Your nonprofit Income Statement shows the year-over-year income and spending trends. You should look at your Statement of Activities every month and compare to previous periods. Identify trends and changes in sources of revenue, expenses, and changes to net assets.

Understanding a Nonprofit Statement of Activities

Supporting expenses encompass administrative and general costs necessary to keep your nonprofit running smoothly. Examples include rent, utilities, office supplies, salaries of non-program staff, and professional fees. This section details the fundraising, donations, grants, program service fees, membership dues, and investment income. By categorizing revenue types, you can easily gain insights into the different funding sources.

How frequently are these reports generated?

The nonprofit Statement of Cash Flows reports on the cash flowing in and out of your organization over a certain period of time. It classifies cash as stemming from either investing, financing, or operating activities, just as the for-profit version of this document would. Between fundraising, marketing, and keeping your programs afloat, your nonprofit team likely collects a accounting services for nonprofit organizations variety of financial data.

1 Cash donations

• Looking at both of these levels will indicate whether the nonprofit is running at a surplus or a deficit.
• The Statement of Activities further breaks down your revenue and expenses according to any restrictions limiting how or when you may use them.
• By the end, you’ll have a clear understanding of how it can help you manage your nonprofit’s finances better.
• Here’s an example of a Statement of Activities that was a part of the organization’s audited financial statement in 2021 (page 5).
• This integrated approach illustrates your organization’s impact in a more relatable, holistic way.

Nonprofit accounting can feel complicated for nonprofits without a solid financial background, but there are ways to make filing reports easier. A Statement of Activities is similar to a for-profit income statement and is one of the four financial reports nonprofits must file. With so many pressing causes worth their attention, donors want to feel confident that your nonprofit will put their funds to good use. By sharing your financial statements, you can let them see for themselves just how effectively you’re working to accomplish your mission. There are three different parts to any nonprofit cash flow statement that should be worked into a Non Profit Financial Statement Template.

It’s important to find the balance between reducing overhead to fund your mission and ensuring you dedicate enough funding to your operating activities to continue growing and expanding your organization. The nonprofit statement of activities and the income statement are two different terms that refer to the same report. The Statement of Functional Expenses helps your organization comply with state and federal regulations (including filing https://greatercollinwood.org/main-benefits-of-accounting-services-for-nonprofit-organizations/ your Form 990). It also helps you identify how much of your organization’s money is going towards mission-based activities versus fundraising or administrative expenses.

Statement of Cash Flow

Today we are going to examine and learn how to understand your Statement of Activities, or Statement of Income and Expenses. Permanently restricted revenue consists of funds that are subject to permanent restrictions. These funds must be used for specific purposes in perpetuity and are often received through endowments or bequests. The revenues are broken down further into temporarily restricted, permanently restricted and unrestricted. If you use accounting software, you’ll need to input all of the information manually.