MGMT Final Exam

Emotional marketing uses basic emotions to elicit a consumer response. It connects with people at the core of their feelings and moves them to act with an emotionally based response.

true

Estate taxes affect very few people because currently it only applies to estates with assets over $5,340,000.

true

Female-headed households are generally more likely to donate to a nonprofit than male headed households.

true

Fundraising is an ongoing process rather than a cycle, meaning that steps within the process are always underway with regard to some donors and prospects.

true

A/An ________________ is usually a term used to describe the largest gift a donor makes during his/her

ultimate gift

All nonprofit organizations are tax-exempt - that is they are not required to pay federal taxes on their income, but only those classified under section __________ are also eligible to receive gifts that are tax deductible for the donors.

501(c)3

Organizations classified under __________ have limitations on the amount they can spend on lobbying, while __________ organizations can spend money on lobbying without limitation.

501(c)3;501(c)4

Organizations that are exempt under section __________ of the tax code are "social welfare organizations" encompassing what we would generally call advocacy organizations.

501(c)4

In the lectures and text, the Pareto Principle is used to describe the fact that often:

80% of an organization's revenue usually comes from just 20% of its donors.

The STEPPS approach to strategic messages involves using:

Social currency, Triggers, Emotion, Public, Practical value, and Stories

In the textbook and lectures, charity is defined as giving intended to meet current human needs, such as aiding victims of a natural disaster.

True

In the textbook and lectures, philanthropy is defined as investment in infrastructure of society.

True

There are essentially three nonprofit - government models. One is where the nonprofit is supplementary to government, another is where nonprofits are complementary to government, and a third is where nonprofits are:

adversaries of government

Gifts that are relatively small, usually less than $1,000; often repeated on a regular (often annual) basis are generally called ________________.

annual gifts

_______________ are initiatives or moves undertaken for a group that includes one or more prospects, but are not designed to target just those prospects.

background initiatives

If an individual buys a stock for one thousand dollars, and later sells it for $2,000, he or she will probably have to pay __________ on the $1,000 they gained on the sale.

capital gains

An arrangement in which a company gives a nonprofit organization a set amount of money or percentage of the sale every time someone buys the company's product; e.g., every time you buy a cup of coffee $.10 was to a charity, is called _______________.

cause-related marketing

_______________ are generally undertaken with a qualified prospect to advance the relationship. They often include providing information to the prospect, and have the primary purpose of matching the organization's program needs with the donor's interests.

cultivation visits

A disadvantage to a corporation in forming a corporate foundation and giving money to the foundation is that the foundation is not considered a charity, and therefore, the corporation is not entitled a tax deduction when it transfers funds to the foundation.

false

An organization's vision statement defines the organization's objectives and its approach to reach those objectives. It answer questions such as: what do we do? whom we serve? how do we serve them?

false

As a result of the Pareto Principle, NPOs should focus the majority of their efforts on high-end donors.

false

Donations which are earmarked for specific purpose are considered to be unrestricted.

false

Expectancies are gifts that the donor gives money now, but the nonprofit organization does not receive full benefit until after the donor's death.

false

For groups to make optimal decisions, it is a best practice for leaders to first share their opinions with the group so the group will know what the leader expects.

false

Groupthink is a mode of thinking that people engage in when they are deeply involved in a cohesive in-group, which can help the group reach better decisions than they would otherwise reach as individuals.

false

If we need to raise $1 million for our nonprofit, an effective strategy we could implement is a multiplication strategy - to try to obtain 1,000 gifts of $1,000 each.

false

Nonprofit organizations are primarily closed systems.

false

One overriding characteristic of nonprofit organizations is that they are prohibited from making a profit.

false

Public charities face restrictions that do not apply to public foundations, including the requirement that they refrain from lobbying and not make grants to support lobbying activity, except under narrow circumstances. Private foundations can engage in lobbying within limits.

false

Restricted gifts can be used at the discretion of the organization, often used to support the current-year operating budget

false

Soliciting gifts using direct mail or advertising in the media is more effective than face to face solicitation, particularly for major gifts, because these methods reach far more people.

false

Taking advantage of the incentives provided for giving to charity in the tax laws is often considered tax evasion and unethical.

false

The cajoling model or scolding model is the most effective way of communicating with wealthy donors.

false

The difference between major gifts fundraising and speculative fundraising is that speculative fundraising focuses on cultivating relationships, while major gift fundraising focuses on volume.

false

The fundraising process ends with "the ask," or the solicitation step.

false

The non-distribution constraint means that a nonprofit's executives must be paid low salaries, or at least below those of for-profit executives.

false

The tax deductibility of gifts made charitable nonprofits should not be viewed as a tax "loophole" because it was unintentionally provided as an incentive to giving.

