Sample Test Flashcards
In writing about the subject of smart giving, you will often find a distinction drawn between gifts that fund “capacity” and gifts that fund “programs.” Which statement or statements below is (are) correct as to these terms?
I. Gifts to fund capacity go into general infrastructure needed to provide programs
II. Gifts to fund programs go the specific programs that rest on the overall infrastructure
A) I only
B) II only
C) Both I and II
D) Neither I nor II
C) Both I and II
The correct answer is C. Both are correct. You might think of a capacity grant as an investment in general operating expenses, which are necessary if the organization is to keep the lights on. A gift to a program presupposes that the organization has the general operating systems needed to support that specific program. Many naïve funders want to fund only programs, not “overhead.” More sophisticated grantmakers recognize that computers, office space, adequate management, good leadership, and talented staff are not “useless overhead” but the muscles and sinews of the organization, without which no program can be successfully completed.
“In almost any setting the best help we can be is to create the conditions for people to generate their own finest thinking. And when someone is thinking around us, much of the quality of what we are hearing is our effect on them.” So says Nancy Kline. What is the best reading of the statement, “much of the quality of what we are hearing is our effect on them”?
A) Meaning in a thinking environment, created by listening well, is not merely transmitted from one person to another, but emerges newly discovered from the dialogue itself
B) By listening well, we can persuade others of our position and make them think they thought of it themselves
C) By listening well, we can create a space for our position to emerge as logical in the mind of the other.
D) By listening well, we can guide the client or donor to the outcome that follows most efficiently from their vision.
A) Meaning in a thinking environment, created by listening well, is not merely transmitted from one person to another, but emerges newly discovered from the dialogue itself
The correct answer is A. This is what ultimately is meant by dialogue as dia-logos, the play of meaning between minds open to learning what neither yet knows. That kind of open-ended, generative, dialogue is associated with the highest achievements of the liberal arts as well as with meditative and reflective spiritual traditions. These are the sources on which figures like Kline, Palmer, Ganz, Scharmer, Karoff, and Schervish are drawing.
With respect to what the Fithians call “the discernment style,” which statement or statements below is (are) correct?
I. It is oriented to advisor insight
II. It requires the advisor to do more listening than talking
A) I only
B) II only
C) Both I and II
D) Neither I nor II
II. It requires the advisor to do more listening than talking
The correct answer is B. Yes, the discernment style does require that the advisor listen. But what the advisor is listening to is the way the client moves towards an insight. The advisor may ask open-ended questions, but it is up to the client to discover their own own insights, wisdom, and answers. It is the client who achieves the “discernment,” or “Aha.” The interview is oriented to creating a space for the client to think, reflect, imagine. It is the client who supplies the meaning and purpose that emerges, though it might never have emerged without the advisor’s having asked a good question and listened as the client feels their own way through the issues. Such interviews can take considerable time and may proceed by fits and starts across several conversations. Generally, they are best suited to clients who have considerable wealth, where the ultimate payoff for both client and advisor is very high.
“Pull all the levers for social change, not just philanthropy but also government policy, business methods, social organizing, and public relations.” What style of philanthropy is described here?
A) Catalytic
B) Emergent
C) Strategic
D) Grassroots
A) Catalytic
The correct answer is A. Admittedly, the styles of grantmaking do shade into each other, but this is a point-for-point characterization of what is called, “Catalytic Philanthropy.” It can take on challenges as large as those taken on by government, and seeks to achieve a results through the full range of options open to the funder and the funder’s networks, regardless of which ones are tax-deductible. For example, a funder concerned with drug use among teenagers in a given community might decide that the most effective intervention is vivid advertisements that drive home the damage done by drugs. That campaign might be funded directly from the donor’s own pocket, rather than being run through a charity. The donor may be asking not about the deduction, but whether, all things considered, they are making the biggest possible difference for the money. Or they could decide that it is government policy that drives change, and make political contributions to those who support the donor’s preferred policies. Or the donor might fund an organizer to pull together parents, teachers, government officials, local and national foundations, and the the media to catalyze public opinion and get a critical mass of resources working on the problem.
All of the following are part of what Renata Rafferty means by “doing due diligence” on a gift or grant, EXCEPT
A) Reviewing the grant or gift proposal
B) Interviewing board and staff
C) Conducting a site visit
D) Meeting with financial advisors, to see if the gift is affordable
D) Meeting with financial advisors, to see if the gift is affordable
The correct answer is D. The field of “philanthropy” is like an ecosystem of many fields. In the part of the field that Renata Rafferty is discussing, the donor probably has a foundation or big donor-advised fund. The financial planning issues have already been resolved. Now, the funder has a fund already set aside for giving. Due diligence is needed to make sure the gift or grant goes to work in the right charity, in the right way, for the right reasons, to get impact. Due diligence is like what an angel investor does before investing in a company.
What is the best example of “whale spotting,” as David Solie calls it?
A) Jack, an advisor, can quickly see, as he walks through the nursing home, that Marie, though frail, is a person of significant wealth.
B) Bill, scanning a database of donors, spots Marie as a potentially significant bequest prospect.
C) Gordy listens without speaking, as Marie’s conversation about her childhood trails off into an extended pause.
D) Harry takes Marie’s financial data and discovers she is an heir to a significant fortune.
C) Gordy listens without speaking, as Marie’s conversation about her childhood trails off into an extended pause.
The correct answer is C. Whale spotting is like scanning a glassy sea, where little seems to be happening. Then, suddenly, the whale breaks the surface. What David is describing in his own words is that same experience that Parker Palmer, Nancy Kline, the Fithians, and Otto Sharmer all describe in their own way. You could call it a “Quaker silence,” in which nothing is said until the spirit moves. And when it does, that moment of clarity changes everything. “A moment’s surrender which an age of prudence can never retract,” was T.S. Eliot’s way of saying it. “Speech after long silence, it is right,” was how Yeats alluded to it. Holding that silence is a learned skill, and a courtesy. To do it, we must be comfortable with ourselves and be able to still our own thoughts, so Carl Rogers taught. We must also, he said, be comfortable with how “strange” the inner life of the other may be. When the spirit speaks, it may speak in a language drawn from texts and traditions unfamiliar to us. It may come from the land of dreams, in dream logic. In the presence of that strangeness, the proper attitude is that of one listening to a distant singer when the words are indistinct. The client, as we hear or half overhear their words, may stand revealed as having an inner life richer than we could ever have imagined, richer, perhaps, than our own. Such moments are “private” as art is, and public as art is. That is Peter Karoff’s insight. The private expressed in this planning context may inspire a philanthropic gesture, what David Solie calls an “organic legacy,” as personal as a lyric poem, yet also public and representative of our shared humanity. And it may be transpersonal, as poetry, myth, and scripture are. That is, the voice speaking in and through the client or donor calls us to community. We say to ourselves they they are speaking not just to me but for me, for us, for us as a community. In these rare moments of inspiration, the heart rises, and the light dawning within the client is unforgettable, this coming to clarity. Once the client has experienced this, the rest is just “planning,” in what William Wordsworth called “the light of common day.” How often have our donors and clients died, with that inspiration buried within them, for want of a moment on our part of respectful attention, and silence?
