Certified Fund Raising Executive (CFRE) Practice Test

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Enhance your fundraising career with the CFRE test. Practice with our quiz featuring comprehensive questions and explanations. Ace your CFRE exam!

Practice this question and more.


What is a significant hidden cost that organizations may encounter in fundraising?

  1. Marketing materials

  2. Insurance premiums

  3. Staff training programs

  4. Attrition rates

The correct answer is: Attrition rates

Understood. Attrition rates represent a significant hidden cost in fundraising because they indicate the turnover of staff or volunteers within an organization. High attrition rates can lead to increased expenses in recruiting and onboarding new personnel, which often are not immediately apparent in a budget. When staff leave, their knowledge and relationships with donors are also lost, requiring additional resources to rebuild trust and connections. This can slow down fundraising efforts and diminish overall effectiveness. While marketing materials, insurance premiums, and staff training programs may also contribute to costs, they are more direct and typically accounted for in budget planning, making them less 'hidden.' Attrition rates, on the other hand, can lead to compounding financial strain over time, affecting organizational stability and potential revenue from fundraising activities. Understanding and addressing attrition can help organizations better manage their costs and improve their long-term fundraising success.