CAP GS859 Quiz Questions with 100% correct answers rated A+, Exams of Nursing

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CAP GS859 Quiz Questions

The lecture for Assignment 1, America's Nonprofit Sector, suggests that which of these is (are) great American virtues? I. self-reliance II. mutual aid - correct answer ✔✔The correct answer is C. Both self-reliance and mutual aid were discussed as the two great American virtues. Government funding of the nonprofit sector takes all of these forms EXCEPT A)contracts B)vouchers C)reimbursements D)gifts - correct answer ✔✔The correct answer is D. The government is not a philanthropist. The money from the government comes from contracts with the charity, vouchers that the recipient can use to purchase services from the nonprofit, and reimbursement by the government of covered costs incurred by the user of a nonprofit service. What is the IRS category for a political action committee (PAC)? A)501(c) B)501(c) C)501(c) D)501(c)6 - correct answer ✔✔The correct answer is A. Lobbying organizations are 501(c)4s. 501(c)5s are unions. A 501(c)6 is a business league. The organizations we usually have in mind when we talk about nonprofits are 501(c)3s. Generally, we pay for and receive the benefit in commerce. Often in a nonprofit setting, we give and others benefit. Yet in certain settings the bulk of a charity's revenue may come from those who currently and directly benefit from it. All of these are good examples EXCEPT A)a symphony

B)a university C)a hospital D)a food bank - correct answer ✔✔The correct answer is D. Many successful nonprofits serve those who have the money. They take in funds as fees or tuition or in ticket sales. In addition, those served by the nonprofit may donate funds to perpetuate the institution by which they and their family have been touched. A social service organization, however, like a food bank, takes in resources from one group and provides them at low or no cost to those who cannot afford to pay or give much. Over time these social services organizations have gravitated toward government funding through contracts, grants, and reimbursement. As such funding declines, as it seems likely to do, this raises the question of who will step up, why, and how quickly. Which of these are examples of civic activism, as Salamon uses the phrase? I. the Civil Rights Movement II. the Womens Movement - correct answer ✔✔The correct answer is C. Both movements are examples of civic activism: both organize for a social cause. About how many 501(c)3 organizations are there in the U.S.? A)over one million B)between seven hundred thousand and one million C)between five hundred thousand and seven hundred thousand D)fewer than five hundred thousand - correct answer ✔✔The correct answer is A. The total, taken from Salamon's data, seems to be a bit more than 1.2 million. Which of these is the smallest source of donated revenue for nonprofits? A)living individuals B)private foundations C)corporations D)bequests - correct answer ✔✔The correct answer is C. Corporate giving is the smallest source (5%) of capital.

Carla made a fortune running a Wall Street firm that bought out, rebuilt, and sold privately held companies. Upon retiring, she started a foundation to apply market principles to social ills. The foundation targets recidivism: the tendency of convicts to return to prison having committed further crimes. The foundation buys out a local bakery, using it to hire and train those recently released from prison. The bakery is set up as a for-profit with a social purpose. The bakery aims to make 5% return on investment, and generally makes 1-5% per year. This example best represents which of Salamon's four poles at work in nonprofits? A)voluntarism B)civic activism C)professionalism D)commercialism - correct answer ✔✔The correct answer is D. This is commercialism, in Salamon's terminology, since market methods drive the process. Calling it "commercialism" might be insulting to such a funder. The funder is more likely to use terms like "social venture," "double bottom line investing," or "social entrepreneurialism." Which of the sentences below best exemplifies solidarity in the way Salamon uses the term, as a motive of civic engagement? A)Tom forms a social venture and engages his employees in making a profit while doing good. B)Tammy, a physician, works in a nonprofit hospital serving the poor. C)Tad is an investor who wants social return as well as financial return on his investment. He achieves that by investing in a firm that provides low-cost solar stoves to the developing world. D)Vera joins a women's giving circle which meets weekly to share ideas and encourage one another in giving to projects that aid women and young girls. - correct answer ✔✔The correct answer is D. Vera is showing solidarity with, or in community with, women funders as well as the women and girls served by the funding. Mel says, "Cut to the chase: I have prostate cancer. I formed a nonprofit to find a cure for prostate cancer, to counsel those with the disease, and to lobby for more government funding for this important cause." Which motive(s), as discussed by Salamon, does Mel embody?

I. service provision II. problem identification and advocacy - correct answer ✔✔The correct answer is C. Mel sees his nonprofit as identifying and advocating for a cause (prostate cancer) and ultimately in providing a cure; meanwhile the organization provides a service (counseling). In competing for earned revenue and for government consumer-side subsidies, all of these are advantages that for-profit providers enjoy, EXCEPT A)higher salaries B)greater access to capital markets C)great ability to grow to scale quickly D)solidarity - correct answer ✔✔The answer is D. What nonprofits do have as a competitive advantage is their connection to mission, traditions, and a sense of community (solidarity). A Catholic school, a Baptist hospital, a Jewish day care center, and a Quaker nursing home, for example, will compete with for-profit providers of similar services, but the connection to mission, in community with their stakeholders, makes them special to those stakeholders. A large national foundation commissions a study of recidivism in Georgia (convicts being released from prison only to be sentenced to prison for a newly committed crime). The study is conducted by experts who conclude that the primary cause of recidivism is the lack of job training available to convicts. The foundation then consults with education experts and a panel drawn from prison management. The result is the funding of a nonprofit that teaches job skills to prisoners on parole. The teaching is conducted by experienced trainers from several industries. Results of the program are measured with quarterly reports to the foundation. Which of Salamon's four nonprofit poles best represents this approach? A)voluntarism B)civic activism C)professionalism D)commercialism - correct answer ✔✔The correct answer is C. This is a classic example of relying on experts and professionals to get the job done. The model utilizes social science. Lester Salamon flags a number of tensions between how the public thinks about nonprofits and how nonprofits actually operate today. Each of these is a tension he mentions, EXCEPT

