CNE Financial Management & Fundraising 1

Question 1

What is the primary goal of nonprofit financial management?

Accepted Answer

Ensuring effective use of resources.

Answer

Maximizing profits.

Answer

Minimizing expenses only.

Answer

Avoiding audits.

Question 2

Which financial statement provides a snapshot of an organization’s assets and liabilities?

Accepted Answer

Balance sheet.

Answer

Income statement.

Answer

Cash flow statement.

Answer

Budget report.

Question 3

What is a key characteristic of a successful fundraising campaign?

Accepted Answer

Clear goals and donor engagement.

Answer

Vague goals.

Answer

No communication with donors.

Answer

Ignoring donor feedback.

Question 4

Which budgeting method is commonly used in nonprofits?

Accepted Answer

Zero-based budgeting.

Answer

Incremental budgeting.

Answer

Fixed budgeting.

Answer

Flexible budgeting.

Question 5

What is donor stewardship?

Accepted Answer

Maintaining relationships and showing appreciation.

Answer

Soliciting new donors.

Answer

Ignoring donor feedback.

Answer

Cutting fundraising costs.

Question 6

Which tool helps track and manage donor information?

Accepted Answer

Donor management system.

Answer

Spreadsheet.

Answer

Accounting software only.

Answer

Email marketing platform only.

Question 7

What is a restricted fund in nonprofit finance?

Accepted Answer

Funds designated for specific uses.

Answer

Funds without donor restrictions.

Answer

Funds used for general expenses.

Answer

Funds held in savings accounts only.

Question 8

Which financial ratio indicates liquidity in nonprofits?

Accepted Answer

Current ratio.

Answer

Debt to equity ratio.

Answer

Return on investment.

Answer

Profit margin.

Question 9

Why is transparency important in nonprofit financial management?

Accepted Answer

It builds trust and accountability.

Answer

It hides financial problems.

Answer

It delays reporting.

Answer

It reduces fundraising.