Fundraising Final Review

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

False

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

False

To be a successful fundraiser, it is important to remember that the primary reason people give to charities is to take advantage of the tax credit a donation they will receive. People are always financially better off giving to a NPO ad taking the tax deduction than they would be by keeping the money and having to pay taxes on it.

False

Acquiring a new donor is also called "converting"

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 __________ a corporation's giving to a NPO is purposeful and made with specific objectives in mind consistent with the corporation's business strategy.

strategic collaborations/strategic philanthropy

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

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

There is something close to a consensus in the literature that the ideal location for major gift solicitation is at a neutral site, and never at the prospects home or office or at the organization's location.

False

___________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

The tax incentives for donating to a NPO have been placed in the law intentionally in order to encourage people to make gifts and to make it possible for them to give more

True

The three primary objectives of an "annual giving program" are: 1) acquisition of new donors, 2) renewal of support, and upgrading gifts.

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). (T/F).

True

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

Ultimate gift

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 agreement

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

linkage, ability, and interest

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

moves

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

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

False

Nonprofit organizations are primarily closed systems.

False

The _______________ technique to telephone solicitation involves starting with small request, and working up to something more substantial.

foot-in-the-door

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

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

False

The motivations for corporate philanthropy relate primarily to business goals.

True

According to a 2003 study, most donors report that having their name listed by gift level will cause them to give more than they otherwise would have.

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

First-time donors are most likely to be found outside the organization's constituency.

False

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

False

If the cost of acquiring a new donor exceeds the amount of the donor's first gift, that should be considered a fundraising failure.

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

Utilizing "cold lists," or list of donors purchased from other nonprofits or organizations is an efficient and effective means of acquiring new donors since other organizations have already done the work necessary to determine that these individuals are likely to give to charity.

False

When soliciting for a planned gift, it is important to inform the prospect of the amount of savings the donation will create for his or her heirs in estate taxes, because estate taxes are sizable and apply to most estates over $5,000.

False

With major gifts fundraising, progress is measured by the amount of the gift.

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

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

Major gifts are defined by ______________.

The dollar amount (e.g., larger organizations usually $100,000 or more, but for smaller nonprofits it could be a gift of $5,000).

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 corporate foundation is a private foundation under the tax law, and the company receives a tax deduction when it transfers funds to the foundation.

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

Cause-related marketing involves an arrangement in which the company gives the nonprofit a set amount of money or percentage of the sale every time someone buys a product; e.g., every time you buy a cup of coffee $.10 was to a charity.

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

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

It is essential that the individuals who will participate in the solicitation meeting are well prepared with a plan for how they intend the meeting to unfold. Therefore, some of the questions to be considered in advance include: who should be involved in the meeting, where the meeting be held, and what amount should be solicited

True

It is generally cheaper to retain & cultivate current donors than to acquire new donors.

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

Nonprofits generally hold events for one of 4 possible objectives: 1) prospect identification; 2) cultivation of donors; 3) solicitation; or 4) stewardship.

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

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

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

True

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

True

The door-the-face technique involves starting with a high request, which the individual is likely to deny, then asking for something less.

True

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

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

The purpose of the _______________ is to qualify potential prospect with regard to the "I" of LAI - to determine interest and also to obtain additional information and insight that will add to the existing research regarding the individual's financial capacity.

discovery visit

A ___________ is a gift made from a person's estate following his or her death based on the instruction to his or her executor written in a will.

bequest

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

As discussed in the text and lectures, there are three types of planned gifts - outright planned gifts, expectancies, and

deferred gifts

The theory behind the _______________ is that people will respond more favorably when first asked how they feel.

foot-in-the-mouth

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

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

primes

____________________ is the process of developing descriptions of a typical donor of your organization, and then soliciting others with similar profile.

profiling and targeting

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

program

_______________ 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