Certified Fund Raising Executive (CFRE) Practice Test

Which factor is most significant for a nonprofit organization when evaluating its director of development?

1. Increase in net-contributed income

2. Volunteer engagement levels

3. Community outreach effectiveness

4. Number of fundraising events held

The correct answer is: Increase in net-contributed income

Evaluating the performance of a director of development in a nonprofit organization hinges on the organization's ability to generate net-contributed income, making this factor particularly significant. An increase in net-contributed income reflects the effectiveness of fundraising strategies and the ability to secure funding from various sources, such as individual donations, grants, and corporate sponsorships. This financial growth is crucial for the sustainability and expansion of nonprofit programs and services. Additionally, increased net-contributed income indicates a successful alignment of the organization's mission with fundraising efforts, demonstrating that the director has effectively engaged stakeholders and communicated the importance of the organization's work. This metric is a direct measure of the director’s performance, emphasizing their ability to meet or exceed financial targets, which is essential for the organization’s long-term viability and success. While other factors, such as volunteer engagement levels, community outreach effectiveness, and the number of fundraising events held, are important in their own right, they ultimately contribute to or support the overarching goal of increasing net-contributed income. Thus, the most significant factor for evaluating a director of development rests with the financial outcomes they achieve through their leadership and strategic initiatives.