CFRE Exam 100% Correct Solutions
The most effective marketing vehicles for planned giving are considered to be:
a. Personal visits with the donor, direct mail, blogging, and email.
b. Direct mail, newsletters, wills clinics, estate planning seminars, and by educating
other professionals.
c. Initial visit with donor, followed by letter reiterating planned giving options followed by
email or telephone communication.
d. All of the above. - ANS-b. Direct mail, newsletters, wills clinics, estate planning
seminars, and by educating other professionals.
Financial statements are useful because:
a. In the for-profit arena, they help investors and creditors make better economic
decisions while in nonprofit organizations, the cash flow analysis is an indicator of the
financial health of the organization
b. In the nonprofit arena, they help board members make better economic and strategic
decisions, while in the for-profit arena, the cash flow analysis is a better indicator of the
financial health of the organization
c. They illustrate economic health as GAAP ensures that financial statements are
accurate and timely
d. They ensure that outside auditors are monitoring financial health of the organization -
ANS-a. In the for-profit arena, they help investors and creditors make better economic
decisions while in nonprofit organizations, the cash flow analysis is an indicator of the
financial health of the organization
Sylvia Gotrocks has been identified as a new prospect for your organization. Your
researcher has determined that she has an annual disposable income of $200,000 and
a family farm currently on the market for $2 million. You should approach Sylvia for:
a. An annual gift
b. A major gift in support of your capital campaign, part of which support a Center on
Renewable Energy and the use of corn hybrids
,c. A gift of real estate
d. An outright bequest to your organization in Sylvia's will - ANS-a. An annual gift
What is the best indicator that your solicitation strategies are meeting the ethical
standards established by AFP:
a. You provide all donors with appropriate gift receipts for tax preparation
b. You send an appropriate peer solicitor on calls to make the prospect feel more
comfortable
c. You make certain that support of your organization's mission is more important than
any other gain
d. You develop relationships over time with prospects and donors, allowing them to feel
comfortable with the organization and the process - ANS-d. You develop relationships
over time with prospects and donors, allowing them to feel comfortable with the
organization and the process
In your old job with a highly regarded, financially stable organization, you developed a
close working relationship with an elderly couple who set up a revocable trust with the
organization. You then move to a new organization whose financial situation is
somewhat shaky. Several months later the couple comes to you and says that because
they have such confidence in your ability to look after their interests, they want to revoke
the original trust and set up a new one through you and your new organization.
a. Suppose the couple proposed to make a major gift to your new organization without
revoking the old trust. What should you do?
b. Accept the offer on behalf of your organization
c. Reject the offer
d. Ask the CEO of your organization to make the decision
e. Ask the couple to work with someone else in your new organization. - ANS-e. Ask the
couple to work with someone else in your new organization.
The mission of FASB is to:
a.Monitor the financial and accounting industry for the benefit of the public including:
issuers, auditors and users of financial information- including charities
b. Provide resources, information and leadership relative to financial accounting and
reporting- particularly as it relates to the preparation of financial statements
, c. Establish and improve standards of financial accounting and reporting for the
guidance and education of the public including: issuers, auditors and users of financial
information-including charities
d. B&C - ANS-c. Establish and improve standards of financial accounting and reporting
for the guidance and education of the public including: issuers, auditors and users of
financial information-including charities
Which aspect of an organization's history is MOST effectively used in appealing to
donors?
a. The external factors that impacted the organization
b. The identity of the organization's chief executive officers
c. The historical aspects associated with an evolution of various departments or new
services
d. The role of major donors in developing the current strengths of the organization -
ANS-d. The role of major donors in developing the current strengths of the organization
A major donor has shared with you that she has a history of domestic violence. You are
leaving your current position to take one as the development officer for a shelter. What
can you do with this information?
a. Record it in her file so the next development officer can have a more intimate portrait
of the donor
b. Make note of the information and take it with you so you can solicit this donor for your
new organization
c. Confide your dilemma with a fellow development officer and seek his/her advice
d. Do nothing - ANS-d. Do nothing
The IRS requires most tax-exempt organizations to submit an annual information report,
the Form 990 and its relations, which includes a significant amount of financial
reporting. The report requires:
a. An object revenue and income statement and balance sheet (with particular
categories specified), and statement of functional expenses in which all expenses are
allocated to either programs services, fundraising or operations
The most effective marketing vehicles for planned giving are considered to be:
a. Personal visits with the donor, direct mail, blogging, and email.
b. Direct mail, newsletters, wills clinics, estate planning seminars, and by educating
other professionals.
c. Initial visit with donor, followed by letter reiterating planned giving options followed by
email or telephone communication.
d. All of the above. - ANS-b. Direct mail, newsletters, wills clinics, estate planning
seminars, and by educating other professionals.
Financial statements are useful because:
a. In the for-profit arena, they help investors and creditors make better economic
decisions while in nonprofit organizations, the cash flow analysis is an indicator of the
financial health of the organization
b. In the nonprofit arena, they help board members make better economic and strategic
decisions, while in the for-profit arena, the cash flow analysis is a better indicator of the
financial health of the organization
c. They illustrate economic health as GAAP ensures that financial statements are
accurate and timely
d. They ensure that outside auditors are monitoring financial health of the organization -
ANS-a. In the for-profit arena, they help investors and creditors make better economic
decisions while in nonprofit organizations, the cash flow analysis is an indicator of the
financial health of the organization
Sylvia Gotrocks has been identified as a new prospect for your organization. Your
researcher has determined that she has an annual disposable income of $200,000 and
a family farm currently on the market for $2 million. You should approach Sylvia for:
a. An annual gift
b. A major gift in support of your capital campaign, part of which support a Center on
Renewable Energy and the use of corn hybrids
,c. A gift of real estate
d. An outright bequest to your organization in Sylvia's will - ANS-a. An annual gift
What is the best indicator that your solicitation strategies are meeting the ethical
standards established by AFP:
a. You provide all donors with appropriate gift receipts for tax preparation
b. You send an appropriate peer solicitor on calls to make the prospect feel more
comfortable
c. You make certain that support of your organization's mission is more important than
any other gain
d. You develop relationships over time with prospects and donors, allowing them to feel
comfortable with the organization and the process - ANS-d. You develop relationships
over time with prospects and donors, allowing them to feel comfortable with the
organization and the process
In your old job with a highly regarded, financially stable organization, you developed a
close working relationship with an elderly couple who set up a revocable trust with the
organization. You then move to a new organization whose financial situation is
somewhat shaky. Several months later the couple comes to you and says that because
they have such confidence in your ability to look after their interests, they want to revoke
the original trust and set up a new one through you and your new organization.
a. Suppose the couple proposed to make a major gift to your new organization without
revoking the old trust. What should you do?
b. Accept the offer on behalf of your organization
c. Reject the offer
d. Ask the CEO of your organization to make the decision
e. Ask the couple to work with someone else in your new organization. - ANS-e. Ask the
couple to work with someone else in your new organization.
The mission of FASB is to:
a.Monitor the financial and accounting industry for the benefit of the public including:
issuers, auditors and users of financial information- including charities
b. Provide resources, information and leadership relative to financial accounting and
reporting- particularly as it relates to the preparation of financial statements
, c. Establish and improve standards of financial accounting and reporting for the
guidance and education of the public including: issuers, auditors and users of financial
information-including charities
d. B&C - ANS-c. Establish and improve standards of financial accounting and reporting
for the guidance and education of the public including: issuers, auditors and users of
financial information-including charities
Which aspect of an organization's history is MOST effectively used in appealing to
donors?
a. The external factors that impacted the organization
b. The identity of the organization's chief executive officers
c. The historical aspects associated with an evolution of various departments or new
services
d. The role of major donors in developing the current strengths of the organization -
ANS-d. The role of major donors in developing the current strengths of the organization
A major donor has shared with you that she has a history of domestic violence. You are
leaving your current position to take one as the development officer for a shelter. What
can you do with this information?
a. Record it in her file so the next development officer can have a more intimate portrait
of the donor
b. Make note of the information and take it with you so you can solicit this donor for your
new organization
c. Confide your dilemma with a fellow development officer and seek his/her advice
d. Do nothing - ANS-d. Do nothing
The IRS requires most tax-exempt organizations to submit an annual information report,
the Form 990 and its relations, which includes a significant amount of financial
reporting. The report requires:
a. An object revenue and income statement and balance sheet (with particular
categories specified), and statement of functional expenses in which all expenses are
allocated to either programs services, fundraising or operations
