Nonprofit Management 4th Edition Test Bank – Worth

Nonprofit Management 4th Edition Test Bank – Worth

Chapter 6 – Ensuring Accountability and Measuring Performance
TEST BANK

1. Which government entity grants nonprofits their charters?
a. The federal government
*b. State governments
c. County governments
d. City governments
Answer Location: Mechanisms for Accountability
Learning Objective: 6-2
Cognitive Domain: Knowledge
Question Type: MC

2. Many nonprofits have voluntarily adopted provisions as a way to assure their donors that they are operating with high integrity, transparency, and sound governance.
a. IRS
b. Pension Protection Act
c. NAFTA
*d. Sarbanes-Oxley
Answer Location: Requirements of Law
Learning Objective: 6-2
Cognitive Domain: Knowledge
Question Type: MC

3. Whose Standards for Excellence in nonprofit management has become a model for other similar associations across the country?
a. Independent Sector
b. BoardSource
*c. The Maryland Association of Nonprofit Organizations
d. The Panel of the Nonprofit Sector
Answer Location: Self-Regulation: Standards and Accreditation
Learning Objective: 6-2
Cognitive Domain: Knowledge
Question Type: MC

4. This entity, formed in 2001, provides standards for nonprofits that are among the best known and most widely cited in the news media.
*a. The Wise Giving Alliance
b. Independent Sector
c. The Finance Committee of the U.S. Senate
d. Charity Navigator
Answer Location: Transparency
Learning Objective: 6-2
Cognitive Domain: Knowledge
Question Type: MC

5. A method that many nonprofits use to determine whether specific programs are effective in achieving their goals and objectives is called:
a. effectiveness evaluation.
b. inputs.
c. statistical benchmarking.
*d. program evaluation.
Answer Location: Measuring Performance
Learning Objective: 6-4
Cognitive Domain: Knowledge
Question Type: MC

6. Very high may suggest that an organization is inefficient, or even participating in unethical or fraudulent behavior.
a. service fees
b. staff salaries
*c. fund-raising costs
d. standards
Answer Location: Financial Ratios
Learning Objective: 6-4
Cognitive Domain: Knowledge
Question Type: MC

7. Leading thought in the field of measuring performance of nonprofits appears to be moving away from an emphasis on the organization’s:
a. ability to accomplish its stated mission.
b. participation in accreditation programs.
c. ability to compete in the nonprofit sector.
*d. financial ratios.
Answer Location: Financial Ratios
Learning Objective: 6-4
Cognitive Domain: Knowledge
Question Type: MC

8. In its proper definition, this term involves comparisons among organizations, either at the macro or at the micro level.
*a. Benchmarking
b. Performance evaluations
c. Accreditation
d. Cost-benefit analysis
Answer Location: Benchmarking
Learning Objective: 6-4
Cognitive Domain: Knowledge
Question Type: MC

9. If an organization wanted to help highlight its strengths or weaknesses for further analysis, which technique would be most useful?
a. Peer analysis
*b. Statistical benchmarking
c. Common indicators
d. Corporate benchmarking
Answer Location: Benchmarking
Learning Objective: 6-4
Cognitive Domain: Comprehension
Question Type: MC

10. Which assessment tool is meant to determine an organization’s success in accomplishing its mission, or program effectiveness?
a. Cost-benefit analysis
b. Financial ratio approach
*c. Outcomes approach
d. Peer analysis
Answer Location: Outcomes
Learning Objective: 6-4
Cognitive Domain: Comprehension
Question Type: MC

11. A theoretical explanation of the links all the way through a process is called a(n):
a. status update.
b. activity-based profitability model.
c. balanced scorecard.
*d. logic model.
Answer Location: Outcomes
Learning Objective: 6-4
Cognitive Domain: Knowledge
Question Type: MC

12. This concept was developed as a way for businesses to obtain a balanced perspective on performance by combining financial data with other considerations.
A. Financial ratios
*b. Balanced scorecard
c. Common indicators
d. Cost-benefit analysis
Answer Location: Balanced Scorecard
Learning Objective: 6-4
Cognitive Domain: Knowledge
Question Type: MC

13. A variation of the balanced scorecard designed specifically for nonprofits, which asks, “Does it work?” and “Is the organization well run?” is a(n):
*a. dashboard.
b. e-Postcard.
c. effectiveness scorecard.
d. balance sheet.
Answer Location: Balanced Scorecard
Learning Objective: 6-4
Cognitive Domain: Knowledge
Question Type: MC

14. Meyer suggests a simpler alternative to balanced scorecard would be:
a. submitting a Form 990.
b. benchmarking. c. identifying correlations between measures.
d. conducting an accountability analysis
Answer Location: Balanced Scorecard
Learning Objective: 6-4
Cognitive Domain: Knowledge
Question Type: MC

