specific values and interests, showing that the organization listened during cultivation and connecting the gift to outcomes the donor personally cares about.

Question 200: Why is it important for a fundraiser to involve the donor's legal and financial advisors in a planned gift discussion?

Because the financial and legal implications of planned gifts require expert guidance to protect the donor's interests and ensure the gift is properly structured (Correct answer)
Because it eliminates the need for a formal gift agreement
Because advisors will negotiate a lower gift amount
Because it is required by the IRS for all planned gifts

Correct answer: Because the financial and legal implications of planned gifts require expert guidance to protect the donor's interests and ensure the gift is properly structured

Involving the donor's advisors ensures that planned gifts are structured appropriately for the donor's financial and estate planning situation and protects both the donor and the organization.

Question 201: What is the role of staff in supporting board members' fundraising effectiveness?

Staff should do all the asking so board members don't have to
Staff should approve all board member donor communications before they are sent
Staff should prepare briefings, talking points, and logistics support to make board members' donor interactions as effective as possible (Correct answer)
Staff should limit board access to donor information for privacy reasons

Correct answer: Staff should prepare briefings, talking points, and logistics support to make board members' donor interactions as effective as possible

Development staff enable board members to be effective fundraisers by providing research, briefings, talking points, and logistical support that makes their donor conversations well-informed and impactful.

Question 202: What is a 'planned gift'?

A gift that is budgeted in the organization's annual plan
A charitable contribution arranged in advance through legal or financial vehicles, often fulfilled through the donor's estate (Correct answer)
A gift scheduled to be paid in installments over time
A gift from a foundation that is planned in a grant cycle

Correct answer: A charitable contribution arranged in advance through legal or financial vehicles, often fulfilled through the donor's estate

Planned gifts (or legacy gifts) are charitable contributions arranged through estate plans, trusts, annuities, or other financial vehicles, often realized after the donor's lifetime.

Certified Fund Raising Executive (CFRE)

The CFRE exam validates professional fundraising competence across six knowledge domains, covering donor research, gift acquisition, relationship building, volunteer management, leadership, and ethical accountability in nonprofit fundraising.

200

Questions

240 min

Time Limit

70%

To Pass

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