CFRE MCQ 2

Question 1

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

Accepted Answer

Paying a percentage commission based on funds raised

Answer

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.

Question 2

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

Accepted Answer

Donor lifetime value (LTV)

Answer

Donor lifetime value (LTV) measures the total net revenue a donor generates over their entire relationship with the organization, capturing long-term relationship worth.

Question 3

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

Accepted Answer

A CRUT allows additional contributions; a CRAT does not allow additional contributions

Answer

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.

Question 4

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

Accepted Answer

Assess community readiness and gauge donor capacity and inclination

Answer

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.

Question 5

Which statement about major gift cultivation best reflects best practice?

Accepted Answer

Cultivation should be tailored to the donor's interests and may take months or years

Answer

Effective major gift cultivation is individualized, based on each prospect's interests and readiness, and the timeline varies significantly from donor to donor.

CFRE - Certified Fund Raising Executive Practice Test

CFRE - Certified Fund Raising Executive Practice Test

CFRE MCQ 2