15. This concept adds social return to financial return in order to generate a single dollar amount that could be used as an indicator of the organization’s performance and value.
*a. Social return on investment
b. Statistical benchmarking
c. Blended value
d. Corporate benchmarking
Answer Location: Social Return on Investment
Learning Objective: 6-4
Cognitive Domain: Comprehension
Question Type: MC

16. One disadvantage of SROI is that:
a. it does not measure the financial benefit of certain programs.
b. it cannot be used with intangible information.
*c. the analysis process is resource intensive.
d. it provides too much information to easily filter.
Answer Location: Social Return on Investment
Learning Objective: 6-4
Cognitive Domain: Knowledge
Question Type: MC

17. This proposition states that all organizations create value that consists of economic, social, and environmental value components, and that investors simultaneously generate all three forms of value through providing capital to organizations.
a. Simultaneous value
*b. Blended value
c. Performance value
d. Capital value
Answer Location: Blended Value
Learning Objective: 6-4
Cognitive Domain: Knowledge
Question Type: MC

18. According to blended value theorists, value should be thought about as having three components: economic value, social value, and:
a. spiritual value.
b. educational value.
c. artistic value.
*d. environmental value.
Answer Location: Blended Value
Learning Objective: 6-4
Cognitive Domain: Knowledge
Question Type: MC

19. Nonprofit managers should be committed to performance measurement but:
*a. should not become overly focused on it to the detriment of their mission.
b. should be aware that they might be using the wrong measurement tool.
c. not if it takes too long to implement.
d. not to accountability measures.
Answer Location: Chapter Summary
Learning Objective: 6-5
Cognitive Domain: Knowledge
Question Type: MC

20. In 2004, the Urban Institute and the Center for What Works undertook a project to identify a that nonprofits could use to inform practice and that would be practical to implement.
a. balanced scorecard analysis
b. three-dimensional chart
*c. common set of outcomes and outcomes indicators
d. youth-mentoring project
Answer Location: Common Indicators
Learning Objective: 6-4
Cognitive Domain: Knowledge
Question Type: MC

21. A nonprofit organization has placed an equal employment opportunity statement on all its organization’s promotional materials. The organization is demonstrating:
*a. accountability.
b. performance.
c. effectiveness.
d. efficiency
Answer Location: Defining and Ensuring Accountability
Learning Objective: 6-1
Cognitive Domain: Comprehension
Question Type: MC

22. A nonprofit organization developed a dashboard that integrates internal and external variables that influence program performance. The organization is using which measure of performance?
a. Inputs
b. Accountability
*c. Balanced Scorecard
d. Production
Answer Location: Chapter Summary
Learning Objective: 6-2
Cognitive Domain: Comprehension
Question Type: MC

23. The CEO of a nonprofit organization is conducting a study comparing the costs of conducting a fundraising program to the amount of funds raised. The CEO is conducting a(an):
a. benchmarking program.
b. dashboard analysis.
c. a logic model.
*d. a cost-benefit analysis.
Answer Location: Balanced Scorecard
Learning Objective: 6-2
Cognitive Domain: Comprehension
Question Type: MC

24. A CEO of a nonprofit organization is electronically filing a notice to inform the Internal Revenue Service the organization exists. The CEO is filing a(an):
a. Form 1024
*b. e-Postcard.
c. intent to incorporate.
d. common indicator.
Answer Location: Requirements of Law
Learning Objective: 6-2
Cognitive Domain: Comprehension
Question Type: MC

25. A board of directors has hired a consultant to evaluate their nonprofit organization’s legal compliance. According to Patton’s dashboard, the nonprofit is assessing the organization’s:
a. assets.
b. results.
*c. risks.
d. change.
Answer Location: Balanced Scorecard
Learning Objective: 6-3
Cognitive Domain: Comprehension
Question Type: MC

26. __________ is what gets created when investors invest and organizations act to pursue their mission.
*a. Value
b. Accountability
c. Goal displacement
d. Cost-benefit
Answer Location: Blended Value
Learning Objective: 6-3
Cognitive Domain: Comprehension
Question Type: MC

27. A private sector corporation is making a large donation to a nonprofit organization in order to demonstrate community support. This is an example of:
a. a financial ratio.
b. a logic model.
*c. impact investing.
d. self-regulation.
Answer Location: Blended Value
Learning Objective: 6-4
Cognitive Domain: Comprehension
Question Type: MC

28. Another name for statistical benchmarking is:
a. a logic model.
b. a financial ratio.
c. a dashboard.
*d. a comparative performance measurement.
Answer Location: Benchmarking
Learning Objective: 6-4
Cognitive Domain: Comprehension
Question Type: MC

29. As a result of his participation in a nonprofit organization’s program to assist underserved youth, Greg graduated from college. This is an example of a(an):
a. input.
b. activity.
c. common indicator
*d. outcome.
Answer Location: Outcomes
Learning Objective: 6-4
Cognitive Domain: Comprehension
Question Type: MC