A)The public thinks nonprofits are supported mostly by gifts, but in reality the sector is supported primarily by earned income and secondarily by government money. B)The public thinks of nonprofits as neighborly organizations that embody traditions of solidarity, community, care, and concern, but in reality many are managed to a bottom line that focuses primarily on getting results in a businesslike fashion C)The public thinks of the nonprofit sector as being made up of volunteers, but in reality nonprofit work is increasingly professionalized, run and staffed with people who hold specialized degrees, which are often in the science of nonprofit management. D)Overall, the public has a good understanding of the strengths and weaknesses of - correct answer ✔✔The correct answer is D. Generally the public is not well informed about nonprofits and holds outdated views based on what Salamon calls a "Norman Rockwell vision" of a bygone America. In this vision, charities are largely made up of volunteers doing good, supported primarily by charitable donations. The tensions noted by Salamon are between this outdated Norman Rockwell vision and the realities of today's nonprofit sector. The public sees nonprofits as values guardians, driven by idealistic volunteers and activists and inspired by a sense of community in the old fashioned way of neighbor helping neighbor. In reality, though, nonprofits are increasingly run by experts and managed as if they were businesses. Commercialism and professionalism, in Salamon's terms, have prevailed. He sees the tension between civic activism and values guardianship as dangerous because nonprofits enjoy the goodwill of the public and enjoy tax benefits, in part because of the outdated vision the public holds of nonprofits as good-hearted entities operating outside the market, and largely outside government, as a third sector in which ideals prevail. Insofar as the public comes to understand that nonprofits are operating almost like businesses, and often relying on government funds, the public may lose faith in the sector and come to question why nonprofits expect tax benefits. Salamon makes which point(s) below? I. Nonprofits are increasingly being held to a businesslike standard and are pulled towards commercialism. II. Nonprofits have certain key values that distinguish them from both government and businesses. Nonprofits are ideally productive, empowering, effective, reliable, responsive, and caring. - correct answer ✔✔The correct answer is C. Both are correct. Salamon sees the sector being pulled towards commercialism and also becoming increasingly dependent on government funding. Hence it is increasingly bureaucratic and manages within government rules and procedures. At the same time, however, Salamon believes that the heart and soul of the sector lies in its defining and distinctive qualities: productive, empowering, effective, reliable, responsive, and caring. He feels that to protect and preserve itself, the sector must assert these defining, value-based differences and not merely initiate business or court government funding. From a CAP® standpoint this means leading with above-the-line

missions, visions, and values at the nonprofit; following through in a businesslike way; and completing necessary tasks Jane organizes a drug prevention program for her local high school, enlisting other parents and getting it done with minimal resources. Which of Salamon's four nonprofit poles does Jane's organization best represent? A)voluntarism B)professionalism C)civic activism D)commercialism - correct answer ✔✔The correct answer is A. This is a classic example of volunteering to get things done. This is what Tocqueville honored in the American character and considered unique about Americans. Americans do not wait for the state; they do it themselves through informal or formal associations. With respect to nonprofit legitimacy, which statement(s) below is (are) true? I. A public charity must, by definition, have a broad base of public support. II. Even small gifts demonstrate that givers support the organization. - correct answer ✔✔The correct answer is C. Both are true. Even though nonprofits often generate the bulk of their gifts from a small number of very large donors, the smaller gifts are important, not only for the money, but also as an indication of broad public support. A public charity has to have that support to be perceived as legitimate. Mabel has many badges on Facebook which indicate her preferred charities to which she has given a few dollars each. Mabel is a good example of which of Salamon's main motives for civic engagement? A)problem identification and advocacy B)solidarity C)expressive function D)commercialism - correct answer ✔✔The correct answer is C. Mabel's badges express her social identity. They are markers or indications of the social identity she wishes to present. This is not to say the other motives need be absent, but displaying one's preferred charities in a public space in a way that focuses on oneself is an expressive act or social gesture.

Which phrase(s) describe(s) the term "anomie"? I. social isolation II. the loneliness of the urban crowd - correct answer ✔✔The correct answer is C. The term may sound academic, but the social ill it designates is omnipresent and chilling. Anomie refers to a situation in which members of a society or group are given little guidance or standards in regard to determining ethical courses of action. It is the breakdown of social bonds between an individual and the community, e.g. under unruly scenarios resulting in fragmentation of social identity and rejection of self-regulatory values. It was popularized by French sociologist Émile Durkheim in his influential book Suicide (1897). When we discuss civil society and the nonprofit sector in purely economic terms (as a way to get results for every dollar invested), we may neglect the role civil society plays as an antidote to "anomie." This would be an antidote to the cold sense that we are alone in this world, using and being used by others, solely as means to an end. We are without any bonds of love, care, or concern connecting us. One of the results certain nonprofits foster is a more cohesive self in community with others. Government support for nonprofit services can come from which of these? I. Provider Side: funding the service through grants and contracts between the government and the nonprofit provider II. Consumer Side: funding the service provision by giving the consumer service vouchers, reimbursements, tax credits, or other subsidies - correct answer ✔✔The correct answer is C. Both approaches are common. In response to conservative legislators, there has been a shift away from direct grants and contracts to consumer subsidies since the time of the Great Society. This introduces a degree of market discipline; the consumer is expected to shop for the best cost and service (for example, from medical or educational providers). Vouchers and reimbursements promote competition in which way(s)? I. They encourage consumers to shop around to find the best nonprofit provider of a service. II. They encourage consumers to shop around to see if a for-profit provides the best service. - correct answer ✔✔The correct answer is C. Both are true. The idea is to combine government money with free market principles of consumer choice. Who provides the best education? Heart operations? Nursing home care? Increasingly, consumers are using government consumer-side subsidies to purchase services from for-profits. This has led to nonprofits becoming more and more commercial in their own right Lester Salamon suggests that nonprofits exist in a force field with four poles. All of these choices are among the four he mentions, EXCEPT A)voluntarism

