MCQ Flashcards

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

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.

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

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.

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

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.

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

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.

Which statement about major gift cultivation best reflects best practice?

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.

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

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.

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

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.