Nonprofit Management & Impact Evaluation 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 Nonprofit Management & Impact Evaluation flashcards as text
Which of the following correctly describes the tax standard applied to private foundation self-dealing under IRC 4941?
Answer: Virtually all financial transactions between a private foundation and its disqualified persons are prohibited, regardless of fairness
IRC 4941 prohibits virtually all financial transactions between private foundations and disqualified persons—substantial contributors, managers, and family members—even if the terms are favorable to the foundation.
Under IRS rules, which test measures whether an organization receives adequate public financial support to qualify as a public charity rather than a private foundation?
Answer: The public support test under IRC 509(a)(1) or 509(a)(2)
The public support test (Schedule A of Form 990) measures whether an organization receives a significant portion of its support from governmental units, the general public, or program service revenues.
The key distinction between a designated fund and a field-of-interest fund at a community foundation is:
Answer: A designated fund supports a specific named charity; a field-of-interest fund supports a broad charitable purpose area with grantmaking discretion
A designated fund names a specific charity as beneficiary; a field-of-interest fund supports a general charitable purpose such as environmental education, with the community foundation exercising grantmaking discretion within that field.
Capacity building grants in the nonprofit sector refer to funding that:
Answer: Strengthens a nonprofit's organizational infrastructure, systems, and leadership to improve long-term effectiveness
Capacity building grants fund organizational infrastructure—strategic planning, technology, staff development, board training, financial systems—rather than direct program services, strengthening the organization's ability to deliver impact at scale.
Which of the following most accurately describes venture philanthropy?
Answer: Applying venture capital principles—high engagement, multi-year support, capacity building, performance metrics—to philanthropic grants
Venture philanthropy applies VC-style engagement to the nonprofit sector: long-term relationships, capacity building support, performance milestones, and a focus on scaling effective models rather than making small, passive grants.
A nonprofit's unrestricted net assets are significant for philanthropic advisors because they represent:
Answer: The financial cushion available for organizational flexibility, sustainability, and response to unexpected challenges
Unrestricted net assets serve as the nonprofit's operating reserve and financial buffer—organizations with strong unrestricted reserves can weather revenue shortfalls and invest in strategic opportunities.