CFRE CFRE 2 — Questions and Answers
Question 1: Which fundraising method typically yields the highest average gift size?
- Direct mail appeals
- Planned giving and bequests (Correct answer)
- Special events
- Social media crowdfunding
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 2: The 'moves management' system in major gift fundraising refers to:
- Relocating donor files between staff members
- A series of planned interactions to cultivate and steward donors (Correct answer)
- Managing volunteer movement during events
- Transferring funds between campaign accounts
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 3: A gift annuity is best described as:
- An annual pledge renewed each year by the donor
- A contract where a donor gives assets in exchange for fixed lifetime payments (Correct answer)
- A government grant tied to annualized reporting
- A matching gift program sponsored by an employer
Correct answer: A contract where a donor gives assets in exchange for fixed lifetime payments
A charitable gift annuity is a planned giving vehicle in which a donor transfers assets to a nonprofit in exchange for a fixed income stream for life, with the remainder benefiting the organization.
Question 4: Under the CFRE Code of Ethical Principles, which action is expressly prohibited?
- Accepting gifts from corporations
- Receiving compensation based on a percentage of funds raised (Correct answer)
- 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 5: Which metric best measures the efficiency of a fundraising program?
- Total number of donors acquired
- Cost to raise a dollar (CTRD) (Correct answer)
- Size of the development team
- Number of grant applications submitted
Correct answer: Cost to raise a dollar (CTRD)
Cost to raise a dollar (CTRD) divides total fundraising expenses by total funds raised, providing a standard efficiency benchmark used by nonprofits and watchdog organizations.
Question 6: A 'case for support' document primarily serves to:
- Document the legal status of the nonprofit
- Articulate why a donor should give to the organization (Correct answer)
- Outline staff compensation and benefits
- Report financial results to the IRS
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 7: In prospect research, 'wealth screening' is used primarily to:
- Verify a donor's tax-exempt status
- Identify potential donors' capacity to give major gifts (Correct answer)
- Screen volunteers for background checks
- Assess a nonprofit's financial health
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.
CFRE CFRE 2
Which fundraising method typically yields the highest average gift size?