Nonprofit Statement of Activities MIP Fund Accounting
As you create your statement of activities, make sure to separate unrestricted and restricted funds in the revenue and net assets sections. Restricted funds have to be used for a specific purpose as designated by the major donor or grantmaker who contributed them, while you can put unrestricted funds toward any area of your nonprofit’s budget. Distinguishing between these categories helps you understand how flexible your organization’s funding is and ensures you spend restricted funds as intended. In fact, nonprofit financial statements are so important that many nonprofit organizations will make their annual reports publicly available by sharing them on their website. The nonprofit statement of activities is one of the primary nonprofit financial statements. It parallels the income statement used by for-profit businesses, but tracking how well you’ve fulfilled your mission, rather than focusing on profit. The SOA outlines a company’s profits and expenditures over a period, while the
