It remains to be seen whether and, if so, how, the new administration’s priorities will continue to drive a downward trend in enforcement. Accordingly, only four actions against public companies and/or subsidiaries were initiated under the new SEC administration during FY 2025, the fewest in one year since FY 2013. Further, 52 of those 56 actions were brought under former Chair Gensler, the most initiated by an outgoing chair since at least FY 2013. Indeed, Chairman Atkins has expressed that regulation, especially of crypto asset markets, will be done through notice-and-comment rulemaking rather than “regulation-by-enforcement.” Before returning to the SEC, Chairman Atkins was the founder and CEO of Patomak Global Partners, a financial consulting firm focused on the digital asset sector. On January 21, President Trump designated Commissioner Mark Uyeda to serve as Acting SEC Chairman until Chairman Atkins was sworn in on April 21.

Change in net assets

A Statement of Activities (SOA) reveals the income and expenses of nonprofit organization over a reporting period. Generally, nonprofits will report all their revenue into two categories – without donor restrictions and with donor restrictions. First things first, a statement of activities needs to include information about all the revenue of the nonprofit.

Restricted Revenue shows funds with donor-placed restrictions on how or when you can spend the money. It includes donations, grants, fundraising, earned revenue, government funding, and special events. The Statement of Activities further breaks down your revenue and expenses according to any restrictions limiting how or when you may use them. For example, if total revenues for the fiscal year are $2,200,000 and total expenses are $1,850,000, you subtract the expenses from the revenue to determine the net assets. To calculate Net Assets, you start by summing all sources of revenue, including donations, grants, investment income, service revenue, sales, special event income, and any other revenue streams. This figure indicates whether the organization has gained or lost resources during that time, directly impacting its overall financial position.

Paying closer attention to the statement of activities can help you spot problems early—and opportunities! This information can also help a nonprofit determine which revenue strategies are their most and least effective. If a nonprofit realizes that it’s getting the majority of its revenue from just one source, it might be a good idea to start diversifying revenue. By homing in on the revenue section, the nonprofit can determine just how stable and secure revenue streams are.

A Nonprofit Statement of Activities is a comprehensive report that gives a clear picture of an organization’s fiscal operations over a given period. But a nonprofit calls the difference between revenue and expenses change in net assets. In the for-profit world, they call the difference between revenues and expenses net income (or profit). You may also hear it referred to as a profit and loss statement or income and expense report. Managing your nonprofit’s finances is no small task, but there are four standardized financial statements that provide clear benchmarks to … This distinction helps organizations track and report how they are meeting donor expectations, ensuring transparency in how funds are allocated and spent.

Statement Of Activities vs Income Statement

Websites like GuideStar will also use this report to share how your organization uses revenue. This statement is the equivalent of a for-profit’s income statement. Here’s an example of a Statement of Activities that was a part of the organization’s audited financial statement in 2021 (page 5). Websites like GuideStar also look at these reports when choosing which nonprofit to award their platinum and gold seals of approval. Your organization must also list expenses on your Statement of Activities report. Unrestricted funds can be used where your nonprofit needs them most.

Nonprofit Statement of Activities: All You Should Know (+FAQs)

• This specific project information is what you can call a Statement of Activities.
• Moreover, consistent with President Trump’s February 2025 Executive Order temporarily pausing enforcement of the Foreign Corrupt Practices Act (FCPA) by the Department of Justice (DOJ), the SEC did not bring any new FCPA enforcement actions in FY 2025.
• Providing this report to the public on the website or annual report can give transparency and instill trust.
• Your nonprofit Income Statement shows the year-over-year income and spending trends.
• When the SEC brings a civil enforcement action, it typically seeks monetary relief in the form of disgorgement and/or civil penalties.
• A statement of activities quantifies the revenues and expenses of a nonprofit entity for a reporting period.

In this article, we are going to unravel the exciting world of nonprofit accounting by breaking down the Statement of Activities. Explore nonprofit accounting through the breakdown of the Statement of Activities. A sample statement of activities appears below. The rows in the statement reveal revenues and expenses.

These funds are free from any external restrictions and available for general use. Charity runs on finances, and finances run on accounting. There is special guidance on allocating costs related to an activity that combines fundraising with elements of another function.

Nonprofit Budget Monitoring Best Practices

A Statement of Financial Position is a report used by nonprofits to provide a high-level summary of the financial status … By clearly separating these categories in the Statement of Activities, nonprofits can demonstrate their commitment to honoring donor intent and maintaining financial integrity. To learn even more about nonprofit financial reporting basics, as well as other fund accounting tips, check out our Accounting Fundamentals Revisited webinar series. Together, these documents provide a comprehensive view of the organization’s financial health from different perspectives, equipping nonprofit leaders with the insights needed to take action and bring their mission to life. For example, many nonprofits use terms like “revenue” and “net assets” instead of the for-profit equivalents “income” and “net income.”

