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Nonprofit Financial Report Info

An ongoing series of informational entries

What are the most common Nonprofit Financial Reports?


Lenora Williams: Posted on Sunday, June 19, 2011 6:18 PM

When a bank or a grantor requests a nonprofit agency's financial reports, what reports are they really asking for?

The following reports meet the terms of the request for your nonprofit financials:

· Profit and Loss (P&L) - shows organizations expenses vs. its revenue. P&L financial reports are great tools for monitoring over and under spending. P&L financial reports can be designed to monitor grant expenditures by adding a third variable the grant budget, then the P&L monitors revenue received against anticipated revenue and budget expense line items against actual expenditures.

· Income Statement - shows the amount of change in each category of net assets(unrestricted net assets, temporary restricted and permanently restricted net assets).

· Statement of Cash Flows - indicates cash separated by; cash used for operations,investments, and financing activities

· Balance Sheet - shows an organization's total assets, total liabilities and provides totals for unrestricted net assets, temporary restricted and permanently restricted net assets.

Definitions of different types of funds:

What are unrestricted funds/assets?

They are dollars free of restrictions - You can use the funds any way the nonprofit board of directors sees fit.

What are temporary restricted funds/assets?

They are dollars that have funder imposed restrictions - The restrictions can have a time limit or a restricted purpose (how the donor would like to see the funds spent). When you write grants for temporary restricted funds, you have specified a need/purpose and the funder is agreeing to fund you based on the specific need/purpose. Once the need/purpose is met the remaining funds can be moved to "unrestricted".

What are permanently restricted funds/assets?

They are dollars with restrictions that can never be removed; an example is an endowment fund. Endowment funds are funds where the principal must remain intact and can never be reduced. Donations of land and buildings for permanent use by the organization are examples of permanently restricted assets.

Brief Description of Nonprofit Financial Statements


Written by Glenda Estioko, Presented by Lenora Williams, May 9, 2011: Posted on Wednesday, May 18, 2011 9:01 PM

Financial Statements

The Income Statements

A Financial Statement is a written report which quantitatively describes the financial health of a company usually compiled on a monthly, quarterly, and annual basis.

3 Main Financial Statements:

Ø Income Statement

Ø Balance Sheet

Ø Cash Flow Statement

What is an Income Statement?

The Income Statement (or Profit & Loss Statement) reports the income, expenses, and net income (surplus/deficit) for a specific period of time.

Fund Accounting

Nonprofit organizations use an accounting system called fund accounting. Fund accounting essentially groups financial data together into funds (Class/Job Codes) or accounts that share a similar purpose. This way, the organization has a better idea of what resources it has available to complete a specific task.

Differences between revenues (income) and expenditures (expenses) are called surpluses (a positive difference) or deficits (a negative difference).

Income Statements tell a story….

• Total Income: Informs you what types of funding the organization received;

• Total Expenses: Informs you what types of expenses the department/program incurred to fulfill deliverables;

Example: Labor, utilities, marketing, supplies, depreciation, etc.

• Net Income: Informs you of the difference (surplus or deficit) of Income and Expenses.

Total Income (Revenue) - Total Expenses (Expenditures) = Net Income (Surplus/Deficit)

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