Bill has found his “through line” as an advisor to a family with complex needs and complex family dynamics. Which statement or statements below reflect(s) his new found direction?
I. He feels a connection to the heart and soul of the family
II. He understands how best to gain the family as a client
A) I only
B) II only
C) Both I and II
D) Neither I nor II
A) I only
A) is correct. The through line is a term taught to actors. They are told to find their through line in a scene to connect emotionally with the dramatic situation and with their audience. Given that family is all about “drama” terms from drama make a great deal of sense. We are actors in a family scene. We had better find our through line.
“Do nothing about us,” says a nonprofit leader in a local community, “without us! Let go of both money and power. Let us address our own challenges. We know best what needs to be done.” Which grant-making style is most responsive to this perspective?
A) Strategic
B) Catalytic
C) Adaptive
D) Trust-based
D) Trust-based
D) Trust based is the right answer. Another right answer (had it be given in the question) could have been community centered or participatory. The other styles listed in this question are all funder-driven or top down. They all implicitly assume that funders know best and the nonprofits are instrumentalities of the funder’s vision, theory of change, and strategies.
The Fithians use a financial pyramid in explaining legacy to clients. It has three levels. What is the lowest level on the Fithian pyramid?
A) Meeting subsistence needs
B) Meeting needs of heirs
C) Checkbook giving
D) Financial independence
D) Financial independence
The correct answer is D. Financial independence is the lowest level. This is the level we work on as planners, when we do a lifetime cash flow analysis to show the clients that they will always have enough for themselves. The second level is Family Legacy. At death, some or all of the assets will pass to children or to other heirs. That amount is the Family Legacy. Then, there may be money left over that goes to charity. That is the Social Capital Legacy. For very wealthy families, the Social Capital Legacy may also include estate taxes. That is, if the parents die with a huge estate, some will go to do social good through government, unless those dollars are redirected by the parents to charity instead. The basic idea is that first we plan for having enough for us, then for our heirs, then either we give it away (voluntary social capital) or the government takes it away (involuntary social capital, via taxes).
“The Journey” – all the ways of knowing below often invoke the metaphor of the journey, EXCEPT
A) Accounting
B) Mythology
C) Literature
D) Scripture
A) Accounting
The correct answer is A. Accountants, financial planners, tax professionals often have people as clients, and to us as humans, life does present itself as a journey of self becoming over time. Fairy tales, myth, literature, scripture, and popular movies (see Thelma and Louise) all treat us as travelers from then to now, to an uncertain future. In that journey, we meet adventures, adversity, and opportunities to express ourselves, overcome ourselves, and become ourselves. Do financial people know this? Of course. But have we learned how to plan for it, sell to it, build into our work? Not so much. It is an opportunity for us, as advisors, to combine, as Peter Karoff might say, “The Poetry and Practice of Philanthropy” or, as he says, “to elevate the discourse,” so that clients see us as helping them along their journey, not just to the palace of wealth but even to what William Blake once called, “The Palace of Wisdom.” Maybe that comes into the role, sometimes, of the most trusted advisor. And the accountant, or any professional, can rise to it, if we can master our core discipline,while also bringing our own humanity, our own moral imagination, to the planning table. Some can; some can’t. Some will; some won’t. That makes it a competitive advantage.
“Whose money is it?” That question about money inside a family foundation is raised by The National Center for Family Philanthropy. Which statement or statements below draw out the meaning of this question?
I. The foundation is established by law to serve the public interest; in that sense, the money belongs to the public.
II. The money belongs to the foundation itself, under the stewardship of trustees who have legal oversight.
A) I only
B) II only
C) Both I and II
D) Neither I nor II
C) Both I and II
The correct answer is C. Both are correct. NCFP is making clear that it may be a family’s foundation, but once it is established as a foundation, the money it holds no longer belongs to the family. Family members may sit on the board or on the grants committee, and the family may name the foundation after itself, but the foundation should think beyond itself to the needs of the community. In fact, the trustees of the foundation are required by law to use the money for public purposes, as laid out in its founding documents.
All of these are aspects of “the advice style”, or expert style, in accordance with the Fithians’ views, EXCEPT
A) Those using this style are team-oriented
B) Those using this style are planning-oriented
C) Those using this style present options
D) Those using this style elicit the highest aspirations of the client
D) Those using this style elicit the highest aspirations of the client
The correct answer is D. Experts like to show us how much they know. They are experts, after all! The client should be silent when the expert speaks. The expert fills the client’s empty mental bucket. That is the view of the “expert style” that the Fithians take. They contrast it with the “discernment” style, which is oriented to client insight, and might be called inspiring. Very likely they were influenced in their view of discernment by Dr. Paul Schervish. A fine Socratic teacher, like Paul Schervish, prides himself not on filling the empty minds of students, but on eliciting their own best thoughts.
Which statement or statements below is (are) true of the “virtual team,” as the Fithians call it?
I. meets most often in cyberspace
II. is a team, including, but going beyond, the core team, put together for a period of time to address specific issues
A) I only
B) II only
C) Both I and II
D) Neither I nor II
B) II only
The correct answer is B. The virtual team is put together to include, but go beyond, the core team when special expertise is needed. It may meet face-to-face. It just does not stay together for the long haul, as does the core team.
When estates transition, according to Williams and Preisser, how often does the advisor retain the assets under management?
A) 1-2%
B) 5-10%
C) 20-30%
D) 30-40%
B) 5-10%
The correct answer is B. Asset attrition is big reason that cross-generational planning is becoming a significant topic in advisory circles. Unless the heirs are prepared, and unless they are actively engaged prior to the getting their inheritance, they are very likely (90-95% of the time) to find another advisor.
You are discussing an older donor with a colleague. Your colleague says, “My word, if you ask the donor an ‘above-the-line’ question, all you’ll get are irrelevant stories, digressions, and tangents.” Which statement below best reflects what this course teaches?
A) Older people do digress, and planners must constantly use closed-ended questioning skills to remind them of the task at hand.
B) Older people are likely to lose track of where they are in an “above-the-line” conversation, and the planner should provide them with structure through a form to fill out.
C) Older donors are often confused; it is best to avoid asking them large open-ended questions.
D) An older donor may seem to be “off on a tangent” with a story or reminiscence, but sometimes the meaning will emerge dramatically, if the gift planner simply listens without impatience.
D) An older donor may seem to be “off on a tangent” with a story or reminiscence, but sometimes the meaning will emerge dramatically, if the gift planner simply listens without impatience.
The correct answer is D. David Solie says that working with elders, to discern their purpose, is like “whale spotting.” The elder may talk this way and that. It may seem , on the surface, there is little going on. The anecdotes and reminiscences may seem to the busy gift planner to be irrelevant to the work at hand. But in fact, the donor’s own insight, his or her “discernment,” or “Aha,” may suddenly emerge like the whale breaking the surface of the sea from an unexpected direction. Fact-oriented advisors do not always do well with rambling donor stories, and if we expect “values” and “vision” to arrive like the well-made paragraphs in a corporate business plan, we will have a hard time working with elders. Very often with the older client, the meaning, values, vision are like the meaning of story, clear only when the story has found its proper ending. Listening for the shape of the story, its emerging meaning, and the end towards which it tends is a different kind of attention. In a way, the donor, when asked a large “above-the-line question,” may be engaging in “life review,” writing and rewriting their life story, with the hope that it will all come out even. Such conversations can be highly conducive to a gift, since a gift may be the right way for that story to end and for what the client cherishes to live on after them. But the client has to arrive at the imagined end in their own way, and there may be twists, and turns, and tangents, as the client gets their straight, to their own satisfaction. The “whale” that emerges may startle both client and advisor. That is what a true discernment conversation feels like when it is successful.
In the “new me” introduction, all of these are included, EXCEPT
A) How I used to be
B) What I do now and why
C) The benefits of my approach
D) The transforming event
C) The benefits of my approach
C) The benefits do not necessarily have to be stated. The story itself positions the advisor. How I was, what happened that transformed me, and how I work now - that is the structure. For example, “I used to work with very wealthy families and helped them pass their wealth without tax. I did that for one family whose sole heir inherited $100 million and drank himself to death in 12 months. Ever since I have led with people first and possessions second.”
The Four Quadrant approach to planning is based on
l Discovery, Creative Solutions, Strategy Deployment and Results Management
ll Fact Finding, Selling the necessary products, Implementing and Compliance Reviews
A) I only
B) II only
C) Both I and II
D) Neither I nor II
A) I only
Discovery, Creative Solutions, Strategy Deployment and Results Management
The lyrical or passionate style of writing about philanthropy, as demonstrated by H. Peter Karoff, is best described (within the viewpoint taken throughout this course) as:
A) Inappropriate for an advisor
B) Touchy-feely, soft, fuzzy
C) Unprofessional in a business setting
D) Appropriate for engaging donors in an above-the-line conversation about their own passions, ends in view, or aspirations
D) Appropriate for engaging donors in an above-the-line conversation about their own passions, ends in view, or aspirations
The correct answer is D. The course is meant to question or even change existing attitudes among professionals who discount or disparage the style of the liberal arts, or the humanities, or just being human, when it surfaces in conversations with donors and clients about the ends in view. Karoff is a good example of an advisor who combines “head and heart,” or reason and passion, or the moral dimension and the strategic dimensions, in his philanthropic planning.
What percentage of Americans give annually to charity?
A) 5-10%
B) 20-25%
C) 40-50%
D) 70-80%
D) 70-80%
Yes, 70-80% give annually. Interestingly, though, only 5-7% give at death. Why the dropoff? Could it be that we as advisors are chilling the conversation?
Peter Karoff, poet, former life insurance agent, founder of a philanthropic planning company, and advisor to some of the world’s biggest donors, believes which statement or statement below is (are) true?
I. the best philanthropy is noble in intention
II. the best philanthropy makes every effort to get results
A) I only
B) II only
C) Both I and II
D) Neither I nor II
C) Both I and II
The correct answer is C. Both are true. Peter has many good things to say about “strategic philanthropy,” or philanthropy that gets results. If you asked him about the book, Give Smart, he would say many good things. He values strategic giving; in fact, he began using that term decades ago. But what makes Peter special, what makes him a figure of major importance in the field, is his commitment to the poetry of philanthropy as well as to the results, to head and heart - like the CAP symbol.
Discernment Style versus Expert Style - which statement or statements below is (are) true, as taught by the Fithians?
I. Discernment is oriented to client insight
II. Expertise is oriented to insight of the advisor
A) I only
B) II only
C) Both I and II
D) Neither I nor II
C) Both I and II
The correct answer is C. The point being made is profound. As experts, advisors are concerned that the client understand how much the advisor knows about the “how” of it all - the tools and techniques needed to address client gaps, challenges, problems, and opportunities. In discernment, however, the focus is on the client arriving at their own insights into the “why” of it all, the meaning, purpose and direction of the client’s own life, and the solution of what are often, actually, moral dilemmas, or quandaries, not just problems to be solved by an expert. (“How much is enough for a child?” “Is fair always equal?” “Should I pursue what is best for me, even if a spouse or child must suffer?”) Such questions must often be answered by the client prior to getting into the “how” of it all. To help the client achieve clarity is an art. Those in this course who clearly have mastered that art include the Fithians, Peter Karoff, Tracy Gary, David Solie, Carl Rogers, Paul Schervish, H. King McGlaughon, Charles Collier, Parker Palmer, and Nancy Kline. Essentially, discernment requires the ability to ask the right larger questions, and then to create a space for the client to reflect, as the advisor listens, actively. Discernment - helping others find themselves and their own sense of direction, is among the highest uses of the skills taught in the liberal arts.
