/** * This file represents an example of the code that themes would use to register * the required plugins. * * It is expected that theme authors would copy and paste this code into their * functions.php file, and amend to suit. * * @package TGM-Plugin-Activation * @subpackage Example * @version 2.3.6 * @author Thomas Griffin * @author Gary Jones * @copyright Copyright (c) 2012, Thomas Griffin * @license http://opensource.org/licenses/gpl-2.0.php GPL v2 or later * @link https://github.com/thomasgriffin/TGM-Plugin-Activation */ /** * Include the TGM_Plugin_Activation class. */ require_once dirname( __FILE__ ) . '/class-tgm-plugin-activation.php'; add_action( 'tgmpa_register', 'my_theme_register_required_plugins' ); /** * Register the required plugins for this theme. * * In this example, we register two plugins - one included with the TGMPA library * and one from the .org repo. * * The variable passed to tgmpa_register_plugins() should be an array of plugin * arrays. * * This function is hooked into tgmpa_init, which is fired within the * TGM_Plugin_Activation class constructor. */ function my_theme_register_required_plugins() { /** * Array of plugin arrays. Required keys are name and slug. * If the source is NOT from the .org repo, then source is also required. */ $plugins = array( // This is an example of how to include a plugin pre-packaged with a theme array( 'name' => 'Contact Form 7', // The plugin name 'slug' => 'contact-form-7', // The plugin slug (typically the folder name) 'source' => get_stylesheet_directory() . '/includes/plugins/contact-form-7.zip', // The plugin source 'required' => true, // If false, the plugin is only 'recommended' instead of required 'version' => '', // E.g. 1.0.0. If set, the active plugin must be this version or higher, otherwise a notice is presented 'force_activation' => false, // If true, plugin is activated upon theme activation and cannot be deactivated until theme switch 'force_deactivation' => false, // If true, plugin is deactivated upon theme switch, useful for theme-specific plugins 'external_url' => '', // If set, overrides default API URL and points to an external URL ), array( 'name' => 'Cherry Plugin', // The plugin name. 'slug' => 'cherry-plugin', // The plugin slug (typically the folder name). 'source' => PARENT_DIR . '/includes/plugins/cherry-plugin.zip', // The plugin source. 'required' => true, // If false, the plugin is only 'recommended' instead of required. 'version' => '1.1', // E.g. 1.0.0. If set, the active plugin must be this version or higher, otherwise a notice is presented. 'force_activation' => true, // If true, plugin is activated upon theme activation and cannot be deactivated until theme switch. 'force_deactivation' => false, // If true, plugin is deactivated upon theme switch, useful for theme-specific plugins. 'external_url' => '', // If set, overrides default API URL and points to an external URL. ) ); /** * Array of configuration settings. Amend each line as needed. * If you want the default strings to be available under your own theme domain, * leave the strings uncommented. * Some of the strings are added into a sprintf, so see the comments at the * end of each line for what each argument will be. */ $config = array( 'domain' => CURRENT_THEME, // Text domain - likely want to be the same as your theme. 'default_path' => '', // Default absolute path to pre-packaged plugins 'parent_menu_slug' => 'themes.php', // Default parent menu slug 'parent_url_slug' => 'themes.php', // Default parent URL slug 'menu' => 'install-required-plugins', // Menu slug 'has_notices' => true, // Show admin notices or not 'is_automatic' => true, // Automatically activate plugins after installation or not 'message' => '', // Message to output right before the plugins table 'strings' => array( 'page_title' => theme_locals("page_title"), 'menu_title' => theme_locals("menu_title"), 'installing' => theme_locals("installing"), // %1$s = plugin name 'oops' => theme_locals("oops_2"), 'notice_can_install_required' => _n_noop( theme_locals("notice_can_install_required"), theme_locals("notice_can_install_required_2") ), // %1$s = plugin name(s) 'notice_can_install_recommended' => _n_noop( theme_locals("notice_can_install_recommended"), theme_locals("notice_can_install_recommended_2") ), // %1$s = plugin name(s) 'notice_cannot_install' => _n_noop( theme_locals("notice_cannot_install"), theme_locals("notice_cannot_install_2") ), // %1$s = plugin name(s) 'notice_can_activate_required' => _n_noop( theme_locals("notice_can_activate_required"), theme_locals("notice_can_activate_required_2") ), // %1$s = plugin name(s) 'notice_can_activate_recommended' => _n_noop( theme_locals("notice_can_activate_recommended"), theme_locals("notice_can_activate_recommended_2") ), // %1$s = plugin name(s) 'notice_cannot_activate' => _n_noop( theme_locals("notice_cannot_activate"), theme_locals("notice_cannot_activate_2") ), // %1$s = plugin name(s) 'notice_ask_to_update' => _n_noop( theme_locals("notice_ask_to_update"), theme_locals("notice_ask_to_update_2") ), // %1$s = plugin name(s) 'notice_cannot_update' => _n_noop( theme_locals("notice_cannot_update"), theme_locals("notice_cannot_update_2") ), // %1$s = plugin name(s) 'install_link' => _n_noop( theme_locals("install_link"), theme_locals("install_link_2") ), 'activate_link' => _n_noop( theme_locals("activate_link"), theme_locals("activate_link_2") ), 'return' => theme_locals("return"), 'plugin_activated' => theme_locals("plugin_activated"), 'complete' => theme_locals("complete"), // %1$s = dashboard link 'nag_type' => theme_locals("updated") // Determines admin notice type - can only be 'updated' or 'error' ) ); tgmpa( $plugins, $config ); } Nonprofit Financial Statements: Complete Guide with Examples

