CNP cheat sheet

Board legal duties: duty of care (informed, prudent decisions), duty of loyalty (no self-dealing, conflicts disclosed and recused), duty of obedience (mission and law).

Quorum is defined in bylaws or state nonprofit statute, not by majority of members present; action without a meeting requires unanimous written consent unless bylaws allow otherwise.

Conflict-of-interest policy elements: annual disclosure, recusal from vote and discussion, minutes record the recusal, comparable-market review for compensation and transactions.

IRS rebuttable presumption (IRC 4958): compensation approved in advance by independent board members using comparable data shifts burden of proof to the IRS in excess-benefit cases.

Board composition rule of thumb: at least a majority independent; officers typically chair, treasurer, secretary, with duties fixed in bylaws and state law.

Fiduciary oversight documents: Form 990 review by the board, audited or reviewed financials, whistleblower policy, document-retention and destruction policy, and public disclosure of Form 1023/990.

Executive transition: succession plan names an interim leader, board committee, and communication plan; the board evaluates the CEO, and the CEO does not vote on their own compensation.

Governance vs. management: the board sets mission, strategy, policy, and CEO oversight; staff executes operations; board members have no individual authority unless delegated.

Bylaws amendment and dissolution require the vote threshold stated in bylaws and compliance with state nonprofit corporation act; assets on dissolution go to another exempt purpose.

Gift acceptance: restricted gifts must be accepted only if the restriction is mission-aligned, feasible, and costed; gift acceptance policy defines refused gifts (e.g., illiquid assets, cause-related conflicts).

Donor bill of rights principles: accurate disclosure of mission and use of funds, confidentiality of donor records, and honoring donor intent on restrictions.

Restricted versus unrestricted net assets: temporarily restricted (purpose or time), permanently restricted (endowment), unrestricted; release from restriction occurs when the condition is met.

Cost-per-dollar-raised = total fundraising costs / total dollars raised; program cost ratio = program expenses / total expenses; neither alone measures effectiveness.

Donor retention rate = (donors giving in year 2 who also gave in year 1) / donors in year 1; acquisition cost is usually recovered only over multiple years.

Planned giving instruments: bequests, charitable remainder trusts, charitable gift annuities, donor-advised funds; split-interest gifts require legal and tax counsel.

Endowment spending policy typically 4-5% of a trailing 12-quarter average market value; underwater endowment rules restrict spending under UPMIFA.

Sponsorship versus donation: sponsorship is a payment for advertising or acknowledgment (may be taxable unrelated business income); a donation has no substantial return benefit.

Major-gift pipeline stages: identification, qualification, cultivation, solicitation, stewardship; moves management tracks contacts and asks.

Accounting equation: Assets = Liabilities + Net Assets (not equity); net assets classified as without donor restrictions or with donor restrictions.

Statement of functional expenses allocates costs among program, management and general, and fundraising; joint costs require ASC 958-720 allocation criteria.

Internal controls: segregation of duties (custody, recording, authorization), dual signatures above a threshold, monthly bank reconciliation by someone not handling cash.

Budget variance = actual - budget; favorable or unfavorable depends on whether the line is revenue or expense; investigate variances beyond a set threshold.

Form 990 thresholds: gross receipts normally over $200,000 or assets over $500,000 file Form 990; smaller file 990-EZ; under $50,000 gross receipts may file 990-N.

Ratio limits: publicly supported charity under 170(b)(1)(A)(vi) needs public support of at least one-third of total support; private foundation rules differ.

Audit vs. review vs. compilation: audit gives reasonable assurance and opinion; review gives limited assurance; compilation presents information without assurance.

Reserve policy: operating reserve measured in months of expenses; board-approved target with restrictions on use; not the same as endowment.

Cash flow rule: pledge revenue is recognized when unconditional; conditional promises are recognized only when the condition is substantially met.

Logic model chain: inputs, activities, outputs, outcomes (short, intermediate, long), impact; assumptions and external factors sit outside the chain.

Outputs count what was delivered (sessions, meals); outcomes describe change in participants (knowledge, behavior, condition); impact is the long-term population-level change.

SMART objectives: specific, measurable, achievable, relevant, time-bound; each objective needs an indicator and a data source.

Formative evaluation improves a program during delivery; summative evaluation judges merit or worth at the end; process evaluation checks fidelity and reach.

Theory of change differs from a logic model: it explains the causal pathway and preconditions, not just the sequence of activities.

Indicator quality: valid (measures the outcome), reliable (consistent across time and raters), feasible to collect, and ethically obtained with consent.

Comparison designs: pre/post without control cannot rule out maturation or history; randomized controlled trials give strongest causal evidence but may be infeasible.