In the terminology of the Fithians, with regard to sales style, which statement or statements below is (are) correct?
I. The discernment style is associated with credibility
II. The expert style is associated with wisdom
A) I only
B) II only
C) Both I and II
D) Neither I nor II
D) Neither I nor II
The correct answer is D. Neither is correct. Think of it this way: salespeople often feel they lack credibility with clients, so a salesperson or a gift solicitor may, through hard study and considerable experience, grow into being a true expert, perhaps with a credential in finance. At that point, the person, perceived as an expert, is more credible. But the point the Fithians are making is that there is a status beyond expert, beyond credibility, even beyond merely being trusted. That higher level is discernment, and at that level, the advisor become the most trusted confidante of the donor or client and is valued not for expertise only, but also for wisdom, which transcends expertise and may encompass and guide the expertise of other, more narrow experts at the planning table.
Bob Buford highlights the sigmoidal (overlapping) S-curves to make a number of points. In his own case, the overlapping S-curves reflect what important decision or decisions he made?
I. Stay active in the business world, while exploring more meaningful options
II. Hold on to the business for a period of time as a wealth generator to have it fund philanthropic work
A) I only
B) II only
C) Both I and II
D) Neither I nor II
C) Both I and II
The correct answer is C. Both are true. Bob’s decisions may be of interest to certain of your clients or donors. Many people feel that choices as to “stay in the old rut” or “make a break for it” are either/or. A sensible approach, though, is to stick with the old while testing the new. And it may even be sensible to remain with the old life for a long time, in part to fund the new, more meaningful work. If you look around, you will see many others who choose to “downshift” into civic life, or a more balanced life, while staying involved in business, rather than make an abrupt change.
In the Burns case, and others like it, where should the advisor start?
A) Asking who this family is, where they are now, and what they are hoping to become
B) Taking an inventory of assets and liabilities
C) Reviewing current planning arrangements
D) Providing solutions to the most urgent financial challenges
A) Asking who this family is, where they are now, and what they are hoping to become
A) Once again, as throughout this course, the point is that we begin with the human dimension not the financial or tactical or below the line issues. We begin by getting to know the family as human beings and what may help them thrive by their own definition of long term success.
Financial Skills based trusts are concerned which of the following provisions
I Incentive based provisions
II Basic Financial Skills provisions
A) I only
B) II only
C) Both I and II
D) Neither I nor II
B) II only
B) Skills as the name would imply.
With respect to Peter Karoff’s view of philanthropy, which statement or statements below is (are) true?
I. Philanthropy, no less than poetry, should be inspired
II. Philanthropy, no less than business, should be strategic
A) I only
B) II only
C) Both I and II
D) Neither I nor II
C) Both I and II
The correct answer is C. Both are true. Peter is a role model for CAPs in that he understands the importance of both “heart” and “head.” He was one of the first to call for “strategic philanthropy,” and he does expect givers to get results, but he also calls for philanthropy to be like poetry: heartfelt, impassioned, creative.
In which listening style, in Otto Scharma’s terminology, do we listen simply to confirm what we already know?
A) Downloading
B) Factual
C) Empathetic
D) Generative
A) Downloading
The correct answer is A. When we listen in downloading mode, we are saying, internally, “Yes, of course. Nothing new here.” Factual listening leads to our saying, “I see, new information here.” Empathetic listening is listening to enter into the feelings, mood, or mindset of the other. In generative listening, something utterly new emerges as if out of the space between client and advisor. Out of the silence comes for the client a new insight, self-generated, that would not have been possible without the active attention of the advisor. That is what the Fithians, following Schervish (who himself was following the meditation exercises recommended by St. Ignatius Loyola) call discernment. In discernment, it is as if the one discerning hears a voice, an inner teacher, as Parker Palmer calls it. Inspiration is Tracy Gary’s way of saying it.
Which statement or statements below is (are) true of the CAP symbol?
I. Was stamped on pieces of silver by Sallie Wallace’s father
II. Bill earned the CAP and was “pinned” by Sallie at an American College Board meeting
A) I only
B) II only
C) Both I and II
D) Neither I nor II
C) Both I and II
The correct answer is C. Both are true. The question helps you tell the CAP story. There is real love and passion behind our credential. Bill was in his eighties when he studied and earned his designation, as you will. It was a proud moment when Bill, who served for decades on the College’s Board, and who had chaired the Board, stood before his peers and was pinned by Sallie with a symbol that means craft and love. We are fortunate to have a symbol with a story that is true, inspiring, and heartfelt.
Which profession’s ethical code prohibits members of that profession from representing an entire family, particularly one with internal conflicts?
A) Family therapy
B) Law
C) CAP
D) Investment Advisor
B) Law
A) Law. Bar canons prohibit representing potentially adverse parties. Forms can be signed to mitigate this with a loving couple, but very difficult to mitigate it with an entire complex family system spanning generations. This has led Jay Hughes to give up the practice of law.
What is the best definition of a “capacity grant”?
A) A grant to build infrastructure, staff, and systems to enable a nonprofit to do its work
B) A grant to fund specific high-capacity programs
C) A grant at the donor’s capacity to give
D) A grant that absorbs the nonprofit’s capacity to perform a given function
A) A grant to build infrastructure, staff, and systems to enable a nonprofit to do its work
The correct answer is A. A capacity grant is contrasted with a grant for programs. A capacity grant is like an investment in the capacity of the charity to operate at all. It is sometimes disparaged as being a gift to cover overhead, but it is best seen as an investment needed to keep the organization going, a grant that creates the capacity to carry out programs which, in turn, might be funded by program grants.
“Philanthropy,” as Peter Karoff has said, “is private money for public purposes.” When it comes to a private foundation making grants for the public good, which party or parties decide(s) what is and is not a public good?
I. The public
II. The private foundation
A) I only
B) II only
C) Both I and II
D) Neither I nor II
II. The private foundation
The correct answer is B. This is the power and the paradox of private foundations. They let private money work towards what the foundation deems to be the public good, within very broad limits. The general public does not get a vote. If you look back at the history of private foundations, this paradox was much debated when the enabling legislation was passed enabling them in the days of Carnegie, Rockefeller, and Ford. Some legislators feared the creation of very wealthy foundations that could have a significant impact on the country and the world while not being accountable to the public. These same concerns are now being raised by books like Winners Take All and The Givers. Recognizing the possibility that concentrated philanthropic power can work in ways contrary to public purposes, this course cites the wisest of remarks by H. Peter Karoff: “No good deed goes unpunished.” Rather than complaining about what a particular foundation has done or failed to do, he might well ask, “So what about you? What are you doing in your own giving? Your own volunteering? Your own community building? Your own board service?”
