Mixed Deck — All CAP Topics Flashcards

When a CAP advisor becomes aware that a client's planned gift may be used by a nonprofit in ways that conflict with the client's stated values, the advisor should:

Answer: Proactively advise the client of the concern, ensure they have full information, and respect their decision after informed deliberation

The advisor's duty includes ensuring the client has complete and accurate information relevant to their philanthropic decisions—including potential conflicts with their own values—before completing any transaction.

Which document must accompany IRS Form 8283 Section B for a non-cash gift exceeding $5,000?

Answer: A qualified appraisal prepared by a qualified appraiser

A qualified appraisal conducted by a qualified appraiser no earlier than 60 days before the donation and no later than the tax return due date must accompany Form 8283 Section B.

A philanthropic advisor discovers that a donor's charitable goals have shifted significantly since the original gift plan was established. What is the most appropriate first step?

Answer: Schedule a comprehensive review meeting to reassess the donor's current philanthropic vision

A comprehensive review meeting allows the advisor to understand the donor's evolved goals before recommending any changes to existing structures.

Subrogation in insurance claims refers to the insurer's right to:

Answer: Pursue a third party responsible for the insured's loss after paying the claim

Subrogation allows the insurer, after compensating its insured, to step into the insured's shoes and recover that payment from the negligent third party.

A newly widowed client contacts their CAP advisor wanting to immediately restructure all charitable giving as a tribute to their late spouse. The advisor's best immediate action is to:

Answer: Gently encourage a period of reflection before making major irrevocable decisions

Encouraging reflection before irrevocable decisions protects the client's long-term interests while honoring the emotional significance of the moment.

A charity's Form 990 shows that executive compensation represents 80% of total expenses. What concern does this raise?

Answer: Excessive compensation may indicate misuse of charitable assets

When compensation dominates expenses, very little funding reaches program beneficiaries, signaling potential mismanagement or self-dealing.

A long-term philanthropic client begins missing scheduled meetings and is slow to respond to communications. The most professional response is to:

Answer: Reach out with genuine concern and offer flexible alternatives for staying connected

A caring, flexible approach acknowledges that life circumstances change and keeps the door open without creating pressure.

Which stage of the policy cycle is most directly informed by program evaluation findings?

Answer: Policy revision and termination

Evaluation findings feed into policy revision or termination decisions by demonstrating whether a program is achieving its goals.

In policy analysis, 'cost-effectiveness analysis' differs from 'cost-benefit analysis' primarily because it:

Answer: Measures outcomes in natural units rather than dollars

Cost-effectiveness analysis compares costs per unit of outcome (e.g., cost per life saved) without monetizing the outcome itself.

What is an essential step in nonprofit impact evaluation?

Answer: Collecting and analyzing program outcome data

An essential step in nonprofit impact evaluation is collecting and analyzing program outcome data. This systematic process helps determine if programs are achieving their intended goals and making a real difference. The data provides evidence of effectiveness, informs program improvements, and demonstrates accountability to donors and stakeholders.

When advising a client on philanthropic legacy planning, which element is most essential to address according to CAP curriculum?

Answer: Articulating the donor's philanthropic identity, values, and vision for impact beyond their lifetime

CAP curriculum prioritizes the articulation of philanthropic identity—who the donor is, what they care about, and what legacy they want to create—as the foundation for all technical planning decisions.

The concept of 'abandonment' in property insurance claims means the insured:

Answer: Surrenders the damaged property to the insurer in exchange for full policy limits

Abandonment occurs when the insured attempts to transfer title of damaged property to the insurer and demand total loss payment; most policies explicitly prohibit this without insurer consent.

What is the AGI deduction limit for a cash gift to a public charity by an individual donor under the standard charitable deduction rules?

Answer: 60% of AGI

Under current law (post-TCJA), cash contributions to public charities by individuals are deductible up to 60% of adjusted gross income.

In estate planning, what does 'step-up in basis' mean for inherited assets?

Answer: The heir's cost basis is reset to the fair market value at the decedent's date of death

Inherited assets receive a stepped-up basis equal to the fair market value on the date of death, eliminating capital gains tax on pre-death appreciation.

A Special Investigations Unit (SIU) is most likely to be activated when a claim exhibits which of the following characteristics?

Answer: Multiple prior claims for the same type of loss within a short period

A pattern of similar prior losses is a classic fraud indicator that triggers SIU referral for deeper investigation beyond routine claim handling.

When investigating a fire loss, which document is typically the first requested to establish the insured's ownership interest in the damaged property?

Answer: Deed or mortgage statement

A deed or mortgage statement confirms the insured's insurable interest in real property, which is a prerequisite to any valid property insurance claim.

An 'absolute return' strategy in endowment investing aims to:

Answer: Generate positive returns regardless of overall market direction

Absolute return strategies seek positive returns in all market environments using diverse, uncorrelated approaches, helping endowments reduce volatility and protect capital during market downturns.

A CAP advisor who receives a referral fee from a charitable organization for recommending clients to that organization should:

Answer: Disclose the fee arrangement fully to the client and consider whether it creates a conflict that compromises the recommendation

Full disclosure of any referral fees or compensation arrangements is required; the advisor must also evaluate whether the conflict can be adequately managed or requires declining the arrangement.

The sociological imagination applied to philanthropic advising means helping donors understand:

Answer: How their personal philanthropic decisions are shaped by and contribute to broader social structures and historical forces

Applied to philanthropy, the sociological imagination helps donors see how their personal wealth and giving impulses are connected to systemic social forces, informing more thoughtful and systemic giving strategies.

A state passes a charitable solicitation law requiring all nonprofits to register before fundraising. This type of policy is primarily designed to:

Answer: Protect donors from fraudulent solicitations

Charitable solicitation registration laws protect the public by ensuring fundraising organizations are legitimate and accountable.