B)civic activism C)professionalism D)faith - correct answer ✔✔The correct answer is D. Faith is not mentioned. It would most likely fit under voluntarism. The fourth pole, which does not appear as an answer choice, is commercialism. That is his term for what some would call social venture philanthropy, impact investing, markets for good, or other vehicles that harness market mechanisms. Which statement is true with respect to giving as a percentage of GDP? A)It has remained constant for decades at around 2%. B)It has remained constant for decades at 5%. C)It has fluctuated between 2-5% depending on the state of the economy. D)It has fluctuated between 2-5% depending on the tax laws. - correct answer ✔✔The correct answer is A. Giving has not changed more than a little as a percentage of GDP. Regardless of economic conditions and changes in the tax laws, the percentage has hovered between 1.6 and 2.1% of GDP since 1977. "I am all about getting results. I expect nonprofits to get results. I am perfectly happy to invest in a for- profit, if it gets better results in a particular area than nonprofits do. The legal form of the entity is of no importance to me. I am interested in getting the best results possible for every dollar invested." With respect to this person's views, which statement(s) below is (are) true? I. This person's view of nonprofits is closest to commercialism on Salamon's chart of the four poles in the nonprofit force field. II. This person exemplifies the views associated with social entrepreneurialism and impact investing. - correct answer ✔✔The correct answer is C. Both are true. Many of those taking this course, particularly advisors, will consider the statements made here to be educated commonsense. "Of course it is all about results! What else could it possibly be about? It has to be about cost-benefit analysis. What results per after tax dollar? Show me the spreadsheet! I demand to see it. This has to be like investing. If it is not, why am I here?" Salamon would reply, it could possibly be about more than commercialism or social entrepreneurialism. It could also be about civic activism, values guardianship, or professionalism. Salamon would agree that results are important, but he would ask if in going after results, and results only, whether the social sector is in danger of losing its soul. In other words, nonprofits serve many functions beside the provision of services. Little League, a reading group, a public library, a dance

festival, a house of worship, a protest group are not so easily parsed as "getting results." They are more like a seedbed for the participant's humanity. Of course, a seedbed gets results, too, but those results are often unpredictable, not always convertible into dollars and cents, not always measurable within a spreadsheet, and only seen years hence. What is the largest source of capital within the category of private giving (as opposed to government funding and earned revenue)? A)corporations B)foundations C)bequests D)living donors - correct answer ✔✔The correct answer is D. Living donors are by far the largest source of capital, forming 70% of total donors. Bequests are 9%, foundations are 16%, and corporations are 5%. With respect to government funding for the nonprofit sector, which statement(s) below is (are) true? I. Under the Great Society Programs of the Lyndon Johnson era, the government generally would grant money to charities or contract with them to outsource programs the government wanted. II. From Reagan onward, government revenue has increasingly shifted to consumer-side subsidies of services purchased from nonprofits. - correct answer ✔✔The correct answer is C. Both I and II are true. Consumer-side subsidies include vouchers, tax credits, and reimbursements (Medicare/Medicaid). According to Salamon, solidarity is one of the main motives for participating in the nonprofit sector. Which of the statements below best captures what Salamon means? A)We are motivated by nonprofits to give to the nonprofit organizations when they have solid and measurable results. B)Nonprofits are formed when people wish to express themselves through their own philanthropic intent. C)Nonprofits are actors in a social economy.

D)We are social creatures who live in community with others who share certain interests and who form associations and nonprofits to advance those interests. - correct answer ✔✔The correct answer is D. Solidarity means linking arms in community with others. It means celebrating a common identity. It means building community and is sometimes discussed as building social capital. It can also mean neighborliness. Each of these choices is one of the three sectors EXCEPT A. the government sector B. the ecclesiastical sector C. the nonprofit sector D. the business sector - correct answer ✔✔The correct answer is B. The three sectors are the government, business, and nonprofit sectors. The nonprofit sector is sometimes called the social sector, the voluntary sector, or the civic sector. Each of these questions is part of a nonprofit board's responsibilities, EXCEPT A)"How profitable are we?" B)"How well are we doing?" C)"Whom do we serve and how?" D)"What difference are we trying to make as an organization?" - correct answer ✔✔The correct answer is A. All are correct except the suggestion that nonprofit boards consider profitability. They may consider sustainability, perhaps, but not profitability since the organization is a nonprofit. Which of these is (are) part of the board's oversight responsibility? I. Review and approve the budget. II. Hire an independent auditor. - correct answer ✔✔The correct answer is C. Both of these are central to board oversight. BoardSource asked boards to give themselves a report card on their ten basic responsibilities. Which of these recieved the lowest grade? A)legal and ethical oversight B)recruitment of new board members