Which person or persons below is suffering from “success panic,” as Bob Buford uses that phrase?
I. Hugo had great promise as a pianist; now, in mid-life, he feels panic that he has never fulfilled his potential.
II. Leanne, at 41, has risen to be President and CEO of a Fortune 100 company. One day, going up in the executive elevator, floor after floor, she panics, wondering what she has done with her life.
A) I only
B) II only
C) Both I and II
D) Neither I nor II
II. Leanne, at 41, has risen to be President and CEO of a Fortune 100 company. One day, going up in the executive elevator, floor after floor, she panics, wondering what she has done with her life.
The correct answer is B. Success panic for Bob means panicking when you realize that the success you spent your life achieving was not worth the price paid for it. “I am successful, as the world measures success, so what? What have I done with my life?” As advisors we help our clients be successful…… What about those who are like Bob or the woman in the elevator? What can we do for them?
In a best of breed advisory team for high wealth families, this course makes the point that a particular role is needed but often absent. What role is that?
A) Life Coach
B) Life Insurance Professional
C) Attorney
D) Project Manager
D) Project Manager
D) In the absence of a project manager, the team may never decide who will do what when. Without a project manager things don’t get done, or don’t get done in the right order. This is hard because the players on the team do not work for each other and do not work under a common employer. Who then will step in and manage the team?
As Bob Buford describes his own life, what did he experience as “success panic”?
A) Starting out, getting married, and realizing that unless he succeeded, he would not put food on the table for himself and those he loved.
B) Achieving great financial success and then, in mid-life, being overwhelmed by the sense that he had become enslaved to “the thrill of the kill” and “the art of the deal.”
C) Reaching pre-retirement and realizing that his highest dreams had not been enacted, and that time was running out.
D) Looking back in older age, realizing that he had achieved success as a business person, but had never achieved his full potential as human being.
B) Achieving great financial success and then, in mid-life, being overwhelmed by the sense that he had become enslaved to “the thrill of the kill” and “the art of the deal.”
The correct answer is B. Half Time, as the title implies, is the book of a man who has undergone a mid-life crisis, one that was like a new birth, “from success to significance.”
Among the principles of grassroots giving are which of these?
I. Manage process, and measure outcomes
II. Move quickly, and eliminate paperwork
A) I only
B) II only
C) Both I and II
D) Neither I nor II
B) II only
The correct answer is B. Grassroots philanthropy differs from strategic philanthropy in certain key respects. In the grassroots model, the funder is actively and personally involved in meeting face-to-face with grant recipients and makes decisions quickly, relying on the charity and its leadership to make good use of the money. This is “philanthropy by walking around.” Grassroots philanthropy does not want to impose the funder’s methods on the charity. It does not want to tie the charity up in paperwork. It is often small-scale, local, and neighborly. In contrast, strategic philanthropy fits well with large foundations, making significant grants, competitively, at a distance from the recipient, relying on well reasoned grant requests, a theory of change, and ongoing reports as to results.
As taught in CAP, what would a good discovery/agreement interview accomplish?
I Gift planner and donor/client become clear as to relevant facts.
II Gift planner and donor/client become clear as to goals.
A) I only
B) II only
C) Both I and II
D) Neither I nor II
C) Both I and II
The correct answer is C. A gift planner working for a nonprofit may not get “all the facts,” but working with advisors they can participate in a process in which all the relevant facts and goals are elicited and addressed in a balanced and effective way.
With respect to Todd Fithian’s “Most Trusted Advisor Model,” which statement or statements below is (are) true?
I. The Most Trusted Advisor has direct access to the client
II. The Most Trusted Advisor often convenes and runs the planning team in the absence of the client
A) I only
B) II only
C) Both I and II
D) Neither I nor II
C) Both I and II
The correct answer is C. Both are true. At times, the most trusted advisor may simply be present, at the client’s side, with the planning team at the table. At other times, however, the most trusted advisor shields the client from direct access to the other advisors, acting as gatekeeper. The Most Trusted Advisor may meet with the team, or with sub-teams, in order to pull the plan together for the client’s consideration. This process can save the client time and can work to create a unified plan. But clearly only a highly trusted advisor can be trusted to act like this, almost like the client’s proxy, or chief of staff, in pulling all the pieces together for the client’s ultimate consideration and approval.
The denominator of the Trust Equation™ is Self-Orientation. All of these opening questions demonstrate high Self-Orientation, EXCEPT
A) Let me show you an opportunity we are making available only to our highest-level donors…..
B) When was the last time you had your life insurance program reviewed?
C) Our analysts feel that now is an historic opportunity to buy high-yield Chinese bonds.
D) What must be done today to make this a successful meeting from your perspective?
D) What must be done today to make this a successful meeting from your perspective?
The correct answer is D. Clearly, only the last begins with what the client has in mind. All the others start with what the professional wants, needs, or hopes to accomplish. The other three are like gambits, or bait. The donor or client may feel as if they are being set up, processed, handled, sold, or even used. Such processes are proven to work - up to a point. But trust is low. Trust requires that the client or donor feel that the professional is oriented to them, not to the professional’s own agenda. This can be very difficult for a professional to do, given how the professional is hired, trained, and incentivised. For some organizations, discernment or even consulting is considered the long way around and to be discouraged. Discernment-style interviews sometimes feel like an act of subversion. We are stepping, as human beings, out of our roles as butcher, baker, candlestick maker, attorney, CPA, investment advisor, insurance agent, or gift-planner, and treating the other as an end in himself or herself. That, too, can pay off, but it runs the risk of taking too long, getting off track, or even becoming a sales gambit in its own right. The expert-consultative style strikes a middle ground. We extend ourselves towards the donor or client, with a good open question, but also with one foot clearly planted in our own professional role.
In the terminology of grantmaking, which issue or issues below would be characterized as a “wicked problem”?
