CFRE CFRE 4 — Questions and Answers
Question 1: A bequest intention that is documented but not legally binding is called a:
- Irrevocable trust
- Revocable pledge
- Soft credit or expectancy (Correct answer)
- Testamentary annuity
Correct answer: Soft credit or expectancy
A soft credit or expectancy is recorded when a donor has communicated a planned gift intention (such as a bequest) but the gift is not yet legally committed and can be changed.
Question 2: The AFP (Association of Fundraising Professionals) Standards of Practice require members to:
- Share donor lists with peer organizations upon request
- Disclose conflicts of interest and act in the best interest of donors and organizations (Correct answer)
- Accept only salary-based compensation from a single employer
- Limit solicitation to donors with prior giving history
Correct answer: Disclose conflicts of interest and act in the best interest of donors and organizations
AFP Standards require members to be transparent, disclose real or perceived conflicts of interest, and always act ethically in the interests of both donors and the organizations they serve.
Question 3: In a capital campaign, the 'quiet phase' refers to:
- The period when no solicitations are made to avoid donor fatigue
- Confidential solicitation of lead gifts before the public announcement (Correct answer)
- The final wrap-up after the public goal is met
- Silent auction fundraising events held during the campaign
Correct answer: Confidential solicitation of lead gifts before the public announcement
The quiet (or silent) phase of a capital campaign involves soliciting major and lead gifts from top prospects before the public launch, typically targeting 50–70% of the goal during this phase.
Question 4: When segmenting a direct mail list, LYBUNT refers to donors who gave:
- Last year but unfortunately not this year (Correct answer)
- Large yields by understanding new trends
- Last year but unchosen now for targeting
- Lifetime yearly benefits until now terminated
Correct answer: Last year but unfortunately not this year
LYBUNT stands for 'Last Year But Unfortunately Not This Year,' identifying lapsed donors from the immediately prior year who are prime reactivation targets.
Question 5: Which factor most strongly predicts whether a donor will make a major gift?
- The donor's age and geographic location
- Previous giving history combined with capacity and affinity (Correct answer)
- The organization's social media follower count
- Whether the donor attended a special event in the past year
Correct answer: Previous giving history combined with capacity and affinity
The three key predictors of major giving are capacity (financial ability), affinity (passion for the mission), and prior giving history—often called the 'golden triangle' of major gift fundraising.
Question 6: A 'named gift opportunity' is primarily used to:
- Recognize anonymous donors without revealing their identity
- Incentivize major gifts by offering naming rights to a space or program (Correct answer)
- Name a fundraising campaign after the executive director
- Identify grant opportunities by funder name
Correct answer: Incentivize major gifts by offering naming rights to a space or program
Named gift opportunities allow donors to attach their name (or a loved one's name) to a building, room, fund, or program in exchange for a major gift, providing tangible recognition.
Question 7: The primary purpose of a gift acceptance policy is to:
- 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)
- Set minimum gift amounts for board members
- Determine how gifts will be spent once received
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.
CFRE CFRE 4
A bequest intention that is documented but not legally binding is called a: