CFRE - Exam test preparation Questions and Must
have solutions Updated version 2025/2026
What is Cause Marketing, and how does it differ from Sponsorships? -
correct answer Cause Marketing: "company's providing $$ to a nonprofit
in direct proportion to the quantity of service/product purchased by
consumers during a particular period of time." (If longer, then becomes
cause branding).
Sponsorship: not directly tied to customers buying things but gives
company access to nonprofit's activity/event/cause. A strategic investment.
What are first-order and second-order benefits in corporate philanthrophy?
- correct answer Gourville and Rangan (2004) split into first-order and
second-order benefits. First-order for non-profit: $$, volunteers, in-kind.
First-order for company: sales. Second-order benefits are ones that will
result for either side in future. (think sponsorship & cause marketing)
Second-order benefits sought by companies include:
* category exclusivity
* credit on related materials
* program naming
* tickets and hospitality for events
* access to nonprofit database
First and Second-order benefits for nonprofits:
* More $$
* New volunteers
* Public awareness
, * Company connections/network
* Diversified income streams
* Access to new audiences
* More knowledge on marketing/other corporate
Downsides:
Nonprofit:
* Will collaboration affect donor activity? Decrease public trust in nonprofit?
Will potential donors think they've done enough by buying the cause-
marketed branded swag? Reduce $$ from other companies? Waste
resources if alliance fails?
Cause marketing & sponsorship do not build donor loyalty over time. Ties
to special event versus organization. Takes away fundraiser time from
other activities.
Company:
*nonprofit doesn't interest every customer *more complicated accounting
*may not provide payoff of time and resources *may be viewed as
exploitation *
What are the four types of foundations? - correct answer * Independent -
provide support to tax-exempt orgs through grants. Must distribute at least
5% of their endowment annually.
* Corporate - receives assets from for-profit business. Interests mirror the
company's often.
* Community - receive gifts and make grants. Fund a wide range of needs.
Typically geographically focused. Exempt from the 5% minimum
have solutions Updated version 2025/2026
What is Cause Marketing, and how does it differ from Sponsorships? -
correct answer Cause Marketing: "company's providing $$ to a nonprofit
in direct proportion to the quantity of service/product purchased by
consumers during a particular period of time." (If longer, then becomes
cause branding).
Sponsorship: not directly tied to customers buying things but gives
company access to nonprofit's activity/event/cause. A strategic investment.
What are first-order and second-order benefits in corporate philanthrophy?
- correct answer Gourville and Rangan (2004) split into first-order and
second-order benefits. First-order for non-profit: $$, volunteers, in-kind.
First-order for company: sales. Second-order benefits are ones that will
result for either side in future. (think sponsorship & cause marketing)
Second-order benefits sought by companies include:
* category exclusivity
* credit on related materials
* program naming
* tickets and hospitality for events
* access to nonprofit database
First and Second-order benefits for nonprofits:
* More $$
* New volunteers
* Public awareness
, * Company connections/network
* Diversified income streams
* Access to new audiences
* More knowledge on marketing/other corporate
Downsides:
Nonprofit:
* Will collaboration affect donor activity? Decrease public trust in nonprofit?
Will potential donors think they've done enough by buying the cause-
marketed branded swag? Reduce $$ from other companies? Waste
resources if alliance fails?
Cause marketing & sponsorship do not build donor loyalty over time. Ties
to special event versus organization. Takes away fundraiser time from
other activities.
Company:
*nonprofit doesn't interest every customer *more complicated accounting
*may not provide payoff of time and resources *may be viewed as
exploitation *
What are the four types of foundations? - correct answer * Independent -
provide support to tax-exempt orgs through grants. Must distribute at least
5% of their endowment annually.
* Corporate - receives assets from for-profit business. Interests mirror the
company's often.
* Community - receive gifts and make grants. Fund a wide range of needs.
Typically geographically focused. Exempt from the 5% minimum