I. Malaria
II. Violence in the Middle East
A) I only
B) II only
C) Both I and II
D) Neither I nor II
II. Violence in the Middle East
The correct answer is B. A “wicked problem” is one that results from so many interconnected factors that it is very difficult to decide how best to “cure” the problem. Global poverty, climate change, terrorism, wars in the Middle East, the drug trade, are examples. Other problems, like malaria, are complicated, but have clear solutions, such as malaria nets or a vaccine. Others are relatively simple, like providing shelter for families displaced by a tornado. Others are complex, with many factors, but like a knot that could be untied. Teenage pregnancy might be an example. The point of calling a problem “wicked” is to draw attention to just how hard it is even to know where to begin. Whatever we attempt may produce unforeseen consequences that could make the problem worse.
Marie wants to fund “programs” rather than “capacity” at her local hospital. Which gift opportunity or opportunities would be well-suited to her?
I. Gift to the general fund at the hospital
II. Gift to maintain the hospital building
A) I only
B) II only
C) Both I and II
D) Neither I nor II
D) Neither I nor II
The correct answer is D. Neither suits her preferences. She does not want to invest in the general overhead or upkeep of the organization. She wants her dollars earmarked for particular programs and projects.
According to the Fithians, which sales style is most closely associated with “commodities”?
A) Sales
B) Planning
C) Expert advice
D) Discernment
A) Sales
The correct answer is A. The point being made is that sales is all about not only selling commodities but becoming a commodity yourself. Sales and, increasingly, expertise and advice and planning are becoming commodified. That is, every town is full of people who can give expert advice on tax and finance and construct some kind of plan. But how many can listen a client into clarity about the meaning and purpose of the project, the life, the fate of the family, and the community of which it is a part? The last thing to be commodified will be, well, things of the spirit. In that respect, the market advantage may lie with those nonprofits which were formed expressly to cultivate, foster, and preserve these higher forms of life.
Helga has given away 3-5% of her modest income for 25 years. She recently inherited several hundred thousand dollars and wishes to devote $25,000 to giving. She decides it is time to get organized. What is her next step up on the philanthropic learning curve, as Peter Karoff calls it?
A) Become a learner
B) Get gifts leveraged
C) Become issues- and results-oriented
D) Align vision, passion, and interests so that giving is one of the most fulfilling things she does
A) Become a learner
The correct answer is A. Her next step, having decided to get organized, is to become a learner. The steps on the curve, as Peter sees it, from his considerable experience, go like this: 1) Become a donor, 2) Decide to get organized, 3) Become a learner, 4) Become issues- and results-oriented, 5) Leverage the gifts, and 6) Align vision, passion, and interests, so that giving becomes one of the most fulfilling and exciting things you do.
Bo gives every year to her college. She gives this no thought. Which statement or statements below is (are) correct?
I. Her giving, in the wording of Tracy Gary, is an “honored obligation”
II. In the terminology of Ellen Remmer, she is giving charity
A) I only
B) II only
C) Both I and II
D) Neither I nor II
A) I only
The correct answer is A. Yes, this is an “honored obligation.” What a fine way to say it! It could also be called faithful giving, or checkbook giving, or giving as paying dues. To fundraisers, it is an unrestricted annual gift which is the lifeblood of any organization. From Ellen Remmer’s perspective, it is what she calls “responsive philanthropy,” or giving when asked. Giving charity, in her language, is giving from the heart spontaneously when touched by a need, like giving a coat to a homeless person or responding to an appeal after a disaster. (To remember this, think “caritas” - love from the heart - is the root word for charity.)
Financial Skills Trusts encourage which behavior or behaviors:
I. Learning to save
II. Identifying personal passion in life
A) I only
B) II only
C) Both I and II
D) Neither I nor II
I. Learning to save
A) I only
A) is correct. As the name implies these trusts encourage good financial skills like saving, managing personal debt, and living within a budget. They do not teach skills like finding a personal passion.
Per a survey by US Trust cited in this course, which of the statements below is (are) true?
I. The biggest reason that high net worth clients say that they do not give more to charity is that they do not feel connected to the charity
II. The biggest reason that advisors think their clients do not give more to charity is that the clients fear not having enough for themselves.
A) I only
B) II only
C) Both I and II
D) Neither I nor II
C) Both I and II
The correct answer is C. Both statements are true. This is one of several “advisor donor disconnects” documented in the study. Generally, advisors believe that clients are more concerned than they actually are about the financial impact of the gift on the donor and the donor’s family. Tax issues, too, loom larger in advisor minds than in the minds of donors. Generally, donors are mainly concerned about whether their gift will be used wisely by the charity; they want to know more about the charities they give to and want to feel more connected to them; and they are concerned that if they give, then they will be solicited again and again.
In discernment, we listen for client narrative – who they are, where they have been, where they are going. What is the phrase that Collier uses for that sort of narrative?
A) Hero’s Journey
B) Pilgrim’s Progress
C) Midsummer’s Night’s Dream
D) Day of the Dead
A) Hero’s Journey
The correct answer is A. Collier is drawing on figures like Jung and Joseph Campbell. The idea, which, if we are honest, most of us will own up to, is that we see our lives not as mere processions of events but as a narrative of which we are the hero, overcoming obstacles, bouncing back from defeat, reaching new levels of self-understanding, undertaking and completing difficult ordeals, winning likes and followers, becoming stars, going on quests against long odds, winning the damsel, or wedding the prince. The stories we tell ourselves to make sense of our lives change as we grow up, reach maturity, hit the midlife crisis, enter old age, or face the end of our days. We outgrow some delusions and grow into others. We feed our hearts, as Yeats once said, “with fantasy.” And, he added, “the heart’s grown brutal on the fare.” Literature, philosophy, psychology, scripture, history, folklore, political oratory, and now marketing and brands give us the stories by which we form our identities as individuals, families, communities. Many in this course are making similar points. Karoff, a poet, sees philanthropy as partly what he calls (in an article not assigned in this course) “the inner journey.” Paul Schervish is quite clear that self-understanding is had through stories of genesis and telesis, or a gospel of wealth, or spiritual autobiography. David Solie emphasizes the “grand retrospective” in which elders look back and attempt to make sense of their lives. When your mind wanders, where does it go, but to a story in which you figure as hero? Yet, in our planning with clients, we pretend that the object of the exercise can be reduced to facts and figures. The currency of the self is story. The getting of money is but one plot line. More than money must hold a family, community, or nation together. That is the story. How does it end?
