CFRE Practice Exam with complete solutions

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If a donor states that the amount of money an organization is asking for is very large, the best response is to tell the prospective donor that: - ANSWER the amount is large, but emphasize the value a... nd long-term impact of the gift. When is the most appropriate time to begin devoting time and energy into the development and nurturing of a relationship with a donor? - ANSWER Immediately upon receipt of the donor's first gift, irrespective of the gift size The primary purpose of rating an organization's prospective donors is to determine their: - ANSWER potential to give to the organization. When budgeting the costs for a new fundraising software package, in addition to the initial purchase and upgrades, a fundraiser also should factor in: - ANSWER the cost for maintenance and warranties. The primary challenge in maintaining an effective relationship between a donor and a fundraiser is: - ANSWER maintaining professional balance in the relationship. Based on based giving records, a fundraiser is visiting a prospective major gift donor for the first time. Because the prospective donor has never been visited by the organization, the most appropriate strategy is to: - ANSWER learn about the prospective donor's interests and link to the organization. The most essential factor in sending gift acknowledgement letters is: - ANSWER speed of delivery. The first prospects to be asked to support any campaign are the: - ANSWER board members In marketing, what does SWOT analysis stands for? - ANSWER strength, weakness, opportunities, threats In order to be effective, it is essential that the vision and mission be continually expressed by the organization's: - ANSWER leadership When interviewing prospective fundraising employees, it is most important to avoid: - ANSWER questions that may be construed as personal. When developing a specific solicitation plan for an individual donor, the most important considerations are: - ANSWER the connection between a prospective donor's passion and an organization's need. When soliciting leadership gifts for an organization, it is most important to: - ANSWER enlist the prospect's peers to make the visit. A governing board's principal relationship is with the organization's: - ANSWER chief executive officer. Which of the following responses best describes three hidden costs encountered in a capital project? - ANSWER Fundraising, attrition, and inflation In the context of rating prospective donors, LAI stands for: - ANSWER linkage, ability, interest. In evaluating fundraising programs, the relationship between fundraising costs and results is linked to each method used, the maturity of each program, and - ANSWER previous performance. An organization has decided to hire a local fundraising consultant to work in its office one day per week to oversee and direct a campaign. The CEO has asked you to ensure the organization's interests are protected. A contract should be written establishing that the consultant will be paid: - ANSWER in accordance with a code of professional ethics. Establishing the financial range of gifts that a donor will reasonably consider is referred to as a donor: - ANSWER rating The single most important element in a direct mail campaign is: - ANSWER the list of prospective new donors. Which method is most effective in establishing a two-way relationship with a donor? - ANSWER Allowing the donor to select the time, frequency and method. In hiring a firm for contracted services, it is best to start with: - ANSWER referrals. The most important open line of communication is between the fundraising director and the organization's - ANSWER chief executive officer. Before beginning to write the case for support for an upcoming campaign, it is most important to: - ANSWER acquire an understanding of the various donor target markets. Which of the following is the most critical factor affecting the success of a capital campaign? - ANSWER Leadership by the board. A nonprofit organization considering a new planned giving/legacy program must first: - ANSWER understand it may take years for a return on investment. The fundraiser has been asked to report on monthly activities. In designing the written report, what are the best activities to measure? - ANSWER Phone calls, visits, solicitations An integrated approach to fundraising is best described as: - ANSWER matching cases with constituencies and setting goals for each segment and each case or campaign. Which statement is the most true about solo solicitors? - ANSWER May be appropriate depending on the relationship between the prospective donor and solicitor Accuracy in constituents' records within an organization's donor database is best measured by the number of: - ANSWER valid addresses When an evaluation component is being incorporated into a funding proposal, all of the following steps are necessary except: - ANSWER stating objectives as broadly as possible. Effective use of volunteers is essential to fundraising success. Which is the most important rule in using volunteers? - ANSWER Avoid wasting