Non Profit Financial Statement Template

This involves recording revenue and expenses from both the current and previous periods to show how the organization’s net assets have changed. By using gross receipts to record revenue and detailing cash inflows and outflows, including payments on long-term investments like buildings, nonprofits can offer a clear picture of their financial activities. This transparency not only helps in making strategic decisions but also ensures that liabilities, such as car loans and mortgages, are accounted for. The Statement of Activities is one of the four statements that nonprofit organizations must include in their financial reports.

The Difference Between an Income Statement and a Nonprofit Balance Sheet

A non-profit financial statement is a document that relays all the revenues and expenses of a non-profit organization at a particular time or year. It is a way how the nonprofit will be transparent about all the grants that they received. Through the statement, the non-profit can be given a chance to thrive because they can assess their stand regarding financial matters.

7 Restricted and unrestricted funds

For example, these assets become retained earnings distributed to shareholders. Nonprofits separate resources into various accounts, which identify where those resources come from and their usage. Secondly, it must provide the necessary funding to support your mission in the present and the future. As an executive or financial officer, make it a habit to regularly review all financial statements. Instead, review your Statement of Activities, Statement of Financial Position, and Cash Flow Statement monthly or quarterly. The Cash Flow Statement tracks the movement of cash in and out of your organization over a given period.

Sheet Templates

• The assets and liabilities can be subdivided into various categories depending on the activities of the non profit organization.
• Implementing clear guidelines for recording program-related expenses versus administrative or fundraising expenses can also prevent misclassification and improve the clarity of financial statements.
• Financial statements are one of the most important tools that the leaders of a nonprofit organization can use to ensure the future health of the entity.
• If you’re on budget or have a surplus, it will show potential donors that you’re a responsible organization.

This statement provides insights into whether or not the nonprofit has enough accounting services for nonprofit organizations cash on hand to cover its expenses. The cash flow statement can be prepared on a monthly, quarterly, or yearly basis. Although both documents hold a lot of the same information, the statement of activities presents nonprofit financial data in a format suitable for internal management and stakeholders. You probably embarked on your nonprofit journey motivated by social values, but it’s crucial to address the financial aspects of these missions as well.

Revenues

Adherence to GAAP is critical for producing standardized and credible financial reports. Impressive numbers are good to show donors, but what counts is drawing meaningful insights from that data. Nonprofit statements show how donations are used and how the organization is making a difference.

• In contrast, natural categories include salaries and benefits, supplies, professional fees, depreciation, and interest, among other operating costs and expenses.
• This statement is crucial for understanding the financial health and sustainability of a nonprofit.
• They can also receive tax-deductible donations, encouraging more people to give.
• They can choose to do this on the face of their Statement of Activities, as a schedule in the notes attached to the full set of documents, or in a separate financial statement—the Statement of Functional Expenses.
• In some cases, these dues might also grant members voting rights or other forms of participation in the organization’s governance.
• They can also be created in the form of balance sheets for better understanding of the finances of the company.

This part covers cash from your everyday activities, like running your programs and services. So, while both types of organizations keep track of their finances, they report and use that money differently. Nonprofits benefit from perks like tax-exempt status, meaning they don’t have to pay federal income tax on money they raise for their mission. They need to be clear about where every dollar goes—whether it’s directly supporting their mission or covering operations costs. Sharing your financial reports gives companies a clear view of how well you manage your funds and what kind of impact you’ve had. Companies are getting more into philanthropy these days, with corporations giving over $21 billion to nonprofits in 2022 alone through matching gifts, volunteering grants, fundraising matches, and more.