C)strategy D)fundraising - correct answer ✔✔The correct answer is D. Fundraising scored lowest. Fewer than 20% gave themselves an A or a B. Which of the statements below most accurately describes how CEO compensation should be set? A)Reasonable compensation is set annually by the IRS in Table 76. B)The board determines compensation using the prudent person standard. C)The board should set compensation based on salaries for comparable work at comparable organizations. D)The CEO's salary is a management issue, not a board issue. - correct answer ✔✔The correct answer is C. The IRS dictates that compensation, including benefits, be reasonable, but it does not stipulate what reasonable compensation is for specific roles. Considering comparable jobs and pay at comparable organizations is a good practice. A technology company contracts with a university to do research that will be proprietary to the company. The income from such contracts becomes an ever increasing percentage of the total revenue to the college. Which of these is (are) the IRS implication(s)? I. Revenue from such contracts will likely be taxed as unrelated business income. II. The university's tax exemption may be lost if it has drifted far from its exempt mission. - correct answer ✔✔The correct answer is C. Clearly the income will be taxable as unrelated business taxable income, since doing research that will be proprietary to a tech. company is not part of the school's exempt purpose. In an extreme case, the IRS might even revoke the school's tax exemption if it has drifted so far from its mission that it is behaving more like a vendor to business than a provider of education and knowledge to the public. Charities can also get in trouble with the IRS for mischaracterizing a gift as a fee for services. For example, an overly generous "gift" from a catering company to name a college stadium may disguise what is better seen as concession revenue from a vendor wanting to lock in to sell hot dogs and soda. The enthusiasm with which charities have embraced earned-income strategies is being countered today by increased IRS scrutiny as to whether this is correctly characterized, whether taxes are paid on the unrelated business income, and whether the charity has drifted off mission to become a business in its own right. Which statement is true with regards to board leadership? A)Boards advise rather than govern or manage. B)Boards should oversee the organization's day-to-day operations.

C)Boards should focus on their visions, missions, and strategic plans. D)Boards comanage with the executive director or CEO. - correct answer ✔✔The correct answer is C. The board is the highest level governing body for an organization; its focus is on their vision, mission, and strategic plan. Which role(s) is (are) the board's responsibility for effective planning in a nonprofit? I. Insist that planning take place, participate in a strategic planning process, assess the process itself, formally approve the plan, use plan goals to guide budget and priorities, and track implementation and progress. II. Supervise staff in implementing the plan, evaluate staff performance, and tie staff performance to pay.

• correct answer ✔✔The correct answer is A. The first list is correct; the second list is tactical and would fall at the CEO level or lower. According to BoardSource, which statement is true regarding the governance and management of a nonprofit? A)The board manages, and the CEO governs. B)The CEO manages, and the board governs. C)The CEO and the board jointly manage and govern. D)The board manages and governs - correct answer ✔✔The correct answer is B. Boards govern, CEOs manage, and both should respect the other's role and areas of autonomy. Which of these are shared responsibilities of boards and CEOs? A)implementing the annual fundraising plan B)hiring and supervising staff C)management of day-to-day operations D)governance - correct answer ✔✔The correct answer is A. Generally, boards do not handle tactical assignments, but with fundraising they are expected to get actively involved in implementation. Boards must meet the prudent person standard of care. Which statement best defines the prudent person standard applicable to boards? A)The board can be expected to perform within the limits of what any reasonably intelligent and prudent person would be expected to do or not do. B)The board can be expected to perform at a prudent, expert level.

C)The board can be expected to perform within the limits of its own prudence. D)The board can be expected to make decisions that are prudent in the light of full information. - correct answer ✔✔The correct answer is A. This is the definition of the prudent person standard: a rule that states that people or a group can be expected to perform within the limits of what any reasonably intelligent and prudent person would be expected to do or not do. This means that the standard is not that of an expert, much less an expert who has perfect information. Which person or persons does the board hire? I. the executive director II. the comptroller - correct answer ✔✔The correct answer is A. The board should only hire the executive director. Everyone under the executive director should be hired by the executive director or those he or she has appointed. The board does not get into staffing issues, except for the very top job itself. Which item(s) below is (are) within the scope of a nonprofit board's responsibilities I. Hire and evaluate the executive director. II. Hire and evaluate the head of fundraising. - correct answer ✔✔The correct answer is A. Yes, the board does hire the top person who manages the operation, but that person should then hire the key leaders under him or her. The executive director should hire and evaluate the head of fundraising. The board should not micromanage the hiring decisions. To do that can cause crossed wires with the executive director. With respect to nonprofit boards, which of these statements is (are) true? I. A board's authority is rooted in state and federal law. II. A board's responsibilities are outlined in the organization's bylaws. - correct answer ✔✔The correct answer is C. Both statements are true. These are direct quotations from the slide summarizing a board's authority versus a board's responsibilities. All of these are true with regard to Form 990, EXCEPT A)It is confidential. B)It forces a board review of policies and procedures. C)It makes charities accountable to the public, media, IRS, and state regulatory agencies. D)It forces a review of actual practices. - correct answer ✔✔The correct answer is A. Far from being confidential, the document is public. It is most often posted on the organization's website. All the other statements are true.

