Nonprofit Financial Reports The following information is summarized from this source: Alliance for Nonprofit Management.

Nonprofit organizations need different financial reports to provide information to support decision-making related to their current issues and services. Some basic reports include: Statement of Position aka Balance Sheet which tells you about the organization’s financial health. The Statement of Activities shows the variance of budgeted to actual information at a given point in time. Depending on the size of the nonprofit, you may also need departmental Income and Expense Statements showing budget to actual information. This helps to pinpoint areas where adjustments are needed.

Another report often overlooked is the Cash Flow Statement which should include projections for the next six months so that you know if you will have a cash surplus or shortage. Reports that are reviewed quarterly or annually include the 990 and Schedule A and/or related State Reports. The board’s finance or audit committee should be given a presentation of the audit and then report to the board with recommendations for approval or not. This includes the management letter from the auditor with the recommendations the auditor has made related to the accounting system, internal controls, and financial planning. 

The executive director should review all reports prior to presenting them to board members to ensure that the financial information makes sense and can be translated into issues and opportunities facing the organization. If applicable, key staff members such as program directors and the director of development should have the opportunity to review income and expense reports for the whole organization.

The finance committee also reviews all financial statements and reports on financial activity to the full board. In a smaller nonprofit, the executive director might report first to the board treasurer, who can then keep the full board apprised of the organization s financial status. Each board member should have the opportunity to review organization-wide income and expense reports (preferably prior to the board meeting).

Financial Reports (current and prior year) including Revenue/Expense Statements, Balance Sheet, Income Statement, Cash Flow Statement. One of the duties of nonprofit board members is the duty of care. In part this means that the board must exercise prudent care related to the financial management of the organization, and spend their funds for the purposes for which they were given. Boards have a fiduciary responsibility to set financial policies and provide oversight to the management and reporting of the organization’s funds. Most states require that nonprofit corporations file an annual financial report. If the organization completes the federal tax return (the 990), the state usually accepts that information in lieu of a separate (additional) report.