Certified Fund Raising Executive (CFRE) — Questions and Answers

Question 1: Which concept describes the cultivation strategy of moving a donor progressively from awareness to engagement to investment?

Philanthropic arc development
Gift ladder progression
Donor pipeline or moves management (Correct answer)
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 2: What is 'board engagement' beyond financial giving?

Board members managing day-to-day fundraising operations
Board members actively participating in advocacy, stewardship, cultivation events, and volunteer recruitment in support of fundraising goals (Correct answer)
Board members attending every staff meeting
Board members approving all grant applications

Correct answer: Board members actively participating in advocacy, stewardship, cultivation events, and volunteer recruitment in support of fundraising goals

Board engagement encompasses all the ways members contribute to resource development beyond writing a check, including opening doors, hosting events, stewarding donors, and advocating for the mission.

Question 3: The 'pyramid of giving' model suggests that an organization should:

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

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

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

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

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

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

Paying a base salary plus performance bonus
Offering equity participation in the nonprofit
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 7: What is the purpose of the 'accountability' component in fundraising ethics?

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)
To limit the number of solicitations sent annually

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 8: A SWOT analysis in fundraising strategic planning stands for:

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

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

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

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

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

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 11: 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 advisors will negotiate a lower gift amount
Because it is required by the IRS for all planned gifts
Because it eliminates the need for a formal gift agreement

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 12: A present made in any of the following ways:

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

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

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)
Board members regularly introduce the development director to their contacts
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 14: What is 'donor fatigue' in fundraising practice?

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

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

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

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

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

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

Record it as contingent revenue until the final payment is made
Record the full present value of the pledge receivable in the year the pledge is made, discounted for time value (Correct answer)
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 18: What does a 'sustainer' or 'recurring donor' program offer a nonprofit organization?

One-time large gifts that fund capital projects
Volunteer labor to support program activities
Increased estate gift commitments
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 19: The primary purpose of a gift acceptance policy is to:

Set minimum gift amounts for board members
Determine how gifts will be spent once received
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)

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 20: 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 is tax-exempt; major giving is not
Annual giving requires a board vote; major gifts do 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 21: 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 stable and no changes are needed
The program is declining because donor count fell
The program has a concerning donor retention problem despite revenue growth (Correct answer)
The program is growing because total revenue increased

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

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

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

Ignore it to protect organizational reputation
Report it through appropriate channels, which may include legal authorities (Correct answer)
Keep it confidential as part of professional loyalty
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 24: Which of the following is an example of proactive stewardship?

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

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

Return the gift immediately without contacting the donor
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)

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 26: 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?

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

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

life interest
designated gift
associates
unrestricted gift (Correct answer)

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 28: 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.

Timing
Advance gifts (Correct answer)
Life income gift
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 29: In a major gifts campaign, what is the recommended ratio of prospects to gifts needed at each level?

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

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 30: 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
Proceed if the gift amount is below a certain threshold
Accept the gift quickly before the donor changes their mind
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.

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.

Questions

35 min

Time Limit

70%

To Pass

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