WEEK 1 Flashcards
Which of these statements is (are) true regarding the Fithian legacy planning process?
I. Planning to optimize assets for total return and impact to family and society
II. Planning for spiritual and satisfaction for the family
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. In “Planning for Abundance,” the goal is to help clients plan for what to do with the excess beyond what they and their heirs need.
In “The Case of Jill Donor,” Bill is reluctant to embrace the proposed gift to create a new business school building. All of these are of concern to Bill, EXCEPT:
A) The fundraiser ignored Bill and concentrated on his wife, the business owner.
B) As a teacher of classics, Bill would prefer the gift be directed to the arts, and, in particular, to classics.
C) Bill does not feel that he and his wife have had their wishes consulted properly.
D) The fundraiser has said things to Bill that he finds objectionable.
D) The fundraiser has said things to Bill that he finds objectionable.
The correct answer is D. In fact, the fundraiser never met with Bill and so never could have said anything to him that he found objectionable.
The CPA planning process, as outlined in the slides, drawing on PPC’s Guide to Charitable Giving Strategies, has which of these steps?
I. Set, prioritize, and quantify goals; gather data; develop strategy; communicate strategy; implement.
II. Assess philanthropic impact of charitable strategies via specific charitable organization.
A) I only
B) II only
C) Both I and II
D) Neither I nor II
A) I only
The correct answer is A. The assessment of charitable impact has not been traditionally seen as a professional responsibility by CPAs, or, for that matter, by other financial professionals.
According to a study by Prince and Grove of high net worth clients who fail to sign their legal documents, all of the following are true, except
A) 75% found the legal fees too high
B) 95.6% said their goals were not met
C) 90.1% found the plans incomprehensible
D) 93.4% said the attorney made them uneasy
A) 75% found the legal fees too high.
The correct answer is A. The unhappiness expressed was not about fees, but about the absence of a planning process that elicited goals, issued in plans that met objectives, and were explained in a way that the client could understand.
Which of these statements is (are) true about Kathryn Miree’s “magic questions” for use by fundraisers for a specific charity?
I. She recommends beginning by asking about the donor’s overall giving patterns and overall charitable goals.
II. She recommends asking about the donor’s area of greatest interest within the fundraiser’s charity.
A) I only
B) II only
C) Both I and II
D) Neither I nor II
B) II only
The correct answer is B. Kathryn Miree understands that it may not be wise for a fundraiser to discuss all charitable goals, since the fundraiser is, after all, working for just the one charity. Rather, it may be best to initiate the conversation by talking about how the donor first got involved with the fundraiser’s charity, when and why the donor has given to that charity, and what areas the donor sees at that charity that would be of greatest interest. Then, the fundraiser can ask what gifts the donor has made to that charity, what needs the donor sees at the fundraiser’s charity, and how the donor might help. All of this gives the donor some room to take the initiative and express his or her own views and priorities, but with the range of options likely to fall within the scope of what the fundraiser can accomplish.
In “The Case of Jill Donor,” Jill, Bill, and their daughter, Sondra, might all agree that a large gift to fund a classics building would make perfect sense. Bill and Jill studied classics. Both believe classics can help change the world. In addition, Sondra would be happier with classics than with a business building. Why, then, doesn’t State University simply take the money?
I. The business building is a top priority with the President and the Trustees.
II. There are very few classics students, and a new classics building would be of little value and expensive to maintain.
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, and both express valid reasons. The school has its own legitimate priorities. The fundraiser works for the school. Her job is to bring in money to meet the school’s needs. Futhermore, it turns out that in this case the donor’s desires simply cannot be adequately met by the school. The dream the donor and her family have cannot be realistically implemented by the school. Taking the money for a new classics building would likely lead to an unhappy outcome. Gifts like this, to achieve the best possible outcome, require give-and-take between the donor, the family, the advisory team, and the nonprofit. The fundraiser may play a key role as an ambassador back and forth among the parties as the gift comes together.