Data collection methods: surveys, interviews, focus groups, observation, administrative records; triangulation uses multiple sources to strengthen conclusions.

Evaluation use: report to funders and stakeholders, close the loop with participants, and feed findings back into program design decisions.

501(c)(3) prohibition: no substantial part of activities may be propaganda or otherwise attempting to influence legislation, and no participation in political campaigns for or against candidates.

Lobbying limits: insubstantial-part test or the 501(h) expenditure test with sliding dollar ceilings; 501(h) election requires Form 5768 and covers only public charities.

Excess benefit transactions (IRC 4958): disqualified persons include officers, directors, and substantial contributors; intermediate sanctions are excise taxes, not automatic revocation.

Private benefit versus private inurement: inurement benefits insiders and can jeopardize exemption; private benefit to non-insiders must be incidental and in furtherance of mission.

Unrelated business income (UBI): trade or business, regularly carried on, not substantially related to exempt purpose; taxed on net income, reported on Form 990-T.

Form 990 public disclosure: must be made available for public inspection; Schedule B donor names may be withheld from public copies for non-501(c)(3) and certain donors.

Whistleblower and anti-retaliation: policy permits confidential reporting, prohibits retaliation, and routes reports to an independent channel; Sarbanes-Oxley applies to nonprofits in some respects.

Community engagement: needs assessment, stakeholder mapping, and participatory planning; community voice on the board and in evaluation strengthens relevance and legitimacy.

State charitable registration: solicitation in a state generally requires registration with the charity official before fundraising, with exemptions varying by state.

Board legal duties: duty of care (informed, prudent decisions), duty of loyalty (no self-dealing, conflicts disclosed and recused), duty of obedience (mission and law).

Quorum is defined in bylaws or state nonprofit statute, not by majority of members present; action without a meeting requires unanimous written consent unless bylaws allow otherwise.

Conflict-of-interest policy elements: annual disclosure, recusal from vote and discussion, minutes record the recusal, comparable-market review for compensation and transactions.

IRS rebuttable presumption (IRC 4958): compensation approved in advance by independent board members using comparable data shifts burden of proof to the IRS in excess-benefit cases.

Board composition rule of thumb: at least a majority independent; officers typically chair, treasurer, secretary, with duties fixed in bylaws and state law.

Fiduciary oversight documents: Form 990 review by the board, audited or reviewed financials, whistleblower policy, document-retention and destruction policy, and public disclosure of Form 1023/990.

Executive transition: succession plan names an interim leader, board committee, and communication plan; the board evaluates the CEO, and the CEO does not vote on their own compensation.

Governance vs. management: the board sets mission, strategy, policy, and CEO oversight; staff executes operations; board members have no individual authority unless delegated.

Bylaws amendment and dissolution require the vote threshold stated in bylaws and compliance with state nonprofit corporation act; assets on dissolution go to another exempt purpose.

Gift acceptance: restricted gifts must be accepted only if the restriction is mission-aligned, feasible, and costed; gift acceptance policy defines refused gifts (e.g., illiquid assets, cause-related conflicts).

Donor bill of rights principles: accurate disclosure of mission and use of funds, confidentiality of donor records, and honoring donor intent on restrictions.

Restricted versus unrestricted net assets: temporarily restricted (purpose or time), permanently restricted (endowment), unrestricted; release from restriction occurs when the condition is met.

Cost-per-dollar-raised = total fundraising costs / total dollars raised; program cost ratio = program expenses / total expenses; neither alone measures effectiveness.

Donor retention rate = (donors giving in year 2 who also gave in year 1) / donors in year 1; acquisition cost is usually recovered only over multiple years.

Planned giving instruments: bequests, charitable remainder trusts, charitable gift annuities, donor-advised funds; split-interest gifts require legal and tax counsel.

Endowment spending policy typically 4-5% of a trailing 12-quarter average market value; underwater endowment rules restrict spending under UPMIFA.

Sponsorship versus donation: sponsorship is a payment for advertising or acknowledgment (may be taxable unrelated business income); a donation has no substantial return benefit.

Major-gift pipeline stages: identification, qualification, cultivation, solicitation, stewardship; moves management tracks contacts and asks.

Accounting equation: Assets = Liabilities + Net Assets (not equity); net assets classified as without donor restrictions or with donor restrictions.

Statement of functional expenses allocates costs among program, management and general, and fundraising; joint costs require ASC 958-720 allocation criteria.

Internal controls: segregation of duties (custody, recording, authorization), dual signatures above a threshold, monthly bank reconciliation by someone not handling cash.

