Strayer University BUS 409 Final Exam (pdf) | 2026/2027 |
Compensation Mgmt Q&A | Business
1. Which of the following best defines a nonprofit organization?
A) An organization that operates solely to generate profit for shareholders
B) A tax-exempt organization that serves a public or mutual benefit and
reinvests surplus revenue into its mission
C) A government agency that provides services to citizens
D) A business that sells products to consumers
Correct Answer: A tax-exempt organization that serves a public or mutual
benefit and reinvests surplus revenue into its mission
Rationale: Nonprofit organizations are tax-exempt entities that serve a public
or mutual benefit. Unlike for-profit businesses, they reinvest any surplus
revenue back into their mission rather than distributing profits to owners or
shareholders. This fundamental distinction shapes their governance,
operations, and financial management .
2. The role of a nonprofit board of directors includes all of the following
EXCEPT:
A) Ensuring the organization fulfills its mission
B) Overseeing financial management and accountability
C) Directing day-to-day operations of the organization
D) Hiring and evaluating the CEO
Correct Answer: Directing day-to-day operations of the organization
Rationale: The board of directors is responsible for governance, not daily
operations. Boards ensure mission fulfillment, oversee financial
management, hire and evaluate the CEO, and set strategic direction. The
,CEO and staff manage day-to-day operations. This distinction between
governance and management is fundamental to nonprofit structure .
3. A self-perpetuating board is one in which new members are selected by:
A) The organization's membership
B) The CEO
C) The existing members of the board
D) A government agency
Correct Answer: The existing members of the board
Rationale: In a self-perpetuating board, the existing board members select
new members. This is common in charitable nonprofits, unlike elected boards
common in public organizations or member-serving organizations where
members elect the board .
4. The concept that value should be thought about as having three
components—economic value, social value, and environmental value—is
known as:
A) The Triple Bottom Line
B) Blended Value
C) The Balanced Scorecard
D) Social Return on Investment
Correct Answer: Blended Value
Rationale: Blended value theory, associated with blended value theorists,
posits that value has three components: economic value, social value, and
environmental value. The Triple Bottom Line measures performance across
,economic, social, and environmental dimensions, which is related but distinct
.
5. A formal, written document that states the mutual understandings of the
donor and the organization is called a:
A) Memorandum of understanding
B) Gift agreement
C) Donor contract
D) Grant proposal
Correct Answer: Gift agreement
Rationale: A gift agreement is a formal, written document that states the
mutual understandings between a donor and the organization, typically
outlining the purpose of the gift, restrictions, and expectations for both
parties. It formalizes the donor-organization relationship .
6. Which of the following is NOT a nonprofit-corporate relationship?
A) Cause marketing
B) Corporate sponsorship
C) Lobbying
D) Corporate foundations
Correct Answer: Lobbying
Rationale: Lobbying is a political activity, not a type of nonprofit-corporate
relationship. Nonprofit-corporate relationships include cause marketing
(where a company promotes a cause), corporate sponsorships, and corporate
foundations that provide grants. Lobbying involves advocating for specific
legislation and is a separate activity .
, 7. The activity undertaken with the goal of eliciting charitable or
philanthropic giving is called:
A) Marketing
B) Fundraising
C) Advocacy
D) Lobbying
Correct Answer: Fundraising
Rationale: Fundraising is the activity of soliciting charitable or philanthropic
gifts. It is distinct from marketing (promoting the organization), advocacy
(supporting a cause), and lobbying (influencing legislation). Fundraising
includes activities like prospect research, direct mail, major gift solicitation,
and planned giving .
