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