The above template helps you with the format of a nonprofit financial statement. A formal https://nerdbot.com/2025/06/10/the-key-benefits-of-accounting-services-for-nonprofit-organizations/ financial statement for a nonprofit organization shows the amount of expenditure for the current year and the prior year as well. Also called as statement of analysis cash flows, this means that the places in which the revenue of the company is going needs to be maintained properly. The above template is an example of a financial statement for a nonprofit organization. For every company, these statements are very much required so that you can know about what is happening to the income they get from the customers and how is it being spent. The statement should contain a sample list of funds, assets and liabilities of a company that it has.

What Is A Statement Of Activities?

You must also break out the statement of activities into restricted and unrestricted. SFAS 117 is the primary guidance related to nonprofit financial statements. The statement of financial activities is a document that lists a nonprofit organization’s income and expenses for a given reporting period. These two documents provide a brief overview of how the organizations’ net assets have changed during that given period.

FREE 10+ Non-Profit Financial Statements Samples

• Operating revenue includes funds from donations, ticket sales, product sales, etc.
• Investing revenue is the amount of interest you can make from investments.
• You can also check out nonprofit simple sheet to create you financial statements in Microsoft Excel Format, which is easier to make.
• The primary purpose of the statement of activities is to satisfy regulatory requirements, such as Generally Accepted Accounting Principles (GAAP) and Form 990 for the IRS.
• However, 63% of people want to see proof that nonprofits follow a set of guidelines and ethical principles.
• Check out how Blackbaud Financial Edge NXT® simplifies reporting with our quick guide, Save Time and Make Informed Decisions with Blackbaud Financial Edge NXT Reports.

This helps maintain trust with donors and can also assist organizations in planning their investing activities and using their assets wisely. Just like puzzle pieces fit together to show a bigger picture, different financial statements connect to give a full view of a nonprofit’s financial health. Let’s explore how these pieces, like the statement of activities, balance accounting services for nonprofit organizations sheet, statement of functional expenses, and statement of cash flow, fit together to help nonprofits make informed decisions. These documents provide an overview of the nonprofit’s sources of income, how funds are spent, the programs and services offered, and the organization’s overall financial health.

Statement of Activities: Reading a Nonprofit Income Statement

The structure and amount of these dues can vary widely depending on the organization’s objectives, the value proposition for members, and the targeted demographic. In some cases, these dues might also grant members voting rights or other forms of participation in the organization’s governance. At times, supporters will give donations stipulating that they can only be used on a specific project or program. The net assets on your statement of financial position are where your organization must list these restrictions. Nonprofits must comply with the IRS and file four financial statements to ensure they follow strict nonprofit regulations. Many of these statements are similar to what for-profit businesses file, but some significant differences exist.

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. This allows your organization to make sure you’re on track with your budgeted regular expenses. 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.

Financial statements help nonprofits rate their organization’s income and net assets, providing a detailed look at how these activities impact the overall financial health of the organization. Liabilities in a nonprofit’s financial statements are like the backpack of obligations the organization carries. They categorize what the nonprofit organization owes, such as loans or bills that need to be paid.

• They include salaries and other costs to show exactly where the money goes, helping everyone understand the financial health of the nonprofit.
• To convince these businesses that supporting your nonprofit is a smart move, you need to show them your financial statements.
• For more detailed guidance, check out how to grow a nonprofit organization for tips on financial management.
• These provide additional details and context for the data in the financial statements.
• You can include all restricted funds together or segment them by donation type.
• 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.