volunteer's time. What is the best indicator of an individual's capacity for support? - ANSWER level of personal wealth An organization is faced with embarrassment due to public knowledge that an audit has raised questions about the expenditures of government grants. Concerned about donor reaction, the organization should: - ANSWER be open and forthright in publicly stating its position. The first part of a fundraising appeal letter that a prospective donor will usually read is the: - ANSWER postscript. The first step in writing a fundraising marketing plan is to: - ANSWER analyse internal resources, the external environment, and macro factors. Of the following, the most important reason to maintain records of donations is to: - ANSWER ensure that donors are acknowledged properly. In direct mail, different prospecting approaches are best used to determine: - ANSWER cost effectiveness In a capital campaign program, the "special gift" opportunities offered to both large and small donors are commonly known as: - ANSWER commemorative gifts You have analyzed the basic data (participants, income, and expense) from a direct-mail solicitation. In order to determine the key performances measurements and effectively evaluate your direct mail program, you will need to examine the: - ANSWER percent participation, average gift size, net income, average cost per gift, cost of fundraising, and return. Special events are a major instrument in the promotion of causes and organizations. They also provide all of the following except a/an: - ANSWER high probability of exceeding the goal. The most effective way to solicit major gifts is through: - ANSWER person-to-person contact by a fundraiser of the appropriate level. The most important attribute of a promising prospective donor is: - ANSWER interest and involvement in the donor-seeking organization. As part of its strategic plan, an organization has decided to expand its fundraising office from one person to five. Of the following positions, which would be the last position that would need to be added? - ANSWER planned giving officer Volunteers who are also donors give at: - ANSWER significantly higher rates than donors who do not volunteer. When organizing a new fundraising program, the fundraising professional should first determine if the organization has: - ANSWER a statement of purpose or mission. To move towards a successful "ask", it is most important for a constituency development plan to include: - ANSWER strategic communication measures and approaches to reach constituents. The immediate goal of corporate participation in cause-related marketing is to: - ANSWER enhance the corporate image. In which situation is a case statement used? - ANSWER Ongoing fundraising programs To identify prospective consultants, the next step after getting budget approval is: - ANSWER talking with various organizations and professional associations that have used consultants A fundraiser is planning to ask a large company to sponsor a special event. The first thing the fundraiser should do is: - ANSWER see if the company has given to the organization in the past. The prospective donor is the head of a large publicly held corporation. One indication of the prospective donor's ability to make a gift might be found in that corporation's: - ANSWER proxy statement. The primary objective of a cultivation call on a prospective major gift donor is to: - ANSWER learn about the prospective donor's interest in the organization and its programs. The fundraiser's top ten prospective donors to a new campaign are most likely to be: - ANSWER people who have given before. Defining board and staff leadership roles is best achieved by: - ANSWER determining and conveying expectations. When an organization volunteers are ineffective, it is most often because they: - ANSWER have not been appropriately trained by the organization. Securing corporate gifts is most improved by knowing the corporations - ANSWER charitable giving decision makers Thank you receipts for gifts are most influential when sent to donors within - ANSWER two days. For many organizations, it may be difficult to conduct an annual campaign and a capital campaign simultaneously. A best-practice approach would be to: - ANSWER provide donors with a clear expectation of the importance of supporting both campaigns. To retain donors and increase their giving, it is most important to ensure that they: - ANSWER understand how their gift will be used and the effect they will have on the organization. A request from a donor to change the receipt date for the donor's contribution is unethical: - ANSWER in all circumstances. A contract between an organization and a consultant should include: - ANSWER the scope of work describing services to be provided and performed and work to be accomplished. A fundraiser at an animal shelter is responsible for renting a mailing list for an acquisition mailing. The best list characteristics for success will consist of: - ANSWER previous donors to another animal shelter. In recruiting to fill a board vacancy, the most important factor for the nominating committee to consider is the person's: - ANSWER commitment to the organization and mission. Successful, value-based philanthropy and fundraising rely mostly on a: - ANSWER compelling mission statement. Of the following, the most effective method of gift fundraising of a prospect would be: - ANSWER a visit by a peer, accompanied by the organization's fundraising professional. Which of the following would be the most cost effective fundraising technique in an annual campaign? - ANSWER Personal visit from a volunteer A fundraising structure that has a focus on an organization's needs, targets all constituencies, uses an intensive time frame, extensive promotion, and ultimately seeks monetary success is said to be oriented toward: - ANSWER campaign The best reason an organization might contract with a professional fundraising consultant is because the nature of the fundraising project is - ANSWER beyond the organization's experience. The most important reason for a charity to conduct its affairs with ethical integrity is to: - ANSWER maintain the public trust. The guideline on foundation fundraising by staff is that they: - ANSWER may solicit in carefully selected situations. Changes to the restriction on board designated funds: - ANSWER can be supported, because board-designated funds represent only an internal designation. When recognizing a major donor, it is most important for the fundraising professional to consider the: - ANSWER donor's preference for recognition. In conducting prospect research, not-for-profit organizations should establish policy guidelines that: - ANSWER identify a prospect research strategy and code of professional practice. In relation to major gifts, what is meant by the term letter of intent/pledge? - ANSWER A non-binding agreement outlining a donor's intent for a gift or bequest and payment terms. As stewards of the relationship between nonprofits and donors, fundraising staff are responsible for: - ANSWER earning and maintaining donor trust. A regularly published summary of the financial and program status of an organization or institution is typically referred to as the: - ANSWER annual report The primary benefit of a gift acknowledgement letter is: - ANSWER donor cultivation Annual giving programs tend to grow as a result of: - ANSWER increasing prospect cultivation. The first step in developing a strategy for communicating with donors is to: - ANSWER segment the organization's audience. Persons asked to help rate the prospects should be those who - ANSWER know the majority of prospects well. The basic management functions for which the director of fundraising has primary responsibility are: - ANSWER planning, organizing, executing, and evaluating the plan. In seeking support for the charitable organization, a volunteer should first: - ANSWER have a strong commitment to the organization. Good volunteers often fail to be good board members because the organization fails to: - ANSWER use their skills and talents properly. A case statement is described as: - ANSWER persuasive tool often used in fundraising The first function of fundraising staff in a capital campaign is: - ANSWER preparing a campaign timetable. When soliciting a contribution from an individual, it is most effective to: - ANSWER Meet in person In defining program objectives when writing a grant proposal, it is necessary to make a/an - ANSWER precise statement of anticipated results. The primary goal of an organization's fundraising plan should be to: - ANSWER build philanthropic understanding and fundraising ownership among constituents. Donors are most likely to make additional gifts if they: - ANSWER are informed how the gift was used and whether it made a difference. The primary reason for establishing giving levels is to: - ANSWER encourage larger gifts. In the planning stages of establishing a fundraising program for a NFP education institution, which of the following would be the most promising prospective donors? - ANSWER Graduates, board members, and prior donors. Which of the following is the most accurate statement regarding corporate donors? - ANSWER Corporate donor communication should be concise and thoughtfully prepared. The main purpose of the process of ongoing cultivation in a capital campaign is to: - ANSWER present the case for support. A former patient contributes a large gift to a hospital. While the gift will be acknowledged on a plaque in the hospital foyer, the donor has clearly stated a desire for no further public recognition. What is the most likely motivation for this gift? - ANSWER personal experience. To determine the progress being made in improving an organizations gift support, it is best to compare this year's gift income with - ANSWER last year's gift income. When an intersection of interest, readiness and capacity occurs, the - ANSWER prospect is ready to be asked for a gift. Given that volunteers are only as effective as staff can enable them to be, the most important role a professional fundraiser can play is: - ANSWER as a steward and partner. What concept is best defined by a "enduring belief that specific modes of conduct are personally or socially preferable to others"? - ANSWER