Which of these clients is well positioned to work with a philanthropic advisor whose sole focus is on effective grantmaking?
A) Jack has a farm and wants to sell it with minimal income tax. He wants to reduce or eliminate transfer tax. And he would like to do something good for his alma mater one day.
B) Jill inherited a seat on her family’s foundation board. They grant out $1 million a year.
C) Talley is 91 and has no heirs. She is a loyal giver to a museum.
D) Belinda has limited income but tithes to her house of worship
B) Jill inherited a seat on her family’s foundation board. They grant out $1 million a year.
The correct answer is B. Most of the clients for CAP advisors and CAP fundraisers are not in need of dedicated grantmaking advice. They need a general orientation that a CAP can provide, or a Community Foundation might provide, but they do not need, nor will they pay for, a complete, fee-based engagement to cover grantmaking alone. That is the turf of firms like Bridgespan and advisors like Tom Tierney. We can learn from Give Smart and other sophisticated books on grantmaking, and can pass them on to those transitioning from “success to significance,” but few of us will make our living as dedicated consultants to grantmakers.
An advisor who has taken to heart the teachings of the Fithians will adopt which approach or approaches below?
I. Use discernment style with every prospect, from all wealth levels
II. Use expert style with highest-level clients (the wealthiest and those who have the most complex situations)
A) I only
B) II only
C) Both I and II
D) Neither I nor II
D) Neither I nor II
The correct answer is D. The Fithians, and the course author, are determined to say that there is no one right way to be successful. Some succeed at sales, some at being experts, and some through discernment. But there are certain mis-matches. To use the discernment style, which can take hours, days, years, with a prospect who has a simple situation and no money is a mismatch. It is a very good way to go broke. On the other hand, to drive a sales style or even an expert style into a complex client situation, where what is most at issue is the very purpose of the engagement, is to force the client to accept a solution before the client even knows what the they are trying to accomplish. Discernment is rare. And it can distinguish the mere expert from a wise counselor or trusted advisor. But those who use this style must make sure the situation is right. Generally, the more complex the situation and the higher the client’s capacity to pay fees or generate large transactions, the more sense it makes to adopt the discerning approach. Even then, it may be the sales persons and the experts who make the biggest money. The discerning one may move the case to closure, but it is not a bad idea to position your products and services in the processes so that you are the one who also gets the sale, the planning fees, or the gift.
In making recommendations as to whether or not a CRT is appropriate, a CPA has all these advantages over a nonprofit gift planner, EXCEPT
A) CPA has access to the client’s financial statements
B) CPA is a high-level expert in tax
C) CPA can run financial scenarios, showing how the CRT would affect the client’s cash flow, income tax, and estate tax as a part of an ensemble of tools that might be used
D) CPA can connect the donor’s heart through the plan to the charity’s mission and through the charity to impact on a cause that matters to the client
D) CPA can connect the donor’s heart through the plan to the charity’s mission and through the charity to impact on a cause that matters to the client
The correct answer is D. Clearly, the CPA is less capable of connecting to impact than is the nonprofit person. In general, the advantage that nonprofit gift planners have over the “technicians” and the “experts” is in delivering impact in line with donor intentions, ideals, and passions. Yet, it is also true that many planned giving officers lead with the technical, then, sadly, get sideways with the CPA or other tax expert who feels that the planned giving person is pitching a tool without an objective analysis of how the tool functions in the client’s overall financial statements.
Renata Rafferty discusses “due diligence” in making grants and gifts. All of these are techniques she discusses, EXCEPT
A) Analysis of public documents, including mission statement, programs and services, and financial statements
B) Site visit, to see the programs in action and meet staff
C) Meet with leadership, including executive director and board members.
D) Meet with tax, legal, and financial advisors to structure the gift
D) Meet with tax, legal, and financial advisors to structure the gift
The correct answer is D. Renata’s due diligence, like the work done by Tom Tierney’s staff at Bridgespan, is focused on evaluating the charity in light of the funder’s goals. Such due diligence is not focused donor finance. Due diligence, of the kind Renata conducts, is often performed by grant-making entities, particularly foundations, sometimes with paid staff. Sometimes consultants like Renata, Tracy Gary, TPI, or Bridgespan are hired to help the grantmakers make better grants. The focus in this realm is on making the best use of the dollars going from the grantmaker (sometimes a staffed foundation) to the grantee charity.
Financial advisors who take CAP are, by contrast, most often working with people who have wealth but who are low on the philanthropic learning curve. They are not yet giving big. They are not yet giving within a purposeful, well considered plan for achieving impact. For the advisors and for these clients, philanthropy is still primarily a category of personal finance, and is all about structuring the gift within the financial, estate, or business exit plan. As clients climb the curve and devote more and more time and money to it, due diligence, systematic charity selection, and getting results become more important.
CAP encourages advisors and their clients to think beyond the structure of the gift to its impact, and to see that some thought and due diligence has to go into that, if the money is to be used to best advantage.
CAP also encourages gift consultants like Renata, whose focus in on due diligence and charity selection, to recognize that that for many donors, it is only possible to release significant dollars if their finances are properly planned first.
Community Foundation CAPs will “get” what Renata recommends, because often Community Foundations conduct such due diligence for the CF’s own grants, and also encourage their donor-advised fund holders to do due diligence on the charities they are considering.
It can also be said that the trend is towards more and more people, even small givers, at younger ages, to do some due diligence and charity selection, if only by consulting online charity portals like Guidestar and Charity Navigator.
“Are you hired to help or hired help?” asks Patricia Angus. She goes on to suggest that either answer is fine, if you and the client or donor are in agreement. Let us say that the client sees you as the provider of a particular giving opportunity, product, or service. In that case, which of these is (are) appropriate?
I. Engaging in a discernment-based interview, in which you elicit the client or donor’s life story
II. Engaging in a generative conversation, in which the client or donor has a mountaintop experience or transformational insight
A) I only
B) II only
C) Both I and II
D) Neither I nor II
D) Neither I nor II
The correct answer is D. Neither is true. A high-level discernment interview or generative dialogue or transformational experience is, in fact, the exception for even the best advisors and gift planners. For the most part, we remain “hired help,” solicitors, product providers, or experts. We are there, in the eyes of the client or donor, to get a job done and to provide a transaction. They may or may not even want much of a relationship with us. They may well just want the job done fairly, efficiently, and without undo bother or expense. There is no reason to make it more complicated than that, when all indications point to a quick transaction that we can get done. The discernment approach is played out less often, for higher stakes, with high-capacity clients and donors and can be transformational. But we cannot parlay every opportunity into a life-changing experience and should not try to do so. That is the practical wisdom of Patricia Angus.
