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
Which document outlines the rules and procedures governing a nonprofit's internal operations, such as meeting frequency and officer roles?
Answer: Bylaws
Bylaws are the internal governance document that establishes operating procedures, officer responsibilities, and meeting requirements for a nonprofit.
A nonprofit's executive director wants to launch a new program outside the organization's stated mission. What is the FIRST step the board should take?
Answer: Assess whether the program aligns with the mission or if a mission amendment is needed
The board must first determine whether the new program fits the existing mission before proceeding, as mission drift can jeopardize tax-exempt status.
What is the primary purpose of an annual audit for a nonprofit organization?
Answer: To provide independent verification of financial statements and internal controls
An independent audit provides assurance to stakeholders that the nonprofit's financial statements are accurate and that proper internal controls exist.
Which term describes a situation where a board member has a personal financial interest in a vendor contract being considered by the nonprofit?
Answer: Conflict of interest
A conflict of interest arises when a board member's personal interest could improperly influence their decision-making on behalf of the organization.
A nonprofit organization receives a $500,000 grant that must be used solely for building construction. How should this be classified on the financial statements?
Answer: Temporarily restricted net assets
Funds restricted by a donor for a specific purpose are classified as temporarily restricted (now called 'net assets with donor restrictions' under ASC 958) until the restriction is met.
What governance best practice involves separating the roles of board chair and executive director to ensure checks and balances?
Answer: Dual leadership model
Maintaining separate individuals in the board chair and executive director roles prevents concentration of power and supports effective oversight.
Which of the following is an example of program efficiency as measured in nonprofit performance evaluation?
Answer: The percentage of total expenses spent directly on mission-related activities
Program efficiency measures how much of an organization's spending goes directly to its mission, typically expressed as a percentage of total expenses.