In the traditional approach (as conveyed by BoardSource’s “Steps to Solicitation,” outlined in the slides) major gift fundraisers are taught to begin a serious gift conversation by doing which of these?
A) Asking open-ended questions about donor goals
B) Gaining insight into the donor’s asset structure and income
C) Asking questions about the impact of giving on heirs
D) Presenting a case statement as to why the charity needs the money, and how that money will be used in a manner consistent with the organization’s mission and capacities.
D) Presenting a case statement as to why the charity needs the money, and how that money will be used in a manner consistent with the organization’s mission and capacities.
The correct answer is D. This approach of starting from the nonprofit’s mission, needs, and capacities makes perfect sense for a fundraiser within the context of the fundraiser’s professional role, that of raising money to meet institutional priorities. However, the process may also collide with advisors who have greater access to the client’s income statement, balance sheet, and overall priorities.
With “The Case of Jill Donor” in mind, a proposed major gift can fail for which of these reasons?
I. The donor’s priorities are not adequately considered.
II. The charity’s capacities and priorities are not adequately considered
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 donor’s wishes should be respected, as well as the charity’s capacities. If the charity agrees to do what the donor wants–if it takes the money but fails to perform–then the gift has failed. Likewise, if the charity does what the donor wants, but goes outside its mission or loses money on the project, then the gift has failed.
The major gift fundraiser in “The Case of Jill Donor” is described at the end of the case study as becoming an “ambassador.” Which is the best paraphrase of what that means?
A) The fundraiser works for the charity and carries messages from the charity to the donor.
B) The major gift fundraiser does or should participate in two planning processes–one surrounding the donor and the donor’s priorities, and the other at the charity, surrounding the charity’s needs, capacities, and priorities. As ambassador, the gift planner does or should bring these two spheres into conversation with each other.
C) The major gift fundraiser is less a problem-solver than a good will ambassador for the charity.
D) The major gift fundraiser is an advisor to the donor, and serves the donor’s priorities by acting as donor’s ambassador to the charity.
B) The major gift fundraiser does or should participate in two planning processes–one surrounding the donor and the donor’s priorities, and the other at the charity, surrounding the charity’s needs, capacities, and priorities. As ambassador, the gift planner does or should bring these two spheres into conversation with each other.
The correct answer is B. Fundraisers do work for the charity, but to succeed in a major gift, the fundraiser may well have to shuttle back and forth like an ambassador between two worlds. One world is that of the donor, the family, and the advisors. The other world is that of the charity, with its many needs and priorities. Bringing these two worlds together may require that someone, in this case the fundraiser, go beyond his or her specific role and bring the two spheres into conversation. An advisor on Jill’s team could play this role, but none seems inclined to do so.
Which process follows these steps: identification, qualification, cultivation, solicitation, stewardship, and renewal?
A) CPA planning process
B) Major gift solicitation process
C) Miree’s consultative gift-planning process
D) Planned gift solicitation process
B) Major gift solicitation process
The correct answer is B. As a way to go deeper, consider which processes as taught in this assignment begin with open-ended questions about the client or donor and which begin with statements, written materials, or a pitch. A general point made in CAP is that as the size of the potential gift goes up, and as charitable tools are introduced into the process, it becomes more important to open with questions about the donor’s interest, background facts, and priorities. Generally, advisors, including CPAs, begin with this kind of “discovery/agreement” or “goal-setting and fact-finding.” Miree, trained as an attorney, does some of that, too, in her consultative gift planning process. Even though she represents the charity, she opens with questions to seek a fit between the donor’s charitable goals and the charitable opportunities and tools she can offer. But the traditional major gift process opens the donor interview with a pitch. Very little is generally done face-to-face with the donor to establish facts and set goals. Likewise, the planned gift process often goes from identification, to qualification, to cultivation, to illustration of a tool, then to the ask, then to implementation, and, finally, to stewardship. The illustration becomes the pitch. Better questions = better outcomes might be the central message of CAP.