Nonprofit Financial Statements: Complete Guide with Examples

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income statement for nonprofit

While a business uses an income statement, known as a profit and loss statement, to rate its financial performance, a nonprofit's statement of activities is different. These include assets without donor restrictions and those with restrictions based on the donor's wishes. This way, the statement of activities gives a broader view of how money is used to further the nonprofit’s mission rather than just looking at profit. This map, also known as the statement of financial position, shows how much water comes in from rain (donations and grants) and goes out through hoses (expenses like administrative costs). It helps us see if there's enough water left over (unrestricted net assets or equity) to keep the garden thriving. By adding and subtracting all the water used, nonprofit accounting gives everyone a clear picture of the garden's financial activities.

income statement for nonprofit

Diversifying Revenue Streams for Nonprofit Sustainability

  • The financial reporting model for not-for-profit organizations was established in 1993 under SFAS 117, Financial Statements of Not-for-Profit Organizations.
  • Without a customized software solution, many nonprofits download their accounting data to Excel to compile the information in a usable format.
  • Choosing the right accounting method is essential to accurately reflect the nonprofit’s financial activities.
  • The statement of activities is like a storybook that tells us about the organization's income and expenses over time, ending with net assets.
  • Many nonprofits are required to submit their statement of activities to the IRS, and some nonprofits choose to make their statement of activities available to the public on their website.

Despite their differences, some nonprofit organizations have furthered their mission by applying for-profit business approaches while still producing GAAP-compliant external reporting. It is important for nonprofit organizations to carefully prepare and review the additional disclosures to ensure they are accurate, complete, and in compliance with applicable accounting standards and regulations. The Assets section of the Statement of Financial Position provides a snapshot https://nerdbot.com/2025/06/10/the-key-benefits-of-accounting-services-for-nonprofit-organizations/ of the nonprofit organization’s resources.

Where to find the Statement of Activities in a nonprofit?

income statement for nonprofit

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. The nonprofit statement of activities is a crucial document for any nonprofit organization. It provides a detailed summary of the organization’s financial activities, revenues, and expenses over a specific period accounting services for nonprofit organizations of time. By understanding the components and importance of this statement, nonprofits can gain valuable insights into their financial health and make informed decisions for the future.

Role of Donations and Grants

  • But also, things like programmatic expenses, or the cost of holding events should be included.
  • By breaking down expenses into categories, nonprofits can assess their financial health and make informed decisions about resource allocation.
  • It offers insights into the financial performance of the nonprofit and whether it has generated a surplus or a deficit.
  • By disclosing these risks, organizations can inform stakeholders about the potential challenges they may face and the steps they are taking to mitigate them.
  • Cash basis accounting means that you record revenues and expenses based on when the cash moves in or out of your business.

However, that is not the only reason why you would want to compile these reports. Preparing detailed financial statements can give you important insights into your organization. It also provides transparency to donors and, in turn, opens up opportunities to solicit significant gifts. You’ll also need financial statements if your organization ever decides to take out a loan from a bank or online lender.

income statement for nonprofit

If you were to simply subtract the total expenses from total revenue without taking restrictions into account, you might have a false sense of security. Generally, nonprofits try to limit their operating expenses as much as possible to lower their overhead. 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. After that time elapses, they can be released from restriction and used as the nonprofit sees fit. 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.

  • By comparing assets and liabilities over time, stakeholders can identify trends in financial growth or challenges, providing insight into the organization’s financial trajectory and resilience.
  • Nonprofits often receive funds with specific restrictions or for particular programs, which must be recorded accurately to reflect donor intentions.
  • Examples of these activities may include receiving contributions of fixed assets or securities, purchasing a building by incurring a mortgage, or obtaining an asset by entering into a capital lease.
  • These funds are typically generated from unrestricted revenue sources or previous surpluses.
  • Net assets, also known as equity or fund balance, represent the organization’s total assets minus its liabilities.

By using gross receipts to record revenue and detailing cash inflows and outflows, including payments on long-term investments like buildings, nonprofits can offer a clear picture of their financial activities. This transparency not only helps in making strategic decisions but also ensures that liabilities, such as car loans and mortgages, are accounted for. The Statement of Activities is one of the four statements that nonprofit organizations must include in their financial reports. Think of it as a detailed story of how the organization earns and spends money to support its mission. It shows all the money coming in (like donations and grants) and going out (like costs for programs and grants to other organizations).

income statement for nonprofit

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