Non-Profit Organization Statement of Activities Template » OFFICETEMPLATES NET

Unlike the SOA, the Statement of Cash Flows outlines cash inflows accounting services for nonprofit organizations and outflows. It provides insights into liquidity and cash management instead of detailing income and expenditures. If the net income is positive, that means the organization is making more money than it’s spending.

Understanding Nonprofit Statements of Activities

It helps identify certain programs that cost more and have a low success rate. Conversely, if a project does well, the organization can invest more in it and apply the insights to other projects. To make this process easier, we recommend that your organization partner with a nonprofit accountant like the experts at Jitasa. Our team will meet you where you are in compiling your statement of activities, analyze your financial data, and make tailored recommendations to improve your revenue and expense allocation going forward.

Safeguard Your Financial Integrity with Effective SOA Management

The results of each successive fiscal year’s financial activities accumulate on the SOFP, changing the net asset balances. Repeated annual deficits in the SOA will result in an accumulated deficit on the SOFP. Net assets with donor restrictions are usually never below zero, although special reporting may apply to an “underwater ” endowment balance (topic not covered here).

Nonprofit statement of activities template

Unrestricted donations can be used for any need of the nonprofit, including daily operations. Temporarily restricted donations must be spent https://greatercollinwood.org/main-benefits-of-accounting-services-for-nonprofit-organizations/ on a certain project over a particular period of time. Permanently restricted funds are given to the nonprofit to be used as investments. The items that cause the changes in Net Assets are reported on the nonprofit’s statement of activities (to be discussed later). The following table compares the main financial statements of a nonprofit organization with those of a for-profit corporation.

• This information contributes to a clearer understanding of an organization’s long-term financial sustainability and its ability to effectively manage its resources.
• Misinterpreting these restrictions can lead to the improper recognition of revenue and restricted net assets, skewing the report on available funds for designated activities or projects.
• Management and general expenses support the overall administration and infrastructure of the organization, including salaries of administrative staff, office rent, and technology costs.
• Narratives should succinctly highlight achievements, financial strategies, and future plans in layman’s terms, while dashboards provide a visual summary of trends, ratios, and key indicators at a glance.
• While businesses are organized to generate profits, nonprofits are organized to address needs in society.
• By consistently monitoring your cash inflows and outflows, you’ll be able to notice important trends and use them to adjust your financial strategy in the future.

Do nonprofits have a profit and loss statement?

Sources of unrestricted funds include revenue from general donations, membership fees, or grants that came without specific instructions. An SOA helps nonprofits analyze their financial health by showing how revenues are generated and how funds are allocated. A Statement of Activities includes revenue and expenses during a nonprofit’s reporting period (a fiscal or calendar year) and gives an overview of the changes to an organization’s net assets during that time. But, since auditable nonprofit financial statements, we’ll talk about accrual accounting practices in this article.

Financial management systems built for nonprofits not only automate the reconciliation process but also provide detailed tracking and reporting capabilities for restricted fund management. By minimizing manual data entry, these tools reduce the risk of human error, ensuring that financial data is accurate and up-to-date. As a CPA working with nonprofits of all sizes, I’ve encountered numerous errors in Board of Directors’ financial reports and Statements of Activities documents. Being aware of these common pitfalls is crucial for maintaining the integrity of your financial reporting and in turn, the trust of your supporters. FastFund Accounting automatically generates your Statement of Activities with the proper segregation of revenue classes and expense functional categories.

As a nonprofit professional she has specialized in fundraising, marketing, event planning, volunteer management, and board development. Any other donations that do not come with a designation can be termed unrestricted funds. Since many of your expenses will cover salary, insurance, rent, utilities, events, technology, etc., you may find that your restricted funds are higher than unrestricted ones. All revenue sections from your organization must also be split between unrestricted and restricted funds. If your nonprofit provides and charges people fees for their services, you can also report this revenue on your Statement of Activities. The revenues are broken down further into temporarily restricted, permanently restricted and unrestricted.

Are You Ready To Outsource Your Accounting?

We focus on financial statement reporting and do not discuss how that differs from income tax reporting. Therefore, you should always consult with accounting and tax professionals for assistance with your specific circumstances. While the statement of cash flows, or cash flow statement, may be a bit difficult to prepare, it is an important financial statement to be read. The detail in the general ledger accounts will always be available for management’s use. However, the account balances will be combined into a few amounts that are presented in the financial statements and IRS Form 990. For example, a management employee might be spending 30% of her time in fundraising activities but her entire salary has been recorded as management and general expenses.

This information is crucial for assessing the nonprofit’s financial sustainability and its ability to continue fulfilling its mission in the long term. One of the primary components of the Statement of Activities is the categorization of revenues and expenses. Revenues are often divided into various streams such as contributions, program service fees, and investment income. This segmentation allows stakeholders to understand the diverse sources of funding that support the nonprofit’s mission. For instance, contributions might include individual donations, corporate sponsorships, and fundraising event proceeds, each of which can be tracked separately to assess their impact. The nonprofit Statement of Activities is one of the main financial statements of a nonprofit organization.