Practice Test Geeks(CAP) Certified Philanthropic Advisor Practice Test
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CAP Philanthropic Vehicles & Structures Flashcards

6 cards from real CAP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 6 CAP Philanthropic Vehicles & Structures flashcards as text

  1. A donor wants to establish a permanent endowment that generates annual grants to community nonprofits. Which vehicle is most appropriate?

    Answer: Donor Advised Fund at a community foundation

    A DAF at a community foundation is ideal for creating a permanent endowment-like structure that generates ongoing grant recommendations to local nonprofits.

  2. What distinguishes a Charitable Remainder Unitrust (CRUT) from a Charitable Remainder Annuity Trust (CRAT)?

    Answer: A CRUT pays a fixed percentage of annually revalued assets; a CRAT pays a fixed dollar amount

    A CRUT pays a fixed percentage of the trust's annually revalued assets (so income fluctuates), while a CRAT pays a fixed dollar annuity regardless of trust performance.

  3. A private foundation that converts to a public charity status to avoid private foundation rules is known as a:

    Answer: Terminating Foundation

    A private foundation can terminate its status by distributing all assets to public charities or by converting to a public charity, a process called foundation termination.

  4. Which of the following is an advantage of a Donor Advised Fund over a private foundation for most donors?

    Answer: DAFs have no minimum distribution requirements; private foundations must distribute 5% annually

    DAFs do not have mandatory annual distribution requirements, giving donors flexibility on timing, while private foundations must distribute at least 5% of assets annually.

  5. Under the SECURE Act 2.0, what is the maximum annual amount a donor aged 70½ or older can transfer directly from an IRA to a charity via a Qualified Charitable Distribution (QCD)?

    Answer: $105,000

    Under SECURE Act 2.0, the QCD limit is indexed for inflation; for 2024, it is $105,000 per individual, up from the previous $100,000 cap.

  6. A family wants ongoing involvement in grantmaking with maximum control, is willing to file Form 990-PF, and plans to fund it with $5 million. Which structure best fits?

    Answer: Private Family Foundation

    A private family foundation offers maximum donor control over grantmaking, investment, and programming, appropriate for donors with substantial assets who want an active philanthropic role.