South Carolina Nonprofit Administrator
Certification License Exam Practice
Questions And Correct Answers
(Verified Answers) Plus Rationale 2026
Q&A| Instant Download Pdf
1. The primary legal document that establishes a nonprofit corporation
and outlines its purpose and governance structure is the:
A. Annual Report
B. Conflict of Interest Policy
C. Articles of Incorporation
D. Bylaws
Rationale: The Articles of Incorporation are the foundational legal
document filed with the state to create the nonprofit and define its
purpose and governance._
2. A 501(c)(3) organization is exempt from federal income tax because it
operates for:
A. Political advocacy
B. Charitable purposes
C. Private benefit
D. Commercial enterprise
Rationale: 501(c)(3) status is reserved for organizations operating for
religious, educational, or charitable purposes and not for private
benefit or political activism._
,3. Which of the following is a duty of care for nonprofit board members?
A. Serving lifetime terms
B. Approving unrelated business activities
C. Acting in good faith and making informed decisions
D. Delegating all responsibilities to staff
Rationale: Duty of care requires board members to act responsibly,
with adequate information, and in good faith for the organization’s
benefit._
4. In South Carolina, the annual registration that most charities must file
to solicit contributions is with the:
A. IRS
B. South Carolina Secretary of State
C. South Carolina Solicitation Licensing Division
D. Federal Trade Commission
Rationale: Charities soliciting contributions in South Carolina must
register with the state’s Solicitation Licensing Division annually._
5. A financial statement that shows an organization’s financial position at
a specific point in time is the:
A. Budget
B. Statement of Financial Position
C. Statement of Activities
D. Cash Flow Forecast
Rationale: The Statement of Financial Position (balance sheet)
reports assets, liabilities, and net assets at a given date._
6. An unrestricted contribution is best described as a gift that the donor:
A. Limits to a specific program
B. Requires to be returned after one year
C. Allows the organization to use as needed
D. Restricts to capital expenditures
, Rationale: Unrestricted contributions have no donor-imposed
limitations, giving the nonprofit flexibility in use._
7. Fundraising practices must adhere to ethical standards established by:
A. Internal Revenue Service only
B. Federal Election Commission
C. State bar associations
D. Association of Fundraising Professionals (AFP) Code of Ethical
Standards
Rationale: The AFP provides widely accepted ethical guidelines for
nonprofit fundraising practices._
8. The form that a tax-exempt organization must file annually with the IRS
is the:
A. Form 990-T
B. Form 990
C. Schedule A
D. W-9
Rationale: Most tax-exempt nonprofits file Form 990 annually to
report finances and activities to the IRS._
9. A strategic plan primarily serves to:
A. Comply with tax law
B. Guide long-term organizational goals
C. Justify executive compensation
D. Replace the budget
Rationale: Strategic planning sets priorities and direction for growth
and impact over multiple years._
10. A conflict of interest policy is important because it:
A. Eliminates all disagreements
B. Ensures decisions are made in the organization’s best interest
C. Prevents board members from serving on committees
Certification License Exam Practice
Questions And Correct Answers
(Verified Answers) Plus Rationale 2026
Q&A| Instant Download Pdf
1. The primary legal document that establishes a nonprofit corporation
and outlines its purpose and governance structure is the:
A. Annual Report
B. Conflict of Interest Policy
C. Articles of Incorporation
D. Bylaws
Rationale: The Articles of Incorporation are the foundational legal
document filed with the state to create the nonprofit and define its
purpose and governance._
2. A 501(c)(3) organization is exempt from federal income tax because it
operates for:
A. Political advocacy
B. Charitable purposes
C. Private benefit
D. Commercial enterprise
Rationale: 501(c)(3) status is reserved for organizations operating for
religious, educational, or charitable purposes and not for private
benefit or political activism._
,3. Which of the following is a duty of care for nonprofit board members?
A. Serving lifetime terms
B. Approving unrelated business activities
C. Acting in good faith and making informed decisions
D. Delegating all responsibilities to staff
Rationale: Duty of care requires board members to act responsibly,
with adequate information, and in good faith for the organization’s
benefit._
4. In South Carolina, the annual registration that most charities must file
to solicit contributions is with the:
A. IRS
B. South Carolina Secretary of State
C. South Carolina Solicitation Licensing Division
D. Federal Trade Commission
Rationale: Charities soliciting contributions in South Carolina must
register with the state’s Solicitation Licensing Division annually._
5. A financial statement that shows an organization’s financial position at
a specific point in time is the:
A. Budget
B. Statement of Financial Position
C. Statement of Activities
D. Cash Flow Forecast
Rationale: The Statement of Financial Position (balance sheet)
reports assets, liabilities, and net assets at a given date._
6. An unrestricted contribution is best described as a gift that the donor:
A. Limits to a specific program
B. Requires to be returned after one year
C. Allows the organization to use as needed
D. Restricts to capital expenditures
, Rationale: Unrestricted contributions have no donor-imposed
limitations, giving the nonprofit flexibility in use._
7. Fundraising practices must adhere to ethical standards established by:
A. Internal Revenue Service only
B. Federal Election Commission
C. State bar associations
D. Association of Fundraising Professionals (AFP) Code of Ethical
Standards
Rationale: The AFP provides widely accepted ethical guidelines for
nonprofit fundraising practices._
8. The form that a tax-exempt organization must file annually with the IRS
is the:
A. Form 990-T
B. Form 990
C. Schedule A
D. W-9
Rationale: Most tax-exempt nonprofits file Form 990 annually to
report finances and activities to the IRS._
9. A strategic plan primarily serves to:
A. Comply with tax law
B. Guide long-term organizational goals
C. Justify executive compensation
D. Replace the budget
Rationale: Strategic planning sets priorities and direction for growth
and impact over multiple years._
10. A conflict of interest policy is important because it:
A. Eliminates all disagreements
B. Ensures decisions are made in the organization’s best interest
C. Prevents board members from serving on committees