In this Year in Review, we highlight important takeaways for business leaders and in-house counsel from the Enforcement Division’s activities in 2025 and emerging SEC enforcement practices and priorities under the leadership of Chairman Paul Atkins and Enforcement Director Judge Margaret Ryan. Or, one person could be responsible for handling fundraising cash, while another takes charge of bank statements. Are you drawing most of your revenue from a shrinking pool of donors? There’s also the “big picture” to consider when you take into account multiple statements of activities. However, not all surpluses need to be spent— a prudent nonprofit can save them away for the proverbial rainy day. These should also be compared to revenue – if high amounts of money are being put into fundraising, with minimal https://tax-tips.org/montgomery-county-volunteer-income-tax-assistance/ returns, a different strategy may be in order.

• Ultimately, the statement of activities affirms your organization’s long-term sustainability, because good planning and financial accountability are a strong basis for attracting new donors.
• Essentials of Nonprofit Fundraising
• Reporting them helps financial leaders see where funding is going, and if your organization’s current programs will have long-term fiscal stability.
• For the past 52 years, Harold Averkamp (CPA, MBA) has worked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online.
• Begin with a brief overview that connects the activities to your project’s objectives.
• Now, “when requested in a timely manner,” senior Enforcement leadership “will meet with defense counsel before making a recommendation to the Commission.” This commitment appears to apply to any enforcement recommendation.

A statement of activities focuses on how resources are obtained and used to support a nonprofit’s mission rather than generating profit. A for-profit income statement measures profitability by reporting revenues, expenses, and net income for owners. This is the nonprofit version of the income statement that is used to report the financial results of a for-profit business.

This section will delve more deeply into the key components that make up a Nonprofit Statement of Activities. This transparency and accountability is crucial for building trust with funders, donors, staff, volunteers, and even future supporters. The importance of a Nonprofit Statement of Activities cannot be overstated. Unlike some other financial forms, it’s important to understand that the Statement of Activities is not a living document; it does not continuously update or change. However, it’s important to note that the Statement of Activities is just one part of the accounting puzzle. By the end of the post, you’ll understand each section of the Statement of Activities, how they work, and how they come together to advance the sustainability and growth of your organization.

Discover its crucial role in your organization’s financial story. It reports changes in net assets across restricted and unrestricted categories instead of showing net income. Though it is possible to compress these rows down to just a few line items, it is customary to be more expansive in detailing revenues and expenses. We’ll help you determine if outsourcing your accounting and bookkeeping is the right decision for your organization. And how those expenses relate to the work of carrying out your mission.

How are SOAs Different from an Income Statement?

This amount reflects whether revenue exceeded expenses (surplus) or fell short (deficit) for the year. Apart from a donor’s request, there are other reasons funds might be restricted. When addressing revenue, it is critical to account for donor restrictions.

Identify trends and changes in sources of revenue, expenses, and changes to net assets. Once you have the change in net assets, you can compare revenue and expenses by significant program activity (or function) to see exactly where you are making or losing money. While the goal of a nonprofit isn’t to turn a profit, if you don’t bring in more than you spend, you won’t be able to survive. Unrestricted Revenue shows funds without donor-placed restrictions.

Begin with a brief overview that connects the activities to your project’s objectives. In this post, we’ll explore how to structure and write this crucial section, while keeping the focus on the power of purpose for your fundraising. This specific project information is what you can call a Statement of Activities.

Investment income

Simply, it reports your organization’s revenue and expenses during a specific period and the difference between them. That said, nonprofits can choose other reporting periods, like the calendar year, depending on their needs or any specific regulations they have to follow. montgomery county volunteer income tax assistance program vita An SOA helps nonprofits analyze their financial health by showing how revenues are generated and how funds are allocated. Revenues represent the total income a nonprofit organization receives from various sources, such as donations, grants, program fees, and investment returns, during a specific period. The largest nonprofits in the US can accumulate annual contributions totaling billions of dollars, but the statement of activities breaks the figure down into just a few lines.

By “function” they mean the reason any expenses were incurred, such as management fees, or the costs of providing program services and fundraising activities. These conditions determine how each category of funds can be used, helping stakeholders see whether resources are aligned with donor intentions and organizational goals. By contrast, for-profit organizations can often categorize expenses in broad buckets like Sales, General and Administrative (SG&A), and Cost of Goods Sold (COGS) across several product lines. It details how your organization’s resources have changed, covering funds raised, expenses paid, and the resulting net change in assets. In this article, we’ll elaborate on the purpose of the statement of activities, describe how it’s structured, and explain why it’s so important for transparency and planning. One of the key documents to help you make that call is the statement of activities.