1. Nonprofit Financial Management College of Public and Community Service University of Massachusetts at Boston ©2010 William Holmes

2.  Established by GAAP or Accounting Standards Boards  More restrictive for not for profits than profits  More restrictive for nonprofits than not for profits  More restrictive for charities than other nonprofits  Established to assure nonprofits and not for profits serve the public good.

3. 1. Income categorized as unrestricted or restricted assets 2. Restricted assets must be donor imposed 3. Expenses may be categorized as unrestricted or restricted 4. Donations or gains or loss in investments may be unrestricted or restricted 5. Income reported separate from expenditures 6. Separation of unrestricted, temporary restricted, and permanently restricted

4. 1. Assets not separated as current vs. long-term or variable vs. fixed 2. Assets ordered by liquidity, most liquidity first (or specify in notes) 3. May break down categories in to specific funds, but must give aggregate total 4. May not comingle restricted and unrestricted assets, except for cash

5. 5. Notes should identify temporary and permanent restrictions 6. Restricted accounts are fungible 7. Donor imposed restrictions separated from self-imposed restrictions, permanent vs. temporary restrictions

6.  Expenses listed by functional class and by natural category  Functional classes are programs, types of service, or types of products  Fundraising is a functional category  Natural categories include salaries, supplies, rent, professional fees, bad debts, and depreciation.

7. 1. Expenses separated from revenue 2. Expenses broken into detail 3. Expenses reported by functional class 4. Expenses given by natural categories 5. Statement in matrix form (expense categories by functional classes) 6. Critiqued by low overhead: program- spending ratio and the fundraising efficiency ratio