Under Sarbanes-Oxley, nonprofits must have which of these policies in place? I. whistle blower protections II. document retention policies - correct answer ✔✔The correct answer is C. Both of these are the two provisions of the act which apply to nonprofits. 40% of professional fundraisers surveyed by Penelope Burk are considering leaving for which of these reasons? A)pay B)benefits C)family reasons D)disagreement with those above them about how to raise money - correct answer ✔✔The correct answer is D. Conflicting opinions as to how to raise money (to do their job) was the greatest source of discontent. This goes back to what Burk has shown about the triumvirate. The board may be responsible for fundraising as one of its ten most important responsibilities, as BoardSource says, but boards do not necessarily truly understand it. In fact, as BoardSource-cited data in earlier assignments has shown, fundraising is one of the functions that boards like least and least understand. Fundraisers at the point of attack, face to face with donors, can sense how poorly the systems that fundraisers operate under are working today. The front line staff know that a more humane, discerning, consultative, personalized approach to top donors is mission aligned, good for everyone's morale and self-respect, and will ultimately garner much larger gifts. The executive director is caught in the middle. In defense of the board, budgets are growing tighter and tighter. The result of this collision between what works best in the long term and what must work right now is donor discontent and fundraiser turnover, which becomes its own vicious cycle (as other studies cited in this assignment indicate). Planned giving does not have a hard definition, but it can be characterized. All of these would be characteristic of planned giving, EXCEPT A) Planned gifts are continent and deferred. B) Planned gifts build an endowment. C) Planned gifts are complex and difficult to accept and administer. D) Planned gifts require significant planning, while other gifts require less planning or none at all. - correct answer ✔✔D) All of the statements point towards what is meant by planned giving. The statement that planned gifts require planning and other gifts do not is false. Clearly a major gift or large gift of cash might require a great deal of planning by tax, legal, and financial advisors. It just may not require a planned giving officer. Typically, planned giving is a silo in a big nonprofit, specialized to address specific deferred, contingent, and complex gifts such as CRTS, CLTs, and gift annuities; gifts of noncash

assets; gifts requiring special attention by the gift acceptance committee; or gifts slated for a restricted endowment. As to cost per dollar raised, which statement(s) below is (are) true? I. A direct mail donor generally yields a dollar for every 20 to 25 cents spent on solicitation after the first year. II. A capital campaign donor generally yields a dollar for every 10 to 20 cents spent on solicitation. - correct answer ✔✔The correct answer is C (Both). According to data cited by BoardSource, both are correct. Capital campaigns are the most efficient at 10 to 20 cents on the dollar, along with volunteer solicitation at the same cost per dollar. Events are not very efficient (50 cents on the dollar). A mature planned giving program is quite efficient at 20 to 30 cents on the dollar but with a provision or two. Planned gifts cost money today and bring in the money later, often 5-7 years after they are solicited, since these gifts are generally deferred. Also, to get to a mature program, the organization needs to have a strong base of aging loyals who have been cultivated and grown over the years. The successful planned giving program is then the fruit of years of work building and solidifying a loyal donor base. According to how the term is used in this course, stewardship describes which of these? I. using given funds in accordance with donor intent II. investing endowments prudently - correct answer ✔✔The correct answer is C. The best answer is both. According to BoardSource, which of these statements about planned gifts is (are) true? I. Planned gifts may be complex and require experts (particularly an attorney). II. Planned gifts require specialized staff. - correct answer ✔✔The correct answer is C. According to how the issue is presented by BoardSource, both of these statements are true. According to a recent survey of members of the National Association of Charitable Gift Planners, what percentage have been in their job 3 years or less? A)10% B)25% C)75% D)50% - correct answer ✔✔The correct answer is D. Half have been in the job for 3 years or less, and this is among members of the association that caters to more sophisticated gift planners.

Which of these is how an accountant would define the term "endowment?" A) money set aside for a future purpose B) an institutional fund not wholly expendable on current purposes under the terms of a gift C) a permanently restricted fund D) the action of spending only income, not principal - correct answer ✔✔C) An accountant sees an endowment as a permanently restricted fund. As surveyed by Penelope Burk, what percentage of boards will invest in a fundraising program if the payback is 1.5 years or less? A)50% B)60% C)65% D)70% - correct answer ✔✔The correct answer is D. Seventy percent of boards will invest in a fundraising program if the payback is 1.5 years or less. The results break down as follows: 31% demand a 12-month payback; 39% will accept an 18-month payback. Only 30% will accept a 24-month payback. This does not bode well for donor-focused gift planning, but it also shows that a significant board-level downward improvement would be possible as a defining difference for organizations that are able to seek longer-term results with at least certain programs oriented to high-capacity donors. In evaluating a fundraising program, a board should do which of these? I. Set quantifiable goals and measure performance against goals. II. Establish benchmarks for cost per dollar raised. - correct answer ✔✔The correct answer is C. Both of these are board responsibilities. All of these are sources of major gifts EXCEPT A)the government B)foundations C)corporations D)individuals - correct answer ✔✔The correct answer is A. The government may provide contracts and reimbursements, but it does not make gifts. Which of the following statements is (are) true?

