Certified Nonprofit Professional Practice Exam

Donor engagement can significantly contribute to which of the following?

1. Increased funding stability

2. Higher administrative costs

3. Increased market competition

4. Lower volunteer participation

The correct answer is: Increased funding stability

Donor engagement plays a crucial role in fostering long-term relationships between nonprofits and their supporters, leading to increased funding stability. When donors feel connected and engaged with an organization, they are more likely to continue their financial support over time, and may even increase their contributions. Engaged donors often share their positive experiences with others, which can also attract new donors and build a stronger community of support. Increased funding stability is vital for nonprofits, as it allows them to plan and implement programs more effectively, ensuring they can meet their missions and serve their communities without the constant uncertainty of fluctuating financial support. This can lead to enhanced trust and loyalty from donors, encouraging recurring giving and deeper philanthropic commitments. The other options suggest outcomes that do not correlate positively with effective donor engagement. For instance, higher administrative costs and lower volunteer participation can detract from the efficiency and effectiveness of a nonprofit, while increased market competition typically results from more organizations vying for the same funding sources rather than from strong donor engagement.