values To develop a strong culture of philanthropy across an organization, the board's first priority should be to: - ANSWER review the mission and the role of philanthropy in achieving it One major benefit to involving leaders and volunteers in the process of prospect research is that it: - ANSWER gives them confidence in the organization's capacity and their ability to help raise funds. The foundation of a marketing plan for fundraising is: - ANSWER constituency analysis The most critical aspect of a successful fundraising program is how the fundraiser - ANSWER stewards donors To research charitable foundations as possible funding sources, which of the following should be most strongly considered as indicators of a charitable foundation's willingness to look favorably upon a grant proposal? - ANSWER The objectives of the charitable foundation and the types of programs typically funded. An organization that helps low income elderly individuals plans to launch its first annual giving campaign and needs to develop a list of potential donors. Which activity would result in the identification of the likeliest donors? - ANSWER Use the recipients of the organization's monthly newsletter and other in-house contacts to develop the list. The best way for an organization to open the door to a personal cultivation meeting with a new prospective donor is to: - ANSWER have a volunteer, staff member, or current donor who has a good relationship with the prospective donor make the initial contact by letter or telephone. Special events demand all of the following except - ANSWER a large professional staff. The least effective tactic that is used in training volunteers to overcome fear of soliciting is: - ANSWER practicing skills during a cold call. Organizations benefit most from what aspect of board involvement? - ANSWER Maintenance of the public trust as stewards of funds Gift acceptance policies should include: - ANSWER the right to accept or decline gifts. Which group is the last to participate in developing the organizations fundraising case statement? - ANSWER Marketing firm A fundraiser is implementing a donor relations program for an organization. Stewardship of a donor should begin with the donor's - ANSWER first gift. The benefit and value of philanthropy through voluntary agencies and NPO are that - ANSWER choices and alternatives can be offered that might not be available under a system that relies solely on government funding. A fundraiser is charged with implementing a donation processing system for an organization. The recommended maximum time required to acknowledge a gift from a donor is: - ANSWER 48 hours The most important element of a major gift cultivation plan is - ANSWER communicating with the donor regularly. Which basic financial statement best presents the results of operations for a specific period of time? - ANSWER Statement of income and expenditure. Thank you letters are most effective when they: - ANSWER are personalized and tailored to the appeal. In direct mail, the factor that most affects the percentage of responses from current donors is the: - ANSWER years-of-giving history. A fundraiser is visiting an established donor to ask for a major gift. In deciding an appropriate amount to ask, the best course of action would be: - ANSWER ask for a donation at what has been determined to be the donor's maximum capacity level. A new director of fundraising for a not-for-profit organization is seeking major gifts from individuals. The success of the fundraising plan will depend most strongly on: - ANSWER matching prospective donor interests and capacities with gift opportunities. The creation of a recognition society should be considered for the purpose of: - ANSWER bonding the organization and its donors. The most important approach to utilize the strength of volunteers in fundraising is to - ANSWER assign tasks that match volunteers interests and skills. The best practice for acknowledging a gift from a first time donor is to - ANSWER thank the donor within 48 hours. Volunteers in not-for-profit organizations may expect their performance evaluation from - ANSWER peers What is the best first step in the major gift cultivation process? - ANSWER Identify prospective donors A primary function of most special events is to - ANSWER heighten the organizations profile. A donor tells a fundraising professional very personal information that would be helpful in fundraising efforts. The most appropriate action would be to: - ANSWER record and use the information only with the donor's permission. A fundraiser is charged with identifying prospects for a planned giving or legacy program and starts with the annual fund donor list. The most critical indicator of a donor's willingness to support the organization in a more significant way is the - ANSWER number of years the donor has made a gift. Approaches for major gifts must at least - ANSWER show how a project or gift will fit into the organizations future. Which of the following has the best chance for success in a direct mail program? - ANSWER Targeted mailing to a group of people who have a relationship to the organization. Arranging