Certified Fund Raising Executive (CFRE) Practice Test

What is the primary benefit of issuing a gift acknowledgment letter?

1. Legal compliance

2. Donor cultivation

3. Tax deductions for donors

4. Public recognition of donors

The correct answer is: Donor cultivation

The primary benefit of issuing a gift acknowledgment letter lies in its role in donor cultivation. A gift acknowledgment letter serves as a personalized communication tool that helps strengthen the relationship between the organization and the donor. By acknowledging a donor's contribution, the organization demonstrates appreciation for the support, reinforcing the donor's connection to the mission and activities of the organization. This letter can go beyond mere acknowledgment, as it provides an opportunity for the organization to share how the contributed funds will be used, highlighting specific programs or initiatives that benefit from the donation. This not only helps donors feel valued but also encourages them to stay engaged with the organization, fostering a continued relationship that can lead to future support or increased giving. While the other options provide valid functions—such as meeting legal compliance, facilitating tax deductions for donors, and offering public recognition—none carry the same weight in terms of nurturing ongoing relationships and fostering a culture of giving as the process of donor cultivation through acknowledgment letters.