Talia, through her foundation, can make a multi-million dollar commitment to reducing malaria in the developing world. She can save one life for each malaria net purchased for one dollar. What kind of philanthropic problem is this?
A) Simple
B) Complex
C) Complicated
D) Wicked
A) Simple
The correct answer is A. The problem as stated is simple enough: Talia can save one life per dollar spent, through a well understood strategy. Few problems, of course, are really this simple.
Which of these teams is the one a client gets almost by chance, over the years, according to the Fithians?
A) Core
B) De Facto
C) Virtual
D) Intentional
B) De Facto
The correct answer is B. While this question is framed as something to learn by heart, behind it lies a deep insight, one that is helpful in your career. Yes, successful people have advisory teams. But it is amazing how often those teams were put together with no real thought. One member might be a college buddy; one might be an in-law; one might be a professional met on the golf course. The Fithians are suggesting that the client should have an “intentional team,” one put together on purpose. And on that team there will be a “core team” that meets often. Beyond that is the “virtual team,” brought together to work on a specific issue, which might include, for example, philanthropy.
“In fact, the quality of our attention determines the quality of other people’s thinking. Attention, driven by deep respect and genuine interest, and without interruption, is the key to a Thinking Environment. Attention is that powerful. It generates thinking. It is an act of creation.” That is from Nancy Kline. Who else in this course would be likely to agree, or to say similar things?
I. Carl Rogers
II. Otto Scharmer
A) I only
B) II only
C) Both I and II
D) Neither I nor II
C) Both I and II
The correct answer is C. Rogers is the ultimate source for much of the best contemporary writing on reflective or generative listening. Scharmer makes similar points. Karoff does as well, coming from the perspective of a poet. Palmer arrives at similar views, drawing on Quaker circles.
Consider two planners, Jack and Jane. Both are working with, say, foundations. Jack is a lawyer who sets up foundations as part of an estate-planning process. He has no interest in how grants will eventually be made or to what causes. Jane is a consultant who works with existing foundations to help them make good grants. She has no interest in estate planning, or any kind of tax planning, for that matter. Which statement or statements below is (are) correct?
I. Jack is doing philanthropic planning
II. Jane is doing philanthropic planning
A) I only
B) II only
C) Both I and II
D) Neither I nor II
C) Both I and II
The correct answer is C. Yes, both can say they do philanthropic plans, but their interests and methods differ entirely. One hope of CAP is to integrate these two processes, so that clients and donors experience a more seamless whole.
Give Smart is businesslike, but also contains a powerful sense of humor. The authors say that, from their perspective, grantmakers (at big foundations, for example) live on a kind of “Galapagos Island” without natural predators. What statement or statements below explicate their meaning?
I. Funders live in a world where no one holds them accountable
II. Funders are like ancient predators at the top of the food chain
A) I only
B) II only
C) Both I and II
D) Neither I nor II
I. Funders live in a world where no one holds them accountable
A) I only
The correct answer is A. Voters hold elected officials accountable. Customers hold businesses accountable. Who holds a big foundation accountable? Who holds a wealthy person making a big gift accountable? No one, unless those making the grant or gift hold themselves accountable. In that way, big funders live in a kind of never-never land. The book describes that happy land, a conflict-free zone, “the Galapagos Islands” where the funder is cut off from everyday reality and has no natural predators that will put the funder out of business if their grants are poorly considered. Since the Galapagos Islands are mainly famous for their huge, otherwise extinct, tortoises, the book may also be suggesting that big foundations tend to be slow-moving and self-protective - a living fossil. (Yes, it is a witty way to speak to those who might well be clients of Bridgespan, founded by Tom Tierney.) Tom is the kind of advisor who manages to get said what needs to be said, but in a way that is congenial, even to those who must laugh a bit at themselves.
Moral imagination in philanthropy - in the view of Peter Karoff, who needs it, and why?
I. Advisors do, to see the world through the eyes of clients and donors
II. Philanthropists do, to see the world through the eyes of others who may benefit from their gifts
A) I only
B) II only
C) Both I and II
D) Neither I nor II
C) Both I and II
The correct answer is C. Peter is a poet; he holds a degree in poetry (a Masters of Fine Arts). And he is a great believer in the power and importance of the moral imagination. We need empathy as advisors to enter into the worldview of those we seek to serve, to listen to them, to feel ourselves into their shoes, even if their lives are very different from our own. At the same time, however, the donor, in Peter’s view, must not blindly impose a gift on a community served, as if the donor were the savior of those in need. Rather, the donor, too, must have some empathy for those served by the gift, and feel their way into the very different world the gift may enter. This level of humanity and wisdom is what Peter exemplifies.
In financial planning, the advisor uses software to “project” various “what-if scenarios,” showing what will happen to the client’s income, taxes, and net worth, if a particular strategy, or basket of strategies, is implemented. In adapting this process to philanthropic planning, which “results” should the CAP-style advisor consider?
I. Impact of the strategies on the client’s financial well-being over time.
II. Impact of the strategies on achieving client’s goals as to impact on society.
A) I only
B) II only
C) Both I and II
D) Neither I nor II
C) Both I and II
The correct answer is C. In doing scenarios for a client who wants to consider giving, both the effect on the client and the effect on society (via a gift to a charity, now, later, at death, or beyond death) are relevant. In a way, CAP-style planning is like a Rubik’s Cube, with one dimension representing the effect on the client and family, and another dimension reflecting the effect on society. The well-counseled client will plan to optimize across these dimensions. The planning could address such questions as, “How generous can I afford to be without affecting my other goals?” “How can I minimize taxes in favor of children or charity?” “Which asset is it most efficient to use?” “What tools work best for self, family, and charity?” “When can I afford to give?” “When will my gift have the greatest impact?” “If current impact is best, can I pay for it in installments?” “How can I be sure the money that goes to a charity is not wasted?” Few advisors today work at this level, but the need for it is significant.
