Free Printable Nonprofit Financial Statement Templates Excel

Many nonprofits include these statements in their annual reports to demonstrate accountability. In essence, the unique nature of nonprofit operations and funding mechanisms introduces complexities not typically seen in financial statements for nonprofits standard for-profit financial statements. These challenges necessitate specialized knowledge and careful attention to ensure that financial statements are accurate, compliant, and reflective of the organization’s true financial position. Distinguishing between program, administrative, and fundraising expenses paints a full picture of where donated funds are applied.

• This includes bank statements, invoices, receipts, payroll data, donation records, and any other financial transactions.
• Having templates and guides can make the process smoother for organizations focused on missions over money.
• In this article, we’ll explain more about each financial statement, why and when nonprofits need financial statements, and share examples of how organizations have used them in their annual reports.
• Sage makes no representations or warranties of any kind, express or implied, about the completeness or accuracy of this article and related content.
• Generally, nonprofits try to limit their operating expenses as much as possible to lower their overhead.
• The difference between total revenue and total expenses is known as the change in net assets.

4 Grants

For nonprofit organizations, having clear, accurate financial statements is crucial for maintaining accountability and compliance. Financial statements not only communicate how funds are spent and managed, but also are necessary for seeking funding opportunities and donor support. Crafting comprehensive, professional financial statements tailored to meet nonprofit standards requires an understanding of required elements like the statement of financial position, activities, cash flows and more. Some key indicators to analyze in nonprofit financial statements include the current ratio, fundraising efficiency ratio, and program expense ratio. These indicators provide insights into the organization’s financial health, fundraising effectiveness, and allocation of resources. The nonprofit statement of activities is a vital financial report that provides a comprehensive view of an organization’s financial performance.

• The key here is to make sure the information is presented in an accurate and useful way.
• As with any financial statement, ensure that all figures are accurate and up to date before submission.
• 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.
• The net income on an income statement for nonprofits is what remains after subtracting total expenses from total revenues.
• It typically includes donations or grants that do not come with any donor-imposed restrictions.
• While the statement of activities includes all types of income and expenses, the statement of cash flow focuses on actual cash inflows and outflows, including payments on long-term investments like buildings.

Share your own financial statements

Financial Statements are recorded documents of the business activities written down for the reference of the retained earnings company. They help the organization to manage taxes, finance and invest from inside and outside sources. A financial statement shows a clear picture about the current condition of the organization. A Nonprofit Organisation has to make its Financial Statements just like a for-profit Organisation, but with some adjustment according to the law of the land.

The Importance of Mastering Nonprofit Financial Statements

Therefore, you need to make sure that your accounting system is well organized from start to finish, or else you may have errors in your statement. 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). Financial activities result in either a surplus (increase) or shortfall/deficit (decrease) in the organization’s net assets shown on the Statement of Financial Position (SOFP). Net results are classified as either with or without donor restrictions per FASB (the Financial Accounting Standards Board).

This statement is crucial for Keep Records for Small Business understanding the organization’s liquidity and its ability to cover short-term needs. The statement of activities is like a storybook that tells us about the organization’s income and expenses over time, ending with net assets. These net assets represent what the nonprofit truly owns after all its bills are paid.