30. An organization’s financial results are an example of:
a. legal risk.
*b. effectiveness.
c. accomplishment.
d. applying logic.
Answer Location: Chapter Summary
Learning Objective: 6-1
Cognitive Domain: Comprehension
Question Type: MC

31. Accountability means taking responsibility for your actions.
*a. True
b. False
Answer Location: Defining and Ensuring Accountability
Learning Objective: 6-1
Cognitive Domain: Knowledge
Question Type: TF

32. Requirements of the law include the Sarbanes-Oxley Act and the Pension Protection Act of 2006.
*a. True
b. False
Answer Location: Requirements of Law
Learning Objective: 6-2
Cognitive Domain: Knowledge
Question Type: TF

33. There are specific “best practices” standards that are required of all nonprofit organization in the United States.
a. True
*b. False
Answer Location: Requirements of Law
Learning Objective: 6-2
Cognitive Domain: Knowledge
Question Type: TF

34. The Better Business Bureau has a mechanism that can prescribe how a nonprofit should conduct business.
*a. True
b. False
Answer Location: Transparency
Learning Objective: 6-2
Cognitive Domain: Knowledge
Question Type: TF

35. A certificate or “seal of approval” by a charity watchdog tells potential donors that your nonprofit is beyond reproach.
a. True
*b. False
Answer Location: Transparency
Learning Objective: 6-2
Cognitive Domain: Knowledge
Question Type: TF

36. How much a nonprofit spends on fundraising is a method of financial performance measurement.
*a. True
b. False
Answer Location: Financial Ratios
Learning Objective: 6-4
Cognitive Domain: Knowledge
Question Type: TF

37. Benchmarking is a way for nonprofits to compare themselves among other similar organizations.
*a. True
b. False
Answer Location: Benchmarking
Learning Objective: 6-4
Cognitive Domain: Knowledge
Question Type: TF

38. The logic model is a method for measuring a nonprofit’s financial management capabilities.
a. True
*b. False
Answer Location: Outcomes
Learning Objective: 6-4
Cognitive Domain: Knowledge
Question Type: TF

39. SROI stands for “standard run on inventory.”
a. True
*b. False
Answer Location: Social Return on Investment
Learning Objective: 6-4
Cognitive Domain: Knowledge
Question Type: TF

40. Performance measurement is one of the ways a nonprofit can ensure it is achieving its mission.
*a. True
b. False
Answer Location: Performance Measurement: The Continuing Debate
Learning Objective: 6-4
Cognitive Domain: Knowledge
Question Type: TF

41. Name and explain the three principal mechanisms by which nonprofits are held accountable.
Ans: Varies
Answer Location: Mechanisms for Accountability
Learning Objective: 6-2
Cognitive Domain: Analysis
Question Type: ESS

42. Differentiate the different types of watchdog organizations that proactively examine nonprofit organizations. Are their effects mostly positive or negative? Why?
Ans: Varies
Answer Location: Transparency
Learning Objective: 6-2Cognitive Domain: Analysis
Question Type: ESS

43. Determine the four categories into which the Principles for Good Governance and Ethical Practice are divided.
Ans: Varies
Answer Location: Self-Regulation: Standards and Accreditation
Learning Objective: 6-2
Cognitive Domain: Application
Question Type: ESS

44. Examine and explain the benefits of participating in a best practice accreditation program.
Ans: Varies
Answer Location: Self-Regulation: Standards and Accreditation
Learning Objective: 6-2
Cognitive Domain: Analysis
Question Type: ESS

45. Compare and contrast the terms effectiveness and efficiency.
Ans: Varies
Answer Location: Chapter Summary
Learning Objective: 6-1
Cognitive Domain: Analysis
Question Type: ESS

46. Analyze the four key variables of the United Way outcomes model.
Ans: Varies
Answer Location: Outcomes
Learning Objective: 6-2
Cognitive Domain: Analysis
Question Type: ESS

47. Identify the four perspectives from which a balanced scorecard looks at an organization. Explain pros and cons of using these four perspectives, as discussed in text.
Ans: Varies
Answer Location: Balanced Scorecard
Learning Objective: 6-2
Cognitive Domain: Analysis
Question Type: ESS

48. Identify the components of the McKinsey and Company assessment model for nonprofit organizations and apply each of the components to a nonprofit organization that you are familiar with.
Ans. Varies
Answer Location: Performance Measurement: The Continuing Debate
Learning Objective: 6-2
Cognitive Domain: Application
Question Type: ESS

49. Draw a basic logic model for a program that is offered by a nonprofit organization that you are familiar with. Explain and label each part of your model.
Ans. Varies
Answer Location: Outcomes
Learning Objective: 6-6
Cognitive Domain: Application
Question Type: ESS

50. Explain the advantages and disadvantages of applying a financial ratio performance assessment model.
Ans. Varies
Answer Location: Financial Ratios
Learning Objective: 6-5
Cognitive Domain: Analysis
Question Type: ESS