Non Profit Financial Statement Template

The Statement of Activities further breaks down your revenue and expenses according to any restrictions limiting how or when you may use them. Aplos partners with Stripe Payments Company for money transmission services and account services with funds held at Fifth Third Bank N.A., Member FDIC. Another thing nonprofits need to keep in mind is that they do have to file a business tax return even though they are not liable for federal income taxes. Nonprofits may need to pay other types of taxes including property taxes or sales taxes. Funds coming in to the nonprofit are recorded when an invoice is sent out rather than when the payment itself is actually received. The most practical way to keep up with accounting needs is to have a Non Profit Financial Statement Template that you use for all your accounting needs.

How the Four Financial Statements Work Together

No matter what option you choose, you need to gather all your financial information before you can create a nonprofit statement of activities. This includes things such as your non-profit’s bank statements, tax returns, and investment statements. Once you have all of this information, you can start creating your statement of activities. That said, nonprofits can choose other reporting periods, like the calendar year, depending on their needs or any specific regulations they have to follow. The main thing is to stick with the same reporting period consistently, so the financial analysis stays accurate and easy to compare over time. To learn even more about nonprofit financial reporting basics, as well as other fund accounting tips, check out our Accounting Fundamentals Revisited webinar series.

So where did that leave Feeding America at the end of the period?

• No matter what option you choose, you need to gather all your financial information before you can create a nonprofit statement of activities.
• These figures, combined with revenue and expense data, provide stakeholders with a holistic view of the organizations overall financial health and stability.
• Or help you understand why your cash increased even as you lost money that quarter (maybe you dipped into your line of credit to make payroll).
• To learn even more about nonprofit financial reporting basics, as well as other fund accounting tips, check out our Accounting Fundamentals Revisited webinar series.
• A clear understanding of diverse revenue streams and their proper categorization is essential for a comprehensive financial picture.
• Unconditional contributions, however, are recognized immediately, providing a more immediate boost to the organization’s financial resources.

Plus costs incurred but not yet paid, like payroll that won’t be accounting services for nonprofit organizations paid until next month or vendor invoices with 30-day terms. The Statement of Financial Position is the nonprofit equivalent of a balance sheet. While the Statement of Activities examines your revenue and expenses, this document focuses on your assets, liabilities, and net assets, offering a broader view of your organization’s financial status. The Statement of Activities lets you evaluate whether your organization is earning more than it spends, providing a snapshot of your financial health.

Action Items for Nonprofit Boards

Meanwhile, horizontally, it’s split into your organization’s unrestricted and restricted revenue. The only difference between these terms is that “income statement” is more commonly used by for-profit organizations, while “statement of activities” is more popular among nonprofits. Many nonprofits find that the word “activities” better reflects their focus on mission-driven work and the fact that they bring in revenue from a variety of sources—not just earned income. The Nonprofit Statement of Activities is an essential financial document that offers a comprehensive view of an organization’s financial status. Its significance to nonprofit organizations lies in its transparency into funding sources, the usage of these funds, and the organization’s budgetary operations. Statement of Activities is part of your nonprofit’s accounting requirements and is often included in its annual report or audited financial report.

• When you examine your nonprofit statement of activities, it should be clear that the line items in the statement match up with those in your organization’s budget.
• However, as you know a nonprofit is not like any other business, so it is no surprise that nonprofit financial reports are different.
• First, it helps nonprofit leaders make informed strategic decisions by showing where funds are coming from and how they are being spent.
• At the bottom of the report, there’s a section dedicated to the organization’s net assets.
• For example, a sudden decrease in donations or a spike in expenses from one month to the next might go unnoticed without careful review.
• The statement of activities will also influence Report 990 generation when it comes time for tax season.
• This approach prevents the premature recognition of funds that may need to be returned if the conditions are not satisfied.

• Unlike for-profit entities, nonprofits must adhere to specific accounting standards that ensure transparency and accountability to donors, grantors, and regulatory bodies.
• It also aids in meeting audit requirements and informing stakeholders about cost allocation.
• Expenses, representing the cost of goods sold and operating expenses, are the costs your nonprofit incurs during its business operations, including program delivery and fundraising activities.
• By presenting a clear articulation of changes in net assets categorized by their restrictions, the statement of activities demonstrates financial accountability and stewardship.
• It enables regular financial check-ins, with your board reviewing the statement to ensure ongoing financial health.
• As we mentioned earlier, many nonprofits use these financial statements in their annual reports to show transparency and build trust in their organization.

Nonprofit financial statements aren’t just helpful – they’re required by the IRS. In this guide, you’ll learn about the four key statements every nonprofit needs, how to prepare them, and which financial ratios are most helpful. Without a customized software solution, many nonprofits download their accounting data to Excel to compile the information in a usable format.

Improved Financial Management

This gives you and your stakeholders time to spot discrepancies and correct errors if necessary. This allows you to mitigate risks and seize opportunities, redirecting funds to the initiatives that most effectively advance your mission. However, the benefits of being transparent in your financial activities go much deeper. Fees paid by your supporters in exchange for privileges, such as newsletters, information, contacts, or access to events. Income generated from services aligned with your mission, such as tuition fees, ticket sales or workshop fees. For instance, an environmental conservation mission could include forestry, wildlife preservation, or educational initiatives.