CNP flashcards
CNP · Build recall with a focused review session.
32 cards. Read the term and the definition here. The deck at the top of this page is optional.
- Duty of loyalty
- Board duty requiring directors to act in the organization's interest, disclose conflicts of interest, and recuse themselves from deliberations and votes where personal interest exists.
- Duty of care
- Directors must make informed decisions with the care an ordinarily prudent person would use, including reading materials, asking questions, and attending meetings.
- Duty of obedience
- Directors must ensure the organization follows its mission, bylaws, and applicable law, and does not act beyond its stated charitable purposes.
- Rebuttable presumption procedure
- Under IRC 4958, advance approval by independent board members using comparable-market data and documenting the decision shifts the burden of proof to the IRS.
- Quorum
- The minimum number of directors who must be present for the board to transact business, as set in the bylaws or state nonprofit corporation statute.
- Conflict-of-interest policy
- A written policy requiring annual disclosure of interests, recusal from related votes, and minutes documenting recusal, protecting the board from self-dealing claims.
- Board committees
- Standing or ad hoc groups such as audit, finance, and governance, chartered by the board with defined authority; committees cannot act for the full board unless authorized.
- Donor-advised fund
- A fund held by a sponsoring public charity where the donor recommends grants but has no legal control; the sponsor owns the assets and approves distributions.
- Charitable gift annuity
- A contract in which a donor transfers assets to a charity in exchange for fixed lifetime payments; part is a charitable deduction and part is taxable income.
- Cost per dollar raised
- Total fundraising expense divided by total dollars raised; a ratio used to compare campaigns, not a complete measure of fundraising effectiveness or mission impact.
- Donor retention rate
- The percentage of donors who gave in one period and gave again in the next; calculated as repeat donors divided by prior-period donors.
- Restricted gift
- A contribution limited by the donor to a purpose, time, or both; the organization must honor the restriction and report it as net assets with donor restrictions.
- Gift acceptance policy
- Board-approved rules on which gifts the organization will accept, how illiquid or restricted gifts are reviewed, and who has authority to sign agreements.
- Major gift moves management
- A tracking system for donor relationships through stages of identification, qualification, cultivation, solicitation, and stewardship, recording contacts and asks.
- Endowment spending policy
- A board policy setting the annual payout, often four to five percent of a trailing average market value, balancing current needs with preservation of purchasing power.
- Statement of functional expenses
- A financial statement required of nonprofits that allocates expenses among program services, management and general, and fundraising, showing how resources are used.
- Form 990 filing thresholds
- Organizations with gross receipts normally above $200,000 or assets above $500,000 file Form 990; smaller organizations may file Form 990-EZ or 990-N.
- Segregation of duties
- An internal control principle separating custody of assets, recording of transactions, and authorization so no one person controls an entire financial process.
- Conditional promise
- A pledge that depends on a future event or condition; revenue is recognized only when the condition is substantially met, not when the pledge is made.
- Audit versus review
- An audit provides reasonable assurance and an opinion on financial statements; a review provides limited assurance through inquiry and analytical procedures, without testing controls.
- Operating reserve
- Unrestricted funds set aside by board policy, often measured in months of operating expenses, to cover cash-flow gaps or revenue shortfalls.
- Logic model
- A diagram linking resources and activities to outputs and outcomes, with assumptions and external factors shown, used to plan and evaluate programs.
- Output versus outcome
- Outputs count services delivered, such as sessions or meals; outcomes describe changes in participants, such as skills gained or conditions improved.
- SMART objective
- A program objective that is specific, measurable, achievable, relevant, and time-bound, with a named indicator and data source.
- Formative evaluation
- Evaluation conducted during program delivery to improve implementation, check fidelity, and adjust activities before the program ends.
- Summative evaluation
- Evaluation at the end of a program or cycle that judges whether outcomes were achieved and whether the program was worth its cost.
- Theory of change
- A narrative and diagram explaining the causal pathway and preconditions required for change, going beyond a simple sequence of activities to outcomes.
- Triangulation
- Using multiple data sources, methods, or raters to examine the same question, strengthening confidence in evaluation findings and reducing single-source bias.
- 501(h) lobbying election
- An optional election filed on Form 5768 that sets dollar ceilings on lobbying expenditures for public charities in place of the insubstantial-part test.
- Excess benefit transaction
- A transaction giving a disqualified person more than fair market value from a tax-exempt organization, triggering excise taxes on the person and organization managers under IRC 4958.
- Unrelated business income
- Income from a trade or business regularly carried on that is not substantially related to the exempt purpose; it is taxed and reported on Form 990-T.
- Charitable solicitation registration
- Most states require nonprofits to register with the state charity official before soliciting donations there; exemptions and renewal requirements vary by state.