false

Under the tax code, sponsorships and advertising are treated similarly, meaning that corporations can take a tax deduction as a gift if pays a NPO for a corporate sponsorship or to advertise the corporation's product.

false

When building a fundraising team it is best to not include board members because they are too busy overseeing the day-to-day operations of the nonprofit organization.

false

When trying to market our nonprofit we should stick with facts rather than tell stories because facts are easier to remember then stories.

false

__________ is focused on a particular objective or set of goals, while __________ is focused on long-term commitment to the financial and physical growth of the institution.

fundraising, development

In the context of failure theories, nonprofit organizations are __________ since they provide goods and services government and for profit organizations do not.

gap fillers

One significant risk of resource dependency is __________ - actions taken by the nonprofit to alter its activities to satisfy the contributor of funds.

goal displacement

A SWOT analysis is a process where members of an organization identify __________ strengths and weaknesses, and __________ opportunities and threats.

internal; external

A _______________ is where a nonprofit permits a corporation to use its brand or logo to sell its product, either on the product itself or in advertising, and the corporation pays the nonprofit royalty for the use of its name.

licensing agreements

The principle criteria for determining whether someone is a prospect worth pursuing for a donation is:

linkage, ability, interest

The interactions undertaken to move prospects through the fundraising pipeline are commonly known as

moves

__________ are people that are in the best position to help guide and carry out the most appropriate foreground and background initiatives.

primes

The 5R's for the "Ask" include the: right person, asking the right person, at the right time, for the right amount, for the right __________.

program

___________are organizations that receive support from a relatively large number of donors or from government, while _______________ usually have only one or a few donors.

public charities, private foundations

NPOs should follow the strategy of ________________ where the organization begins by soliciting gifts from the top down, and inside out, soliciting larger gifts before smaller gifts and from those closest to organization before those whose connections are less strong.

sequential fundraising

When utilizing emotional marketing it is important to use the right emotion. This means which emotional response you try to elicit depends upon what action or behavior you want in return. For example, provoking happiness will likely lead to more _______, while provoking sadness will likely lead to more ________.

shares, clicks

_______________ is where a corporation gives to a nonprofit organization according to a plan that relates the Corporation's philanthropy to its overall strategic and business goals.

strategic philanthropy

Creating strategic messages using the STEPPS format means utilizing: social currency, __________, emotion, public visibility, practical value, and stories.

triggers

A benefit of giving an asset such as stock or real estate directly to charity versus selling it and giving the proceeds of the sale to the charity is that there is no capital gains tax if appreciated property is given directly to a nonprofit organization.

true

A distinction between fundraiser and a development officer is that a fundraiser is an individual skillful and soliciting gifts, while a development officer needs to also be a strategist and manager of the entire development process.

true

Income tax law makes the presumption that every charitable nonprofit is a private foundation unless they can demonstrate that it is in fact a public charity.

true

Major gifts are defined by dollar amount.

true

No donor ever gains financially from making a gift - even considering the subsidy that the charitable deduction provides, a donor would always be better off keeping the money and paying taxes and by giving it away.

true

One of the benefits of strategic planning is that it can help an organization avoid goal displacement and mission drift by making the organization focus (or refocus) on its mission.

true

One principle for creating messages that are easy to remember is "simplicity" - you must find the essential core of your idea.

true

One way to create simple and profound messages from complex ideas is to use schemas - that is, to tap into the existing memory of your audience.

true

Private foundations are required to spend at least 5% of the value of their invested assets each year.

true

Proportionate giving means that people give in proportion to their financial capacity.

true

Some of the limitations of strategic planning are that it requires much time and effort, and can build overconfidence about the future.

true

Successful fundraising is based on the relationship between a nonprofit organization and its donor.

true

Tax deductions for giving to a charitable nonprofit produces a tax savings which in effect lowers the out of pocket cost of making the gift.

true

The mission statement is so central to all nonprofit organizations that they are said to be mission driven.

true

The motivations for corporate philanthropy relate primarily to business goals.

true

The non-distribution constraint means that a nonprofit organization is prohibited from distributing its net earnings among individuals who oversee the organization. This includes board members, staff and directors.

true

Two relevant variables when considering whether to pursue a prospect are his/her capacity (financial capacity to make a gift), and inclination (likelihood he or she will make a gift).

true

Unlike happiness and sadness, which mostly just pulls on the heartstrings of the audience, anger and disgust can elicit an intense emotional reaction, which often turns into action (e.g., sharing, donations, volunteering, etc.).

true

While marketing and public relations include activities in which businesses, nonprofits, and government agencies all engage, fundraising is an organizational function that is exclusive to nonprofit organizations.

true

With major gifts fundraising, progress is measured by the progression of the relationship with the donor throughout the cultivation cycle, not only by the gift.

true

Without clarity about missions and goals, an organization has no rationale to refuse a gift that might detract from its mission, bring additional cost or controversy.

true