Week 1 Flashcards
Approximately how many nonprofits are registered with the IRS in the United States?
A) 500,000
B) 1.5 million
C) 2.5 million
D) 3 million
B) 1.5 million
The correct answer is B. There are approximately 1.5 million nonprofits registered in the U.S., according to the National Center for Charitable Statistics (NCCS).
Salamon makes which point(s) below?
I. Nonprofits are increasingly being held to a businesslike standard and are pulled towards commercialism.
II. Nonprofits have certain key values that distinguish them from both government and businesses. Nonprofits are, ideally, productive, empowering, effective, reliable, responsive, and caring.
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. Salamon sees the sector being pulled towards commercialism and also becoming increasingly dependent on government funding. Hence, the sector is becoming increasingly bureaucratic and manages within government rules and procedures.
At the same time, however, Salamon believes that the heart and soul of the sector lies in its defining and distinctive qualities: productive, empowering, effective, reliable, responsive, and caring. He feels that to protect and preserve itself, the sector must assert these defining, value-based differences and not merely initiate business or court government funding.
From a CAP® standpoint, this means leading with above-the-line missions, visions, and values at the nonprofit, following through in a businesslike way, and completing necessary tasks.
Each of the following might be a 501c3, EXCEPT
A) a local church
B) a nonprofit daycare center
C) an animal shelter
D) a PAC
D) a PAC
The correct answer is D. Political Action Committees (PACs) are 527s.
All of these are sectors as described in this course, EXCEPT
A) Market
B) Religious
C) Nonprofit
D) Government
B) Religious
The correct answer is B, Religious. The three sectors are public, private, and nonprofit. This refers to the business, government, and nonprofit sectors. The nonprofit sector is also referred to as the “third sector,” the “non-profit sectory,” and the “voluntary sector.” The areas within the nonprofit sector – such as health, education, social services, arts, etc. – are subsectors of the nonprofit sector.
Both for-profits and nonprofits can do each of these, EXCEPT
A) Invest stocks and bonds
B) Distribute surplus or assets to insiders
C) Can and should generate a surplus
D) Sell products and services
B) Distribute surplus or assets to insiders
The correct answer is B. Nonprofits cannot distribute their surplus or assets to individual stakeholders.
All of these are among the four impulses shaping the nonprofit sector, per Lester Salamon, EXCEPT
A) Voluntarism
B) Civic activism
C) Professionalism
D) Faith
D) Faith
The correct answer is D. Faith is not mentioned by Salamon. It would most likely fit under voluntarism. The fourth pole, which does not appear as an answer choice, is commercialism, Salamon’s term for what some would call social venture philanthropy, impact investing, markets for good, or other vehicles that harness market mechanisms.
Generally, we pay for and receive the benefit in commerce. Often, in a nonprofit setting, we give, and others benefit. Yet, in certain settings, the bulk of a charity’s revenue may come from those who currently and directly benefit from it. All of these are good examples of the latter, EXCEPT
A) Symphonies
B) Universities
C) Hospitals
D) Food banks
D) Food banks
The correct answer is D. Many successful nonprofits serve people who are not poor. The nonprofit takes in funds as fees, tuition, or ticket sales. In addition, people served by the nonprofit may donate funds to perpetuate the institution that has touched them and their family.
A social service organization, however, like a food bank, takes in resources from one group and provides them at low or no cost to others who cannot afford to pay or give much. Over time, these social service organizations have gravitated toward government funding through contracts, grants, and reimbursement. As such funding declines, as it seems likely to do, this raises the question of who will step up, why, and how quickly.
Which of these is the smallest source of donated revenue for nonprofits?
A) Living individuals
B) Private foundations
C) Corporations
D) Bequests
C) Corporations
The correct answer is C. Corporate giving is the smallest source of philanthropic revenue.
A large national foundation commissions a study of recidivism in Georgia (convicts are released from prison, only to be sentenced to prison for a newly committed crime). The study is conducted by experts who conclude that the primary cause of recidivism is the lack of job training available to convicts. The foundation then consults with education experts and a panel drawn from prison management.
The result is the funding of a nonprofit that teaches job skills to prisoners on parole. The teaching is conducted by experienced trainers from several industries. Results of the program are measured with quarterly reports to the foundation.
Which of Salamon’s four nonprofit poles best represents this approach?
A) Voluntarism
B) Civic activism
C) Professionalism
D) Commercialism
C) Professionalism
The correct answer is C. This is a classic example of relying on experts and professionals to get the job done. The model utilizes social science.
Voluntarism -the community comes together to “walk the talk” Virtue, tradition, and moral responsibility are prioritized.
Civic Activism - The hero is the social organizer. Key terms are human rights, citizenship, equality and justice.
Commercialism - the hero is the social entrepreneur, business leader, or professional business manager. The poor can be better served through business solutions: creating jobs or providing necessary products, including medicine or education.
Each of these is an example of earned revenue in a nonprofit organization, EXCEPT
A) Tuition for school
B) Fees for a stay in a nursing home
C) Donations from a year-end appeal
D) Gift shop revenue in a museum
C) Donations from a year-end appeal
The correct answer is C. Donations from an appeal letter mailing are counted as philanthropic support, not as earned revenue.
Government funding of the nonprofit sector takes all of these forms, EXCEPT
A) Contracts
B) Vouchers
C) Reimbursements
D) Gifts
D) Gifts
The correct answer is D. The government is not a philanthropist. The money from the government comes from contracts with the charity, vouchers that the recipient can use to purchase services from the nonprofit, and reimbursement by the government of covered costs incurred by the user of a nonprofit service.
The legitimacy of a public charity depends on its:
A) Broad base of support
B) Active board members
C) Major gifts
D) Commercialism
A) Broad base of support
The correct answer is A. Nonprofit organizations must have a broad base of support to achieve legitimacy.
Which generation below has the largest percentage of members who give?
A) Silent
B) Boomers
C) Gen X
D) Millennials
A) Silent
The correct answer is A. When compared with the other generations, the Silent Generation has the largest percentage of members who give.
Which statement is true, with respect to giving as a percentage of GDP?
A) It has remained constant for decades, at around 2%.
B) It has remained constant for decades, at 5%.
C) It has fluctuated from 2-5%, depending on the state of the economy.
D) It has fluctuated from 2-5%, depending on the tax laws.
A) It has remained constant for decades, at around 2%.
The correct answer is A. Giving has not changed more than a little as a percentage of GDP. Regardless of economic conditions and changes in the tax laws, the percentage has hovered between 1.6% and 2.1% of GDP since 1977.
The collection of non-governmental and not-for-profit organizations that have a presence in public life, expressing the interests and values of their members or those of others, based on ethical, cultural, political, scientific, religious, or philanthropic considerations, is referred to as:
A) Philanthropic sector
B) Civic activism
C) Civil society
D) Charitable sector
C) Civil society
The correct answer is C, civil society. This question provides a good definition of civil society.
