Certified Fund Raising Executive (CFRE) Practice Test

In prospect research, which characteristic should not be overlooked when evaluating a potential donor?

1. Public recognition

2. Past charitable behavior

3. Wealth indicators

4. Personal interests in the cause

The correct answer is: Wealth indicators

Wealth indicators are essential in prospect research as they provide insights into a potential donor's financial capacity to contribute. Understanding an individual's wealth can help organizations tailor their fundraising strategies and identify the most promising prospects. Wealth indicators include factors such as income level, assets, business ownership, and overall financial health, which inform how much a donor might be willing or able to give. While public recognition, past charitable behavior, and personal interests in the cause are significant aspects of donor evaluation, they primarily address motivations and interests rather than the practicalities of financial capability. However, without a solid understanding of wealth indicators, organizations might misalign their fundraising efforts, either overestimating the capacity of less wealthy prospects or underestimating potential contributions from those who may not have a high public profile but possess significant wealth. Thus, overlooking wealth indicators can lead to inefficient prospect prioritization and ultimately affect the success of fundraising initiatives.