Certified Fund Raising Executive (CFRE) Practice Test

What is the essential institutional policy that every fundraising entity should have?

1. Donor recognition policy

2. Gift acceptance policy

3. Fundraising strategy policy

4. Volunteer engagement policy

The correct answer is: Gift acceptance policy

The gift acceptance policy is a crucial document for any fundraising organization. This policy outlines the guidelines and parameters under which the organization will accept gifts, ensuring that all contributions align with its missions, values, legal compliance, and ethical standards. It provides clarity on what types of donations are acceptable, how they are valued, and any restrictions or conditions that may apply. This helps to safeguard the organization’s reputation and ensures that it can manage its resources effectively and ethically. Having a clear gift acceptance policy fosters transparency and reinforces trust with donors, as they understand the criteria that their contributions must meet. It also assists staff and volunteers in navigating complex situations surrounding donor intent, types of gifts (like cash, securities, or property), and any legal considerations. While the other options are also important aspects of a fundraising operation, they do not serve the foundational role that a gift acceptance policy does in establishing boundaries and guiding decision-making related to contributions. A donor recognition policy, for instance, is more about acknowledging support after the fact rather than defining how gifts are received in the first place. Similarly, while a fundraising strategy policy and volunteer engagement policy are valuable, they focus on broader operational strategies rather than the specific protocols related to accepting gifts.