Practice Test Geeks(CNE) Certified Nonprofit Executive Practice Test
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Financial Management & Fundraising Flashcards

7 cards from real CNE practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Financial Management & Fundraising flashcards as text

  1. A nonprofit receives a $50,000 grant restricted for program delivery. Where should this be classified on the statement of financial position?

    Answer: With donor restrictions net assets

    Grants with donor-imposed restrictions are classified as net assets with donor restrictions per ASC 958.

  2. Which fundraising cost ratio benchmark is commonly cited by watchdog organizations like Charity Navigator as a warning threshold?

    Answer: Fundraising costs above 35% of total expenses

    Most watchdog groups flag fundraising costs exceeding 35% of total expenses as potentially inefficient.

  3. A planned giving program receives a bequest commitment from a living donor. How should this be recorded?

    Answer: Only upon receipt after the donor's death

    Bequest intentions are not legally binding and should only be recognized as revenue when received.

  4. Under IRS regulations, what is the maximum percentage of a nonprofit's activities that can be lobbying before it risks losing 501(c)(3) status under the substantial part test?

    Answer: No fixed percentage — 'substantial' is determined case by case

    The IRS 'substantial part test' has no fixed percentage; it evaluates facts and circumstances rather than a bright-line rule.

  5. A nonprofit's current ratio is 0.8. What does this indicate?

    Answer: Current liabilities exceed current assets, signaling liquidity risk

    A current ratio below 1.0 means current liabilities exceed current assets, indicating potential difficulty meeting short-term obligations.

  6. Which of the following best describes a 'challenge grant' in nonprofit fundraising?

    Answer: A matching gift where a donor pledges funds contingent on the nonprofit raising a set amount from others

    A challenge grant incentivizes additional fundraising by pledging donor funds only if the organization raises a matching amount from other sources.

  7. When preparing IRS Form 990, Schedule B is used to report what information?

    Answer: Schedule of contributors who gave $5,000 or more

    Schedule B requires nonprofits to list contributors who gave $5,000 or more during the year, though it is generally not publicly disclosed.