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
A nonprofit is considering a capital campaign. What is the primary purpose of a feasibility study conducted before launch?
Answer: To assess whether the community will support the goal and identify potential lead donors
A feasibility study evaluates community readiness, donor capacity, and leadership support before committing to a capital campaign goal.
Which financial statement shows a nonprofit's revenues, expenses, and changes in net assets over a period of time?
Answer: Statement of Activities
The Statement of Activities is the nonprofit equivalent of an income statement, showing revenues, expenses, and net asset changes.
An organization receives a multi-year grant of $300,000 payable over three years with no conditions beyond reporting. How should year one revenue be recognized?
Answer: The full $300,000 — all years recognized upfront if unconditional
Under ASC 958, unconditional multi-year pledges are recognized in full at the time of the pledge, discounted to present value if material.
What is the purpose of a nonprofit's investment policy statement (IPS)?
Answer: To establish guidelines for asset allocation, risk tolerance, and manager selection for the organization's investments
An IPS governs how invested assets are managed, setting parameters for risk, return objectives, and spending policies.
A major donor wants to establish a fund within the nonprofit that will bear their family name and support a specific cause indefinitely. This is best described as a:
Answer: Named endowment fund
A named endowment fund is permanently invested with income used for a donor-designated purpose, honoring the donor's family.
Under the Uniform Prudent Management of Institutional Funds Act (UPMIFA), what standard governs how nonprofits manage endowment funds?
Answer: Prudent investor standard considering the portfolio as a whole
UPMIFA requires nonprofits to apply a prudent investor standard, evaluating investments in the context of the total portfolio.
What is 'cause marketing' in the context of nonprofit fundraising?
Answer: A collaboration between a nonprofit and a for-profit company where the company promotes the cause and donates a portion of sales
Cause marketing links a commercial company's sales to donations to a nonprofit, benefiting both the brand image and the organization's funding.