CNC Fundraising & Resource Development 3 — Questions and Answers
Question 1: In a capital campaign, what is the 'quiet phase' typically characterized by?
- Mass marketing to the general public
- Soliciting lead and major gifts before public announcement (Correct answer)
- Board training on social media fundraising
- Launching a crowdfunding website
Correct answer: Soliciting lead and major gifts before public announcement
The quiet phase focuses on securing 50–70% of the campaign goal from top donors before announcing the campaign publicly to build momentum and credibility.
Question 2: What does 'LYBUNT' mean in nonprofit donor database terminology?
- Long-Year Benefactor Under New Terms
- Last Year But Unfortunately Not This year (Correct answer)
- Loyal Yearly Benefactor Under Normal Tracking
- Largest Year-Based Unrestricted Nonprofit Transfer
Correct answer: Last Year But Unfortunately Not This year
LYBUNT identifies donors who gave last year but have not yet given this year, making them a priority re-engagement segment.
Question 3: A nonprofit hosting a fundraising gala charges $200 per ticket, and each ticket costs $75 to fulfill. A donor pays $200. What is the tax-deductible portion of their ticket purchase?
- $200
- $125 (Correct answer)
- $75
- $0
Correct answer: $125
The deductible portion is the amount paid minus the fair market value of goods/services received; $200 – $75 = $125.
Question 4: Which type of corporate giving involves a company donating a percentage of product sales to a nonprofit partner?
- Corporate foundation grant
- Cause-related marketing (Correct answer)
- In-kind contribution
- Matching gift program
Correct answer: Cause-related marketing
Cause-related marketing ties corporate revenue from sales directly to charitable donations, benefiting both the company's brand and the nonprofit.
Question 5: What is the primary ethical concern with 'commission-based' fundraising compensation?
- It is prohibited by the IRS
- It can incentivize aggressive tactics that compromise donor relationships and integrity (Correct answer)
- It eliminates the need for donor stewardship
- It is only legal in certain states
Correct answer: It can incentivize aggressive tactics that compromise donor relationships and integrity
AFP's Code of Ethical Standards prohibits commission-based compensation because it can pressure fundraisers to prioritize short-term revenue over donor-centered relationships.
Question 6: An endowment is best described as which of the following?
- A short-term operating reserve fund
- A permanently restricted fund whose principal is invested and only income is spent (Correct answer)
- A line item in the annual fundraising budget
- A federal grant earmarked for capital projects
Correct answer: A permanently restricted fund whose principal is invested and only income is spent
Endowments preserve the principal in perpetuity while allowing the organization to spend only the investment income, providing long-term financial stability.
Question 7: Which prospect research tool is used to estimate a donor's capacity to give based on real estate holdings, SEC filings, and business affiliations?
- Wealth screening (Correct answer)
- Psychographic profiling
- RFM analysis
- Affinity mapping
Correct answer: Wealth screening
Wealth screening uses publicly available data sources to estimate a prospect's financial capacity, helping prioritize major gift cultivation.
CNC Fundraising & Resource Development 3
In a capital campaign, what is the 'quiet phase' typically characterized by?