Certified Fund Raising Executive (CFRE) Practice Test

When an organization faces embarrassment due to audit findings on government grant expenditures, what should they do regarding donor concerns?

1. Ignore the situation to avoid further scrutiny

2. Conduct a private investigation first

3. Be open and forthright in publicly stating its position

4. Restrict access to financial records to donors

The correct answer is: Be open and forthright in publicly stating its position

Being open and forthright in publicly stating the organization’s position is essential in managing donor concerns after audit findings on government grant expenditures. Transparency is critical in maintaining trust and credibility with donors, especially when there is potential for embarrassment or reputational damage. By openly addressing the situation, the organization demonstrates accountability and a commitment to ethical practices. This approach not only reassures current donors but can also enhance the organization's reputation among potential donors and stakeholders. It allows the organization to control the narrative surrounding the situation, providing factual information that can alleviate donor fears and misunderstandings. In contexts where organizations respond defensively or restrict information, they may exacerbate concerns and erode trust. Therefore, clear communication and a commitment to rectifying any issues identified in the audit are crucial for sustaining donor relationships and upholding the integrity of the organization.