8. Prospect research in fundraising involves:
A) Conducting market research on products
B) Identifying individuals, foundations, and corporations who are potential
donors
C) Developing new programs for the organization
D) Evaluating staff performance
Correct Answer: Identifying individuals, foundations, and corporations who
are potential donors
Rationale: Prospect research is the process of identifying potential donors—
individuals, foundations, and corporations—who may be interested in
supporting the organization and have the capacity to give. It is a key function
Compensation Mgmt Q&A | Business
1. Which of the following best defines a nonprofit organization?
A) An organization that operates solely to generate profit for shareholders
B) A tax-exempt organization that serves a public or mutual benefit and
reinvests surplus revenue into its mission
C) A government agency that provides services to citizens
D) A business that sells products to consumers
Correct Answer: A tax-exempt organization that serves a public or mutual
benefit and reinvests surplus revenue into its mission
Rationale: Nonprofit organizations are tax-exempt entities that serve a public
or mutual benefit. Unlike for-profit businesses, they reinvest any surplus
revenue back into their mission rather than distributing profits to owners or
shareholders. This fundamental distinction shapes their governance,
operations, and financial management .
2. The role of a nonprofit board of directors includes all of the following
EXCEPT:
A) Ensuring the organization fulfills its mission
B) Overseeing financial management and accountability
C) Directing day-to-day operations of the organization
D) Hiring and evaluating the CEO
Correct Answer: Directing day-to-day operations of the organization
Rationale: The board of directors is responsible for governance, not daily
operations. Boards ensure mission fulfillment, oversee financial
management, hire and evaluate the CEO, and set strategic direction. The
,CEO and staff manage day-to-day operations. This distinction between
governance and management is fundamental to nonprofit structure .
3. A self-perpetuating board is one in which new members are selected by:
A) The organization's membership
B) The CEO
C) The existing members of the board
D) A government agency
Correct Answer: The existing members of the board
Rationale: In a self-perpetuating board, the existing board members select
new members. This is common in charitable nonprofits, unlike elected boards
common in public organizations or member-serving organizations where
members elect the board .
4. The concept that value should be thought about as having three
components—economic value, social value, and environmental value—is
known as:
A) The Triple Bottom Line
B) Blended Value
C) The Balanced Scorecard
D) Social Return on Investment
Correct Answer: Blended Value
Rationale: Blended value theory, associated with blended value theorists,
posits that value has three components: economic value, social value, and
environmental value. The Triple Bottom Line measures performance across
,economic, social, and environmental dimensions, which is related but distinct
.
5. A formal, written document that states the mutual understandings of the
donor and the organization is called a:
A) Memorandum of understanding
B) Gift agreement
C) Donor contract
D) Grant proposal
Correct Answer: Gift agreement
Rationale: A gift agreement is a formal, written document that states the
mutual understandings between a donor and the organization, typically
outlining the purpose of the gift, restrictions, and expectations for both
parties. It formalizes the donor-organization relationship .
6. Which of the following is NOT a nonprofit-corporate relationship?
A) Cause marketing
B) Corporate sponsorship
C) Lobbying
D) Corporate foundations
Correct Answer: Lobbying
Rationale: Lobbying is a political activity, not a type of nonprofit-corporate
relationship. Nonprofit-corporate relationships include cause marketing
(where a company promotes a cause), corporate sponsorships, and corporate
foundations that provide grants. Lobbying involves advocating for specific
legislation and is a separate activity .
, 7. The activity undertaken with the goal of eliciting charitable or
philanthropic giving is called:
A) Marketing
B) Fundraising
C) Advocacy
D) Lobbying
Correct Answer: Fundraising
Rationale: Fundraising is the activity of soliciting charitable or philanthropic
gifts. It is distinct from marketing (promoting the organization), advocacy
(supporting a cause), and lobbying (influencing legislation). Fundraising
includes activities like prospect research, direct mail, major gift solicitation,
and planned giving .
8. Prospect research in fundraising involves:
A) Conducting market research on products
B) Identifying individuals, foundations, and corporations who are potential
donors
C) Developing new programs for the organization
D) Evaluating staff performance
Correct Answer: Identifying individuals, foundations, and corporations who
are potential donors
Rationale: Prospect research is the process of identifying potential donors—
individuals, foundations, and corporations—who may be interested in
supporting the organization and have the capacity to give. It is a key function