Budget variance = actual - budget; favorable or unfavorable depends on whether the line is revenue or expense; investigate variances beyond a set threshold.

Form 990 thresholds: gross receipts normally over $200,000 or assets over $500,000 file Form 990; smaller file 990-EZ; under $50,000 gross receipts may file 990-N.

Ratio limits: publicly supported charity under 170(b)(1)(A)(vi) needs public support of at least one-third of total support; private foundation rules differ.

Audit vs. review vs. compilation: audit gives reasonable assurance and opinion; review gives limited assurance; compilation presents information without assurance.

Reserve policy: operating reserve measured in months of expenses; board-approved target with restrictions on use; not the same as endowment.

Cash flow rule: pledge revenue is recognized when unconditional; conditional promises are recognized only when the condition is substantially met.

Logic model chain: inputs, activities, outputs, outcomes (short, intermediate, long), impact; assumptions and external factors sit outside the chain.

Outputs count what was delivered (sessions, meals); outcomes describe change in participants (knowledge, behavior, condition); impact is the long-term population-level change.

SMART objectives: specific, measurable, achievable, relevant, time-bound; each objective needs an indicator and a data source.

Formative evaluation improves a program during delivery; summative evaluation judges merit or worth at the end; process evaluation checks fidelity and reach.

Theory of change differs from a logic model: it explains the causal pathway and preconditions, not just the sequence of activities.

Indicator quality: valid (measures the outcome), reliable (consistent across time and raters), feasible to collect, and ethically obtained with consent.

Comparison designs: pre/post without control cannot rule out maturation or history; randomized controlled trials give strongest causal evidence but may be infeasible.

Data collection methods: surveys, interviews, focus groups, observation, administrative records; triangulation uses multiple sources to strengthen conclusions.

Evaluation use: report to funders and stakeholders, close the loop with participants, and feed findings back into program design decisions.

501(c)(3) prohibition: no substantial part of activities may be propaganda or otherwise attempting to influence legislation, and no participation in political campaigns for or against candidates.

Lobbying limits: insubstantial-part test or the 501(h) expenditure test with sliding dollar ceilings; 501(h) election requires Form 5768 and covers only public charities.

Excess benefit transactions (IRC 4958): disqualified persons include officers, directors, and substantial contributors; intermediate sanctions are excise taxes, not automatic revocation.

Private benefit versus private inurement: inurement benefits insiders and can jeopardize exemption; private benefit to non-insiders must be incidental and in furtherance of mission.

Unrelated business income (UBI): trade or business, regularly carried on, not substantially related to exempt purpose; taxed on net income, reported on Form 990-T.

Form 990 public disclosure: must be made available for public inspection; Schedule B donor names may be withheld from public copies for non-501(c)(3) and certain donors.

Whistleblower and anti-retaliation: policy permits confidential reporting, prohibits retaliation, and routes reports to an independent channel; Sarbanes-Oxley applies to nonprofits in some respects.

Community engagement: needs assessment, stakeholder mapping, and participatory planning; community voice on the board and in evaluation strengthens relevance and legitimacy.

State charitable registration: solicitation in a state generally requires registration with the charity official before fundraising, with exemptions varying by state.

Board legal duties: duty of care (informed, prudent decisions), duty of loyalty (no self-dealing, conflicts disclosed and recused), duty of obedience (mission and law).

Quorum is defined in bylaws or state nonprofit statute, not by majority of members present; action without a meeting requires unanimous written consent unless bylaws allow otherwise.

Conflict-of-interest policy elements: annual disclosure, recusal from vote and discussion, minutes record the recusal, comparable-market review for compensation and transactions.

IRS rebuttable presumption (IRC 4958): compensation approved in advance by independent board members using comparable data shifts burden of proof to the IRS in excess-benefit cases.

Board composition rule of thumb: at least a majority independent; officers typically chair, treasurer, secretary, with duties fixed in bylaws and state law.

Fiduciary oversight documents: Form 990 review by the board, audited or reviewed financials, whistleblower policy, document-retention and destruction policy, and public disclosure of Form 1023/990.

Executive transition: succession plan names an interim leader, board committee, and communication plan; the board evaluates the CEO, and the CEO does not vote on their own compensation.

Governance vs. management: the board sets mission, strategy, policy, and CEO oversight; staff executes operations; board members have no individual authority unless delegated.

Bylaws amendment and dissolution require the vote threshold stated in bylaws and compliance with state nonprofit corporation act; assets on dissolution go to another exempt purpose.

Gift acceptance: restricted gifts must be accepted only if the restriction is mission-aligned, feasible, and costed; gift acceptance policy defines refused gifts (e.g., illiquid assets, cause-related conflicts).

