Fundamentals

Introductory information for a nonprofit to understand and assess their financial condition, assess their financial management practices, and identify priorities for planning.

Resources in Fundamentals

A budget is a planning tool that reflects an organization’s programs, mission, and strategic plan. This guide will help you during the budgeting process.

Healthy nonprofit organizations employ financial management practices that build

Balance Sheet Basics refreshes key terminology. Additionally, learn how the balance sheet works with your income statement and how to report restricted funds on your balance sheet.

No matter how expertly you manage your budget, you can confidently project a surplus at the end of the year and still not have enough cash at some point during your fiscal year. That’s because money doesn’t always come in and go out smoothly from day to day or month to month. In order to weather the ups and downs properly it’s important to project and plan your cash flow.

Understanding the ebbs and flows of your organization's cash will help you make smart management decisions that protect your core programs and overall sustainability. Use this template to manage cash flow at your organization.

This video explains cash and accrual accounting, two distinct accounting methods.

This resource provides 12 signs that your nonprofit will be financially healthy over the long term.

Your nonprofit work has certain knowable costs. Costs for staff, costs for property and equipment, costs for programs. Sound nonprofit finance means determining, accounting for and allocating those costs properly. It also helps in your fundraising efforts to know how much a program will truly cost your organization. 

Learn more about how cost allocation helps you understand your true program costs with our e-study

When a nonprofit organization owns a piece of equipment or property that they are going to use over a long period of time, they want to see that reflected in their financial information. Depreciation can be confusing, but the accounting concept is one we can all understand.

If the idea of creating a financial policy seems daunting, this basic guideline for policy development may be helpful.

Use this checklist to assess your organization's financial management practices and identify areas for improvement.

This glossary provides definitions of terminology commonly used in nonprofit finance. 

Learn key terminology, including a brief overview of depreciation expense and how restricted contributions can be reported on the income statement.

This resource will help your nonprofit manage your cash flow by explaining why, when and how. Additionally, this resource provides management strategies to help your nonprofit prevent cash flow shortages.

This resource article aims to define unrestricted, temporarily restricted, and permanently restricted income, and give nonprofit leaders the tools to record, report, and effectively manage contributed income and net assets.

In this video, Nonprofits Assistance Fund defines different contribution categories and explains how to account for and manage restricted funds.

These sample reserve policies are provided to get you started, but keep in mind that no example will be an exact fit for your organization. We have included some options to assist you. Be sure to review these parts carefully to create the right policy for your organization.

In this video, learn about the audit process, review the contents of an audit report, and discuss how to use this information to improve your organizational management.

Whether you call it the rainy day fund, a nest egg, or your safety net, reserves are an important and sound nonprofit management principle. But, how much do you need in reserve? When and how do you use your reserves? We're here to clear things up for you a bit.

From time to time you'll have donations or grants that come with a few strings attached. These could be restrictions on how the money will be used or the time frame in which it can be used. It's important to know how these restrictions affect your budget, and how to manage these restricted funds.