for prospective donors to meet with an organizations leaders, sending handwritten notes, and issuing invitations to site tours are good examples of - ANSWER cultivation. When adding staff for an expanded program it is best to hire: - ANSWER a person whose skill and experience augment those of present staff. A donor offers the fundraising professional a personal gift of cash in appreciation of the officer's good work. The fundraising professional's most appropriate response is to: - ANSWER decline the gift but offer to accept it on behalf of the organization. When disclosing amounts raised and names of donors, prior to publication, it is necessary to ensure that - ANSWER all donors authorize the disclosure of their names. Which of the following would be most successful in strengthening the bond between an organization and its top donors? - ANSWER Outline a plan for the year that includes regular contact with each of them. According to the International Statement of Ethical Principles in Fund Raising, compensation for professional fundraiser may include: - ANSWER salary and performance based bonuses. A fund development director's annual salary is best established by: - ANSWER the comparable salary ranges and the individual's experience. An initial cultivation visit with a corporate donations officer will offer the best opportunity to present a - ANSWER formal oral presentation, usually of short duration. Which one of the following is a correct description of the primary focus of marketing? - ANSWER Appealing to prospect's interests In an annual fund program, a LYBUNT is a person who - ANSWER gave last year but not this year. The ethical basis for setting campaign consulting fees is a - ANSWER flat fee for services rendered. Large corporations will be most influenced to make generous annual gift by the: - ANSWER corporation receiving a benefit in return for its gifts. In marketing, long-range goals are best attained by: - ANSWER achieving the greatest possible consumer satisfaction. The average length of time it takes a new charity to establish predictable levels of annual giving is - ANSWER 3 to 4 years. A grant-making body has awarded funding for particular project at an organization. The project is eventually completed without the need for a grant. The best course of action would be for the organization to - ANSWER contact the grantor and request to use the funds for a similar project. The key research information needed for prospect review meetings and discussions include: - ANSWER gift range and inclination to give. The most common reason for straying from an organizations mission is - ANSWER deterioration of leadership In preparation of the case statement, which of the following important pieces of information should be included first? - ANSWER Mission statement of the organization. The process of collecting and analyzing information on those who may have the ability to support a charitable program is called: - ANSWER prospect research. The most successful method of foundation fundraising is to submit: - ANSWER requests to foundations who's interests and financial data identify them as prospective donors. What are the key components of prospects research? - ANSWER Linkage, ability, and interest The most important, well-thought, board-approved institutional policy that every fundraising entity should have and follow is a - ANSWER gift acceptance policy. The most effective method for qualifying major gift prospects is to: - ANSWER invite a select group to review meeting to discuss the people they know. Prospective donors for an organization are best identified by: - ANSWER links with the organization, giving ability, and interest. A fundraiser for a girl's school is considering a list of donors. Mrs. A retired 10 years ago after teaching at the school for 35 years. She has no children and lives with her husband who used to run a small business. Although they have a modest income, the couple has given several gifts to the school. Mrs. A should be considered as a prospect for what giving opportunities? - ANSWER planned giving program Appropriate methods for developing goals and objectives include all of the following except: - ANSWER testing new programs. In a direct mail program, it is a general principle that former donors should continue to be asked: - ANSWER until it can be demonstrated that the cost of each response is higher than the cost of acquiring a new donor. What is the primary motivation that drives a major donor? - ANSWER Involvement When evaluating a mailing to existing donors, the most important calculation is: - ANSWER return on investment The most effective method for creating a climate favorable to support by local businesses is to: - ANSWER Emphasize the full impact the organization has on the community and its citizens If it is correct that 90% of the gifts to a capital campaign come from 10$ of the donors, the chief fundraising professional would best manage resources by: - ANSWER Implementing cultivation and fundraising strategies targeted to the top donors and prospects. The logical basis of a case statement is the organizations - ANSWER plans for the