CFRE Flashcards

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

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.

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

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.

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

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.

A 'challenge grant' in fundraising is designed to:

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.

Donor retention rate is calculated by dividing:

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.

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

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.

A nonprofit's 'development audit' is best described as:

Answer: A systematic review of the fundraising program's strengths, weaknesses, and opportunities

A development audit is an internal or external assessment that evaluates all aspects of a fundraising program—from donor relations and systems to staffing and strategy—to identify improvement opportunities.