CFRE Annual Giving and Direct Mail 3

Question 1

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

Accepted Answer

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

Answer

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

Question 2

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

Accepted Answer

Writing in a personal, conversational tone with a clear, specific ask

Answer

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

Question 3

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

Accepted Answer

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

Answer

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

Question 4

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?

Accepted Answer

The program has a concerning donor retention problem despite revenue growth

Answer

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 5

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

Accepted Answer

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

Answer

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

CFRE - Certified Fund Raising Executive Practice Test

CFRE - Certified Fund Raising Executive Practice Test

CFRE Annual Giving and Direct Mail 3