1. You are considering contributing to a local charity whose primary function is to provide after-school care for underprivileged children. However, you saw in the paper that the president of the organization just bought a house that is located in a very expensive gated community, and you are concerned that more money is going to the president’s salary than to the actual after-school care. Before you donate, you want to feel comfortable that this is not the case. Which of the following is a financial measurement that might help you in determining the amount of resources going to after-school care?
A. Fund-raising efficiency
B. Program effectiveness
C. Fund-raising ratio
D. Efficiency
2. The tool the IRS most likely will use when key officers in a tax-exempt entity receive excess economic benefits from transactions with the not-for-profit organization is:
A. Fines and forfeits.
B. Revocation of the organization’s tax-exempt status.
C. Intermediate sanctions.
D. Public display of offenders on the IRS’s Web site