future. What is the most significant factor that a NPO would want to use in evaluating the director of development? - ANSWER An increase in net-contributed income Direct mail, telephone solicitation, and personal fundraising are all used: - ANSWER in annual giving campaigns. To maximize the outcome of working with volunteer leadership, it is most important for staff to: - ANSWER provide for effective use of volunteer time and skills. Donors are primarily motivated to make philanthropic gifts - ANSWER when they perceive that an organizations mission, values, and goals align well with their own philanthropic interests. To gain support for an organization, it is best to stress the: - ANSWER benefits that the organization provides to its individuals. For convenience, the fundraising professional has kept separate personal files on major donors. Upon accepting a new career opportunity and leaving the present employer, the fund development officer should: - ANSWER leave the files for the successor. When possible, funding proposals submitted to foundations should be signed by which official of the applicant organization? - ANSWER The board chair or chief executive officer While conducting a feasibility study for a capital campaign, an organization discovers that the community is generally unaware of its activities. The organization should: - ANSWER delay the campaign and develop a communications and cultivation strategy. Before beginning the concept, design and writing of a case statement, an organization must consider: - ANSWER anticipated use of the case statement. The most favorable prospects for an organization for annual gift support are - ANSWER individuals The primary reason people do not give money to charity is that they - ANSWER are not asked to give to a charity. When a request for funding has been denied, the fundraiser should: - ANSWER thank the organization for its careful consideration and ask for information on the reasons for the proposal rejection. The single greatest mistake made in fundraising campaigns is: - ANSWER not asking for the gift. Which of the following is usually not a function of the board of directors? - ANSWER Hiring fundraising staff members With respect to fundraising cost ratios, which is the most expensive? - ANSWER Acquiring a new donor for the organization Fundraising goals for a NFPO should primary be based on - ANSWER an analysis of previous years of fundraising. When conducting a visit on a prospective donor, it is important to: - ANSWER listen for a connection between the prospective donors passions and the organizations needs. Which of the following ways of portraying an organization would be most effective for obtaining a grant? - ANSWER On the verge of greatness A communications plan being developed to support an initiative at a nonprofit organization should be evaluated first with regard to the organization's - ANSWER mission and vision. A fundraiser is preparing to announce a campaign goal at a kick-off meeting in 2 months but has not yet been successful in recruiting the person of his/her choice as campaign chair. The fundraiser should: - ANSWER be patient and persistent. The concept of "development" as perceived in the fundraising community is the promotion of understanding, participation, and support, and is generally accepted to include all of the following principles except - ANSWER demographics. A tennis-loving donor offers to contribute $1 million to build a new tennis facility at a NPO. Although this facility is not in the current master plan, it would be in keeping with the organization's focus on mental and physical health. Who decides whether to accept this gift? - ANSWER The board of the organization When preparing a fund development plan, it is most effective to: - ANSWER build the plan in relation to the organization's strategic plan. The final step in the expansion of a fundraising operation is the creation of a: - ANSWER planned giving program. The key attribute that enables a fundraiser to inspire a donor to make a gift is: - ANSWER commitment to and passion for the cause. The first step in creating an effective marketing plan for a NPO is to: - ANSWER conduct a marketing audit to evaluate and record the current state of the organization's marketing efforts. Volunteers should not make a fundraising visit until: - ANSWER they make a contribution. The majority of prospective donors for major gifts will be most interested in: - ANSWER what their gift will accomplish. An organization's community image is shaped strongly b the perceived quality of its - ANSWER leadership The most effective way to keep donors meaningfully engaged in the work of an organization is to - ANSWER communicate about community needs that are being addressed by the organization. Market segmentation is best defined as: - ANSWER submarkets or segments of the public Before undertaking a capital campaign, it is most essential to - ANSWER determine the organization's capacity to succeed. The primary goal of a good planned giving marketing program is to - ANSWER identify prospective donors. [Show More]

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