I. Annual giving and planned giving compete for donor time and attention. II. Annual giving serves as a feeder into major giving. - correct answer ✔✔The correct answer is B. The annual giver is a likely source of planned gifts. The annual gift bonds the donor to the organization. The relationship may then mature to include major gifts and planned gifts. Penelope Burk speaks of the triumvirate, whose decisions govern gift planning in a nonprofit. All of these choices are members of the group, EXCEPT A)the head of advancement B)the executive director C)the comptroller D)the board - correct answer ✔✔The correct answer is C. Burk does not mention the comptroller, though the pressure for money now will filter up to the board from the comptroller through the executive director and the financial statements and projections which the comptroller provides to the board. What is the best definition of the term "quasi-endowment? A) a fund held by the client in a foundation or donor-advised fund from which gifts are made to the charity B) a fund which the client pledges to the charity but which the charity has not yet received C) a stream of annual gifts with a bequest or life insurance policy at death to endow the gift D) an endowment restricted not by donor requirements but by a revocable board resolution - correct answer ✔✔D) A true endowment is restricted permanently. The board cannot revoke it. The quasi- endowment is restricted by a board resolution and can be revoked. The largest source of major gifts is generally which of these? A)the government B)individuals C)corporations D)foundations - correct answer ✔✔The correct answer is B. Individuals are generally the primary source of major gifts. The government does not make gifts per se. How is the term "term endowment" defined?

A) It is restricted under the terms of the gift agreement. B) A segregated account that is termed an endowment. C) It is an endowment set aside for a period of years. D) It is a rainy day fund that is termed an endowment. - correct answer ✔✔C) A term endowment is an endowment set aside for a period of years. As to the terminology of fundraising, which statement(s) below is (are) correct? I. Annual, major, and planned giving functions have traditionally been considered as separate from one another. II. Increasingly, gift planning is the term used to describe the work of fundraisers who can solicit both major and planned gifts, adapting them to the donor's intentions and to the capacities of the nonprofit. - correct answer ✔✔The correct answer is C. Both are true. Major gifts are often just gifts of cash, often solicited face to face from loyal donors. In the past, planned giving was considered to be a separate, more sophisticated specialization, requiring a planned giving officer versed in tax, tools, and techniques. Increasingly, however, fundraisers are expected to be able to do both. The new term for this kind of work is gift planning. (Note how the name of the professional association for gift officers who understand planned gifts has changed over the last 30 years: the National Committee for Planned Giving, then the Partnership for Philanthropic Planning, and now the National Association of Charitable Gift Planners.) Dan Rice puts it humorously, "Are Planned Gift Officers incubating Dodo Birds?" Most who had been called planned gift officers today are more likely to say they are gift planners," meaning they are not just talking about complex charitable tools, but they are also out there just directly asking for the major gift. Each of these is an efficient way of soliciting an annual gift, EXCEPT A)face-to-face visits from board members B)events C)mailings D)internet - correct answer ✔✔The correct answer is A. Generally, board visits are too precious for annual gifts; they are best used in soliciting larger gifts (such as major gifts, planned gifts, or stretch gifts for a campaign). Volunteers living in the donor's community may do face-to-face visits cost effectively. All of these are reasons why it is difficult to successfully fuse major and planned gift job functions EXCEPT A)The processes used in these functions are quite different from each other. B)The prospects for these two functions vary quite a bit.

C)The mindset of people engaged in these two functions (attitudes and degree of technical knowledge) differ. D)Donors prefer a compartmentalized approach to their giving to a particular organization. - correct answer ✔✔The correct answer is D. Planned gifts are oriented to tools. They require an expert mindset and a multi-interview process. Planned gifts are often bequests and split-interest gifts targeted to an older, often much older, donor base (70-90). Planned gifts are often oriented to assets other than cash. Major gifts are generally cash and can be solicited ("the art of the ask") in one interview. Donors, however, might well prefer a more integrated approach in which major and planned gifts were orchestrated over time by a relationship-oriented gift planner who would make sure that the donor's lifetime of giving added up to something meaningful to the donor. What is meant by saying that a donor's gift is restricted? A) The gift consists of restricted stock. B) The gift can be spent subject to board approval. C) The gift and income from it must be held in suspense for a period of 5 years. D) The gift must be held in such a way that it may not be spent except as specified by the donor. - correct answer ✔✔D) When the donor restricts his or her gift, it can only be spent as specified by the donor. Which of these statements is (are) true in regard to soliciting foundation grants? I. Grant writing is a labor-intensive and specialized skill. II. Grant writing is a board responsibility. - correct answer ✔✔The correct answer is A. Grant writing is a specialized skill. Board members should operate at a higher level, with an eye to governance not tasks. According to a recent study of the National Association of Charitable Gift Planners, what percentage of their members engage in planned giving full time? A)8% B)24% C)36% D)47% - correct answer ✔✔The correct answer is A. Only 8% engage in planned giving, and these are among the most sophisticated planners. The point is that gift planning is being redefined with a greater emphasis placed on major gift outright asks, major gifts as part of a campaign, and planned gifts treated as secondary. All of these are ways a board can (and should) participate in fundraising EXCEPT

