Nonprofit Organization Management Flashcards
7 cards from real CNC practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Nonprofit Organization Management flashcards as text
A nonprofit is experiencing rapid growth and the executive director is struggling to manage all departments. Which organizational management solution is MOST appropriate?
Answer: Create a senior leadership team with department directors reporting to the ED
Building a senior leadership team with clear reporting lines is the standard approach to scaling management capacity as a nonprofit grows.
What is the role of an advisory board in a nonprofit organization, as distinct from the governing board?
Answer: Advisory boards provide expertise and connections without legal governance authority
Advisory boards offer subject matter expertise, community connections, and credibility but have no legal authority over organizational decisions.
Which risk management practice involves purchasing insurance to cover the personal liability of nonprofit board members for their governance decisions?
Answer: Directors and Officers (D&O) liability insurance
Directors and Officers (D&O) insurance protects board members from personal financial liability arising from alleged wrongful acts in their governance roles.
A nonprofit's revenue is 80% dependent on a single government grant. Which financial management strategy should the consultant recommend?
Answer: Diversify revenue sources to reduce concentration risk
Revenue diversification reduces financial vulnerability; over-reliance on a single funder creates existential risk if that funding is reduced or eliminated.
Which legal doctrine holds nonprofit board members to a standard of acting as a 'reasonably prudent person' would in managing the organization's affairs?
Answer: Duty of care
The duty of care requires board members to make decisions with the diligence and prudence of a reasonably careful person in a similar position.
What is 'capacity building' in the context of nonprofit management consulting?
Answer: Strengthening an organization's systems, people, and practices to achieve its mission more effectively
Capacity building refers to investments in organizational infrastructure — such as leadership, technology, and financial management — that improve long-term effectiveness.
A nonprofit consultant is helping a client board evaluate its own performance. Which tool is MOST commonly used for this purpose?
Answer: A board self-assessment survey covering governance practices and effectiveness
Board self-assessment surveys are a widely used governance tool that help boards identify strengths, gaps, and areas for improvement in their collective performance.