Greetings!
We all want our money spent well. One way to better understand whether what we invest in a community nonprofit is being spent well is to look at their financial statements. Annual financial statements are usually available at Guidestar, or on the agency's website.
If I'm going to contribute a serious amount of funds to a nonprofit, I want to know the health of the agency's financial management resources. I want to know that the systems which report and monitor the finances of the agency are working well, in order to insure that the board of directors can effectively guide the program and policy decisions necessary to protect my financial contributions.
While nonprofit accounting systems vary, all are held to something called Generally Accepted Accounting Principles (GAAP). GAAP standards for financial statements, whether monthly or annually, recommend that such statements be designed clear enough to allow donors and grantors that ability to review the health of the agency financially.
"Financial reporting is the means of communicating with those who use financial information. For this communication to be effective, information in financial reports must have these basic characteristics: understandability, reliability, relevance, timeliness, consistency, and comparability."
Here are links to some of the nation's Community Action Agencies, established in 1964 under the Economic Opportunity Act, to deliver vital services to the low income sector through community-based nonprofit organizations. They are the largest collection of nonprofits currently being held to GAAP standards through annual federal audits.
Kern County
Madera County
Silicon Valley
San Luis Obispo
A common design in these financial reports in the separation of assets, liabilities, and fund balances between unrestricted, restricted, endowment, and plant. This best allows the board of directors to examine its resources, and make decisions on the health of the agency.
Another criteria which should be used to measure the health of a nonprofit to which you are considering donating to is the degree to which these statements are reviewed. Many nonprofits are able to produce excellent financial statements, but only reviewed annually, and by staff and perhaps the board's finance committee. I believe that a healthy organization produces consistent financial reports monthly, and shares them with the board of directors.
Here are examples agendas for some more of the same agencies cited above.
SETA (Sacramento)
NCO (North Coast Counties)
Monterey County
Inyo County
CSET (Tulare County)
Another good clue to the strength of an organization is their annual report and strategic plans, and how easy they are to access, and how widespread is their distribution. Here are a few examples of excellent reports.
Monterey County
Merced
Kings County
Contra Costa
San Diego
San Bernardino
Orange County
Santa Barbara County
Santa Cruz County
We all want our money spent well. One way to better understand whether what we invest in a community nonprofit is being spent well is to look at their financial statements. Annual financial statements are usually available at Guidestar, or on the agency's website.
If I'm going to contribute a serious amount of funds to a nonprofit, I want to know the health of the agency's financial management resources. I want to know that the systems which report and monitor the finances of the agency are working well, in order to insure that the board of directors can effectively guide the program and policy decisions necessary to protect my financial contributions.
While nonprofit accounting systems vary, all are held to something called Generally Accepted Accounting Principles (GAAP). GAAP standards for financial statements, whether monthly or annually, recommend that such statements be designed clear enough to allow donors and grantors that ability to review the health of the agency financially.
"Financial reporting is the means of communicating with those who use financial information. For this communication to be effective, information in financial reports must have these basic characteristics: understandability, reliability, relevance, timeliness, consistency, and comparability."
Here are links to some of the nation's Community Action Agencies, established in 1964 under the Economic Opportunity Act, to deliver vital services to the low income sector through community-based nonprofit organizations. They are the largest collection of nonprofits currently being held to GAAP standards through annual federal audits.
Kern County
Madera County
Silicon Valley
San Luis Obispo
A common design in these financial reports in the separation of assets, liabilities, and fund balances between unrestricted, restricted, endowment, and plant. This best allows the board of directors to examine its resources, and make decisions on the health of the agency.
Another criteria which should be used to measure the health of a nonprofit to which you are considering donating to is the degree to which these statements are reviewed. Many nonprofits are able to produce excellent financial statements, but only reviewed annually, and by staff and perhaps the board's finance committee. I believe that a healthy organization produces consistent financial reports monthly, and shares them with the board of directors.
Here are examples agendas for some more of the same agencies cited above.
SETA (Sacramento)
NCO (North Coast Counties)
Monterey County
Inyo County
CSET (Tulare County)
Another good clue to the strength of an organization is their annual report and strategic plans, and how easy they are to access, and how widespread is their distribution. Here are a few examples of excellent reports.
Monterey County
Merced
Kings County
Contra Costa
San Diego
San Bernardino
Orange County
Santa Barbara County
Santa Cruz County