A)introducing staff to prospective donors B)arranging a table at a benefit C)writing promotional materials D)giving at full capacity - correct answer ✔✔The correct answer is C. All of these actions are listed by BoardSource as appropriate board roles, except writing promotional materials. That is a staff function or an action that can be delegated to outside resources. According to BoardSource, what is the biggest draw for fundraising? A)positive publicity B)the good done in the world C)a charismatic leader D)good promotional materials - correct answer ✔✔The correct answer is B. Programs that make a difference in the world are the biggest and most substantive draw. Based on the comprehensive surveys conducted by Penelope Burk, which statement(s) below is (are) true with respect to donor attrition or churn? I. Attrition today from year one to year two averages 65%. II. From year one to year five, attrition averages 90%. - correct answer ✔✔The correct answer is C. Sadly, both are correct. Attrition is now at 65% from year one to year two. A decade or so ago, Burk says, her surveys showed 50% attrition from year one to two. Donors, it seems, are burning out on direct mail, e- mail, events, and other routine solicitations. As these work less and less well, there may be pressure from the board on down to do it more often in order to make up for the increasing ineffectiveness. That leads to outright donor push-back. Many studies have shown that one of the biggest reasons donors hesitate to give, or give and stop giving, is the risk of being contacted again. "Take me off your list." How many of us are saying that to the charities to which we once gave a small amount or even a large amount? Donors are demanding a more humane and personalized approach, one that respects their good sense, their time, and their hunger for specific results. They prefer to be given choices of funds (designated to a purpose) and to hear from year to year how the fund is being used and what the results are. While all of this is clearly in the data in this assignment, so are the challenges. When over twenty percent of charities do not even have a donor database, it is clear that most cannot currently engage in sophisticated, targeted communications with specific donor groups. The trend noted in this assignment towards increased reliance on sophisticated advisors seems likely to continue until at least the larger charities begin to provide services as personalized and reliable over time, as do the best boutique advisory firms and dedicated advanced planning divisions. Endowments serve all of these purposes, EXCEPT

A) supporting new programs B) reducing the need for fundraising C) expanding charities' reach and capacity D) helping ensure that services are not reduced in an economic downturn - correct answer ✔✔B) Endowment may be given as an excuse by donors for not giving money, but organizations, even Harvard, with very large endowments must continue their fundraising activities. What is meant by a spending policy for endowments? A) rules for determining the permitted ratio of investment expenses to assets under management B) rules for how the endowment account can be spent on fundraising costs C) rules for computing how much of the fund's income or growth can be spent for current uses D) rules for how much can be spent on managing endowment assets - correct answer ✔✔C) The endowment exists to fund current programs in perpetuity; this leads to the question of how much can be spent in a given year. The spending policy addresses this. What are the three levels of the pyramid of giving, listed from the bottom to the top? A)annual, major, and planned B)planned, major, and annual C)major, annual, and planned D)current, deferred, and ultimate - correct answer ✔✔The correct answer is A. Annual, Major, and Planned: This is how ongoing fundraising has traditionally been subdivided. The entry level is annual, then major, and then planned. According to BoardSource, what is an acceptable cost per dollar raised for an annual fundraising program that is intended to renew givers by the third year? A)45-55 cents per dollar raised B)20-25 cents per dollar raised C)70-85 cents per dollar raised D)50 cents per dollar raised - correct answer ✔✔The correct answer is B. Direct mail may cost considerably more in the first few years to establish a donor base, but, within a few years, the cost of getting a gift to renew should be down to 20-25 cents per dollar raised.

Overall, tenure for major gift officers is around what number of years? A)2 B)3.5 C)5 D)6.5 - correct answer ✔✔The correct answer is B. Tenure is around 3.5 years. Given that it takes awhile, about 6 months to a year, to become productive in a new job and given that finding the next job takes time, fundraiser turnover is a significant drag on productivity. Needless to say, short tenure makes long- term relationships with donors difficult. Short fundraiser tenure, along with other forces inside nonprofits (such as pressure from the board on down to get immediate results) make it difficult to maintain donor-centered, personalized, fundraising systems for highest-capacity donors. How is the term "true endowment" defined? A) Money restricted by board resolution B) An endowment in which many people chip into a specific fund C) money set aside for a term of years D) money permanently set aside - correct answer ✔✔D) A true endowment is money permanently set aside with only the income or growth used for particular purposes. Often these purposes are restricted. A restricted endowment fund is often given by a single donor. Endowments may begin in which way(s)? I. an endowment building campaign II. a donor-restricted legacy gift that comes in by surprise - correct answer ✔✔The correct answer is C. Both I and II are possible. Of course the charity can put together a campaign to build an endowment, often by asking that donors mention them in their will. The charity then puts in the incoming bequests into an endowment. But a charity may also find itself having to start an endowment when they receive an unexpected first legacy gift. When the donor specifies that the gift should fund a program in perpetuity, the charity finds itself having to set up an endowment to support the program. Each of these is a way endowments are traditionally established, EXCEPT A) A charity may ask a donor to hold the endowment. B) A charity may establish a supporting organization to hold its endowment. C) A charity may set up a designated fund at a community foundation.

D) A charity may set up a segregated account of its own. - correct answer ✔✔A) Charities generally do not think of the donor as holding an endowment for them. The other formats are permissible. A donor might hold principal and give the income or grants to the charity, but this would not necessarily be considered an endowment. Still, an advisor might see possibilities in creating an outsourced endowment held in a charitable tool (like a foundation, donor-advised fund, or charitable lead trust). The charity would be a beneficiary but only to the extent that they met donor expectations from year to year. Perhaps instead of a gift agreement there might be a pledge or some other meeting of the minds. But since the donor holds the money rather than giving it outright, the charity remains accountable. The balance of power shifts to the donor in enforcing compliance with donor desires. The classic elements of planned gifts include each of the following choices, EXCEPT A) outright gifts of noncash assets B) bequests and beneficiary designations C) life income gifts D) large current gifts of cash - correct answer ✔✔D) Large gifts of cash are generally not considered planned gifts. The language surrounding planned giving is a little hazy. Yes, large gifts of any kind, particularly if large in relationship to the donor's asset base, do require the donor to plan. Yes, the cash given may have come from moves made by the donor to liquidate noncash assets. But the world of planned giving has traditionally been institution-centric. What is planned by the organization is the acceptance of the gift and the structuring of the gift proposal by the institution. Cash requires no special planning for the institution to accept and requires no specialized tax or legal expertise on the part of the charity. Advisors, on the other hand, would consider a very large gift of cash to be an occasion for significant financial and estate planning. The difference in language between advisors and fundraisers with regard to the planning of giving slows mutual comprehension. Increasingly advisors and fundraisers are speaking of gift planning. That terminology would make it easier to see that large gifts of cash do require planning from within the donor's financial world and also with a goal of impact on the charity. Which statement(s) below is (are) true of planned gifts? I. Planned gifts are often contingent gifts. II. Planned gifts are often deferred gifts. - correct answer ✔✔The correct answer is C. Both these statements are true of what are termed "planned gifts" in the jargon of this field. A planned gift is generally a bequest, a split-interest gift, a life insurance policy, or qualified plan designation. Bequests are often contingent because the will, or the arrangement, is subject to change. They are deferred. Life insurance and annuity beneficiary designations are contingent, and the money comes in later (deferred). Even a life policy owned by the charity is subject to the contingency that it might lapse if the donor ceases donating the premium amount. A CRT's charitable beneficiary designation is often contingent. If the document comes from the client's attorney, he or she will suggest that the beneficiary be left subject to change. With a CRT, the charity gets the money later. With a gift annuity, it may irrevocably go to the charity that wrote it, but the money does come in later. The point overall is that planned gift money is

