Complete Lesson List
All 15 lessons with key topics covered in each
1
Course Introduction
- Non-profit accounting focuses on accountability and stewardship, not profit generation
- Each dollar must be tracked to show it’s used for its intended purpose
- Good financial management helps attract supporters and expand mission impact
2
Non-Profit Fundamentals
- 501(c)(3) organizations are tax-exempt and donations to them are tax-deductible
- Non-profits exist to serve a mission, not generate returns for owners
- You serve multiple stakeholders: donors, board, grantors, and regulators
3
Fund Accounting Basics
- Fund accounting tracks money by purpose and restrictions, not just by type
- Unrestricted funds are most flexible; temporarily restricted have conditions; permanently restricted must stay intact
- Set up separate fund codes in your system for each distinct restriction
4
Chart of Accounts
- Revenue accounts must capture source and restriction type for proper reporting
- Expense accounts must support functional reporting: program, admin, and fundraising
- Net asset accounts replace equity and track cumulative results by restriction level
5
Recording Contributions and Grants
- Contributions are gifts with nothing of value given in return; exchanges are payments for services
- Record unconditional pledges immediately as revenue; wait on conditional pledges until conditions are met
- In-kind donations must be recorded at fair market value if they create assets or are specialized skills
6
Expense Allocation
- Direct costs are clearly traceable to one program; indirect costs benefit multiple areas
- Use reasonable, consistent allocation bases like square footage, FTE, or direct salaries
- Document your methodology in writing and apply it consistently year to year
7
Financial Statements
- Statement of Financial Position shows net assets by restriction level, not equity
- Statement of Activities shows changes in net assets and releases from restriction
- Statement of Functional Expenses is unique to non-profits and shows spending by function and type
8
Budgeting for Non-Profits
- Operating budgets cover the entire organization; program budgets focus on specific projects
- Build separate budgets for each fund to avoid planning to spend restricted money incorrectly
- Budget-to-actual reports help spot problems early and improve future budgeting accuracy
9
Internal Controls
- Segregation of duties is your strongest defense against fraud and errors
- Small organizations can involve board members or outsource functions for better controls
- Written policies document how financial tasks should be done and ensure consistency
10
Compliance Requirements
- Form 990 is due 5 months after fiscal year-end and becomes public record
- Most states require registration before soliciting donations from their residents
- Single Audit required when spending $750,000+ in federal awards annually
11
Grant Management
- Include indirect costs in grant budgets using your calculated indirect rate
- Track grant expenses in real-time using separate fund codes, not just at reporting deadlines
- Keep all supporting documentation organized by grant and month for easy retrieval
12
Payroll for Non-Profits
- IRS examines control, not titles, to determine employee vs. contractor classification
- Clergy are employees for income tax but self-employed for Social Security purposes
- Calculate fringe benefit rate by dividing total benefits by total salaries for accurate budgeting
13
Month-End and Year-End
- Bank reconciliations should be completed within 10 days of month-end to catch errors quickly
- Accruals and deferrals ensure revenue and expenses match the periods they belong to
- Written acknowledgments required for donations $250+ by January 31st or before tax filing
14
Software and Technology
- Choose software based on your fund complexity, grant tracking needs, and staff technical skill
- Integration between donor and accounting systems reduces duplicate entry and errors
- Board dashboards should be 1-2 pages with key metrics, charts, and brief narrative explanations
15
Course Conclusion
- Non-profit accounting is fundamentally about accountability and stewardship to stakeholders
- Identify your top three improvement areas and tackle them one at a time
- Good financial management creates transparency and enables mission focus
Non-Profit Compliance Requirements
Essential compliance deadlines and requirements to maintain your tax-exempt status
Annual IRS Filing
Form 990 Due Date: 15th day of the 5th month after fiscal year ends (May 15th for calendar year organizations)
- 990-N (e-Postcard): Gross receipts under $50,000
- 990-EZ: Receipts under $200,000 and assets under $500,000
- Form 990: Larger organizations
- Extension Available: File Form 8868 for automatic 6-month extension
Donor Acknowledgment Requirements
Written Acknowledgment Required for Donations $250 or More
- Due Date: January 31st or before donor files tax return
- Must Include: Organization name, donation amount or description, whether goods/services provided, and value of goods/services
- Quid Pro Quo Disclosure: Required when donor receives value over $75
State Requirements
Charitable Registration and Reporting
- Most states require registration before soliciting donations from residents
- Annual renewals typically due within 6 months after fiscal year end
- Many states accept Unified Registration Statement (URS)
- Some states have minimum thresholds before registration required
- Penalties for non-compliance include fines and loss of solicitation rights
Audit Thresholds
When Audits Are Required
- Single Audit: $750,000+ in federal awards
- State Requirements: Vary by state, often $250,000-$1,000,000 in revenue
- Grantor Requirements: Individual grant agreements may require audits
- Lender Requirements: Banks often require audited statements for loans
Payroll Tax Deposits
Critical Deadlines
- Monthly Depositors: By 15th of following month
- Semi-Weekly Depositors: Within 3 business days for most payrolls
- Form 941: Quarterly, due last day of month following quarter end
- Form 940: Annual federal unemployment, due January 31st
- W-2s and W-3: Due to employees by January 31st, to SSA by January 31st
