Practice Test Geeks(CNC) Certified Nonprofit Consultant Practice Test
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Nonprofit Organization Management Flashcards

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  1. Which IRS form must most tax-exempt organizations with gross receipts over $200,000 file annually to maintain transparency and compliance?

    Answer: Form 990

    Form 990 is the annual information return required by the IRS for tax-exempt organizations, disclosing financials, governance practices, and program activities.

  2. A nonprofit's strategic plan identifies a $2 million capital campaign goal. Which component is MOST critical to campaign success?

    Answer: Securing lead gifts from board members and major donors before the public phase

    Capital campaigns follow a 'quiet phase' where 60-70% of the goal is secured from lead donors before a public launch to establish momentum and credibility.

  3. What does the term 'earned revenue' mean in the context of nonprofit financial management?

    Answer: Revenue generated through fees for services, product sales, or program charges

    Earned revenue refers to income a nonprofit generates by charging for its services or products, as opposed to contributions and grants received without an exchange.

  4. A consultant discovers that a nonprofit's executive director has been approving their own expense reimbursements without board oversight. This violates which principle?

    Answer: Internal controls / segregation of duties

    Proper internal controls require that no single person can both initiate and approve financial transactions, preventing fraud and error.

  5. Which type of nonprofit organization is structured to support another charitable organization through fundraising and asset management?

    Answer: Supporting organization (509(a)(3))

    A supporting organization under IRC 509(a)(3) exists to benefit, support, or carry out the purposes of one or more specified public charities.

  6. In nonprofit human resources management, what is the purpose of an employee handbook?

    Answer: To communicate workplace policies, expectations, and employee rights consistently

    An employee handbook ensures all staff understand organizational policies, reducing legal risk and promoting consistent treatment of employees.

  7. Which of the following BEST describes the concept of 'theory of change' in nonprofit program design?

    Answer: A framework explaining how program activities lead to desired long-term outcomes

    A theory of change articulates the logical pathway from inputs and activities through outputs to the ultimate social impact an organization seeks to achieve.