generally deferred and often contingent. This, in today's world of organizations needing money now, makes it hard to sell boards on keeping or growing a planned giving program. Deferred and contingent seems less attractive to cash-strapped organizations than "now money" or irrevocable pledges. With respect to planned gifts, all of these statements are true, EXCEPT A)They are often made towards the final third of life, either as bequests, or as a split interest gift from which the donor gets an income back. B)They are often the ultimate gift made by the donor. C)Planned gifts can be made as part of a blended gift with credit given to the donor and the fundraiser towards campaign goals. D)Planned gifts are those planned by the client's own advisory team. - correct answer ✔✔The correct answer is D. A donor may choose to involve his or her advisors in planning a gift, but the term "planned giving" refers to a specific kind of gift solicited by the nonprofit. A planned gift is a bequest or charitable tool benefiting the charity. These can be solicited by planned gift officers who specialize in such tool- driven gifts, or they can be made by a major gift officer who has a conversational understanding of the tool and brings in the planned gift officer to help explain and close the gift. Increasingly, planned gifts are being rolled into a capital campaign, by way of a blended gift. The donor to the campaign is asked for a major gift towards the campaign, but is also asked to add a planned gift. The two are counted, within the campaign rules, for recognition for the donor and credit for the fundraiser towards the fundraiser's own quota. With respect to planned gifts all of these are true, EXCEPT A)They usually involve a charitable tool or bequest. B)They are often deferred. C)They are often contingent. D)They are generally established with $1 million or more. - correct answer ✔✔The correct answer is D. Many planned gifts can be quite small. It is principal gifts that are sometimes defined as being over a million dollars, or otherwise very large in the eyes of the charity. Planned gifts do tend to be deferred (with the money coming in later to the charity even if the arrangement is set up now), and they are often contingent. The giver can, say, change his or her will, the beneficiary of the life policy, the beneficiary of the IRA, and even the beneficiary of a CRT if the document allows it. All of this matters because it points to the changing attitudes among top management as to the relative importance of the planned gift as opposed to the outright major gift. It is hard to blame top management for wanting cash money right now, as opposed to booking gifts that may or may not materialize. A gift officer trained in blended gifts could execute what process(es) below?

I. Ask a donor for an outright gift. II. Open a discussion of a planned gift in service of a campaign. - correct answer ✔✔The correct answer is C. Both are true. A gift officer should be able to make an ask for a major gift. But a gift officer who solicits blended gifts should also be able to "blend in" a planned gift, say, a bequest, to increase the total gift. Generally, this is done in service of a campaign. For example, a donor gifts $10,000 outright and sets up a bequest of $90,000. Campaign rules at a particular charity may allow this to be counted as $100,000 towards the campaign goal. In gift planning, what is meant by the term "linkages"? A)links between a donor and a fundraiser, such as shared hobbies B)links between the past and present in a donor's life C)links connecting the donor and the organization D)links among the donor, the advisor, and the fundraiser - correct answer ✔✔The correct answer is C. The more ties the donor has to the organization, the more likely he or she will make a gift to that organization. Hence, fundraisers look for linkages and opportunities to create more linkages. What is the primary source of prospects for a planned gift officer at a large, stable nonprofit, such as a hospital, college, or large social service organization? A)donors the fundraiser has known and cultivated from work at other nonprofits B)referrals from existing donors C)centers of influence that the fundraiser cultivates for consistent donor referrals D)the loyals found in the organization's database - correct answer ✔✔The correct answer is D. This is a point of differentiation between many financial advisors and gift planners. A financial advisor will very often cite prospecting as the number one focus of his or her activity. Referrals, centers of influence, and personal observation all are used to find appropriate new clients. But with nonprofit gift planners, the prospects are generally found in the pipeline of donors who have been giving to the organization for many years (an exception to this rule may be community foundations whose prospects often come from advisor referrals). For a fundraiser to draw on leads from prior charities at which he or she has worked is an ethical violation. The donor "belongs" to the charity, not the fundraiser. With respect to planned gifts, which statement(s) below is (are) true? I. They are often restricted by the donor. II. They often go into an endowment. - correct answer ✔✔The correct answer is C. Planned gifts (particularly bequests, which comprise the bulk of planned gifts) very often go into a donor-restricted