Donor bill of rights principles: accurate disclosure of mission and use of funds, confidentiality of donor records, and honoring donor intent on restrictions.

Restricted versus unrestricted net assets: temporarily restricted (purpose or time), permanently restricted (endowment), unrestricted; release from restriction occurs when the condition is met.

Cost-per-dollar-raised = total fundraising costs / total dollars raised; program cost ratio = program expenses / total expenses; neither alone measures effectiveness.

Donor retention rate = (donors giving in year 2 who also gave in year 1) / donors in year 1; acquisition cost is usually recovered only over multiple years.

Planned giving instruments: bequests, charitable remainder trusts, charitable gift annuities, donor-advised funds; split-interest gifts require legal and tax counsel.

Endowment spending policy typically 4-5% of a trailing 12-quarter average market value; underwater endowment rules restrict spending under UPMIFA.

Sponsorship versus donation: sponsorship is a payment for advertising or acknowledgment (may be taxable unrelated business income); a donation has no substantial return benefit.

Major-gift pipeline stages: identification, qualification, cultivation, solicitation, stewardship; moves management tracks contacts and asks.

Accounting equation: Assets = Liabilities + Net Assets (not equity); net assets classified as without donor restrictions or with donor restrictions.

Statement of functional expenses allocates costs among program, management and general, and fundraising; joint costs require ASC 958-720 allocation criteria.

Internal controls: segregation of duties (custody, recording, authorization), dual signatures above a threshold, monthly bank reconciliation by someone not handling cash.

Budget variance = actual - budget; favorable or unfavorable depends on whether the line is revenue or expense; investigate variances beyond a set threshold.

Form 990 thresholds: gross receipts normally over $200,000 or assets over $500,000 file Form 990; smaller file 990-EZ; under $50,000 gross receipts may file 990-N.

Ratio limits: publicly supported charity under 170(b)(1)(A)(vi) needs public support of at least one-third of total support; private foundation rules differ.

Audit vs. review vs. compilation: audit gives reasonable assurance and opinion; review gives limited assurance; compilation presents information without assurance.

Reserve policy: operating reserve measured in months of expenses; board-approved target with restrictions on use; not the same as endowment.

Cash flow rule: pledge revenue is recognized when unconditional; conditional promises are recognized only when the condition is substantially met.

Logic model chain: inputs, activities, outputs, outcomes (short, intermediate, long), impact; assumptions and external factors sit outside the chain.

Outputs count what was delivered (sessions, meals); outcomes describe change in participants (knowledge, behavior, condition); impact is the long-term population-level change.

SMART objectives: specific, measurable, achievable, relevant, time-bound; each objective needs an indicator and a data source.

Formative evaluation improves a program during delivery; summative evaluation judges merit or worth at the end; process evaluation checks fidelity and reach.

Theory of change differs from a logic model: it explains the causal pathway and preconditions, not just the sequence of activities.

Indicator quality: valid (measures the outcome), reliable (consistent across time and raters), feasible to collect, and ethically obtained with consent.

Comparison designs: pre/post without control cannot rule out maturation or history; randomized controlled trials give strongest causal evidence but may be infeasible.

Data collection methods: surveys, interviews, focus groups, observation, administrative records; triangulation uses multiple sources to strengthen conclusions.

Evaluation use: report to funders and stakeholders, close the loop with participants, and feed findings back into program design decisions.

501(c)(3) prohibition: no substantial part of activities may be propaganda or otherwise attempting to influence legislation, and no participation in political campaigns for or against candidates.

Lobbying limits: insubstantial-part test or the 501(h) expenditure test with sliding dollar ceilings; 501(h) election requires Form 5768 and covers only public charities.

Excess benefit transactions (IRC 4958): disqualified persons include officers, directors, and substantial contributors; intermediate sanctions are excise taxes, not automatic revocation.

Private benefit versus private inurement: inurement benefits insiders and can jeopardize exemption; private benefit to non-insiders must be incidental and in furtherance of mission.

Unrelated business income (UBI): trade or business, regularly carried on, not substantially related to exempt purpose; taxed on net income, reported on Form 990-T.

Form 990 public disclosure: must be made available for public inspection; Schedule B donor names may be withheld from public copies for non-501(c)(3) and certain donors.

Whistleblower and anti-retaliation: policy permits confidential reporting, prohibits retaliation, and routes reports to an independent channel; Sarbanes-Oxley applies to nonprofits in some respects.

Community engagement: needs assessment, stakeholder mapping, and participatory planning; community voice on the board and in evaluation strengthens relevance and legitimacy.

State charitable registration: solicitation in a state generally requires registration with the charity official before fundraising, with exemptions varying by state.