CFRE MCQ 3

Question 1

Under IRS regulations, a donor who receives a benefit in exchange for a charitable contribution must be informed of:

Accepted Answer

The fair market value of the benefit received so they can calculate the deductible portion

Answer

IRS rules require organizations to provide a good faith estimate of the fair market value of any benefit received so donors can calculate their net deductible contribution.

Question 2

Which type of prospect research tool aggregates publicly available data such as real estate holdings, SEC filings, and political donations to estimate donor capacity?

Accepted Answer

Wealth screening software

Answer

Wealth screening software uses publicly available data sources to estimate a prospect's financial capacity to give, helping prioritize major gift outreach.

Question 3

A donor bequeaths 5% of their estate to a nonprofit in their will. This gift is best classified as:

Accepted Answer

A testamentary bequest

Answer

A testamentary bequest is a planned gift made through a donor's will that transfers assets to a nonprofit upon the donor's death.

Question 4

In the context of annual fund appeals, what does 'LYBUNT' stand for?

Accepted Answer

Last Year But Unfortunately Not This year

Answer

LYBUNT stands for 'Last Year But Unfortunately Not This Year' — donors who gave in the prior fiscal year but have not yet given in the current year, making them a key lapsed-donor segment.

Question 5

Which principle guides the ethical use of donor information in a nonprofit's database?

Accepted Answer

Donor information should be used only for purposes consistent with the donor's reasonable expectations and organizational mission

Answer

Ethical stewardship requires that donor information be used only in ways donors would reasonably expect and consistent with organizational mission, honoring donor trust.

CFRE - Certified Fund Raising Executive Practice Test

CFRE - Certified Fund Raising Executive Practice Test

CFRE MCQ 3