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HomeMy WebLinkAbout03/19/2025 - Meeting Materials Salt Lake Arts Council Foundation Profit & Loss Budget vs. Actual July 2024 through February 2025 Jul'24-Feb 25 Budget $Over Budget Ordinary Income/Expense Income REVENUE CITY In-Kind SLC Dept DED Exp. 0.00 53,805.00 -53,805.00 In-Kind SLC Dept Salaries&Ben 0.00 1,349,037.00 -1,349,037.00 SLC Nondepartmental 1,000,000.00 1,000,000.00 0.00 Total CITY 1,000,000.00 2,402,842.00 -1,402,842.00 CONTRIBUTIONS Corporate 18,500.00 60,000.00 -41,500.00 Foundations 725,000.00 518,322.31 206,677.69 In-Kind 0.00 220,000.00 -220,000.00 Individuals 34,605.00 6,500.00 28,105.00 Total CONTRIBUTIONS 778,105.00 804,822.31 -26,717.31 EARNED INCOME Beverage Sales Alcohol 0.00 29,000.00 -29,000.00 Total Beverage Sales 0.00 29,000.00 -29,000.00 Commissions 2,030.00 6,000.00 -3,970.00 Other Fees 7,064.50 6,000.00 1,064.50 Rental Fees 4,630.00 3,000.00 1,630.00 Ticket Sales 20,000.00 30,000.00 -10,000.00 Vendor Fees 0.00 13,200.00 -13,200.00 Total EARNED INCOME 33,724.50 87,200.00 -53,475.50 GOVERNMENT GRANTS County 73,800.00 200,000.00 -126,200.00 Federal 0.00 40,000.00 -40,000.00 State 54,936.00 56,000.00 -1,064.00 Total GOVERNMENT GRANTS 128,736.00 296,000.00 -167,264.00 OTHER REVENUE Interest 17,413.46 30,000.00 -12,586.54 Miscellaneous Income 1,000.00 Total OTHER REVENUE 18,413.46 30,000.00 -11,586.54 Total REVENUE 1,958,978.96 3,620,864.31 -1,661,885.35 Total Income 1,958,978.96 3,620,864.31 -1,661,885.35 Gross Profit 1,958,978.96 3,620,864.31 -1,661,885.35 Expense EXPENSES Page 1 of 6 Jul'24-Feb 25 Budget $Over Budget General&Adminstrative Bank Fees 305.87 700.00 -394.13 Benefits 516.00 1,760.00 -1,244.00 Conference Fees 160.00 800.00 -640.00 Contracted Services 158,575.00 647,100.00 -488,525.00 Credit Card Fees 962.73 1,400.00 -437.27 Dues/Subscriptions/Publications 7,261.58 13,400.00 -6,138.42 Employee Screenings 0.00 200.00 -200.00 General Insurance 6,985.68 13,050.00 -6,064.32 In-Kind SLC Dept DED Expenses 0.00 53,805.00 -53,805.00 In-Kind SLC Dept Salaries&Ben 0.00 1,349,037.01 -1,349,037.01 Parking/Mileage 122.04 1,600.00 -1,477.96 Travel 9,793.10 36,000.00 -26,206.90 Utilities 4,960.33 12,000.00 -7,039.67 Total General&Adminstrative 189,642.33 2,130,852.01 -1,941,209.68 Program Expenses Advertising&Publicity 3,893.57 59,650.00 -55,756.43 Artist Commissions 1,050.00 4,200.00 -3,150.00 Beverages Purchased Alcohol 0.00 8,000.00 -8,000.00 Non Alcohol 0.00 6,000.00 -6,000.00 Total Beverages Purchased 0.00 14,000.00 -14,000.00 Equipment Rental 14,682.65 170,850.00 -156,167.35 Equipment Repairs&Maintenance 0.00 0.00 0.00 Food&Beverage 4,760.08 8,150.00 -3,389.92 Grant Expense Artist in the Classroom 21,000.00 21,000.00 0.00 Bloomberg 200,000.00 200,000.00 0.00 General Support 321,450.00 333,000.00 -11,550.00 Project Support 155,950.00 146,000.00 9,950.00 Total Grant Expense 698,400.00 700,000.00 -1,600.00 Graphics/Design Work 4,500.00 9,400.00 -4,900.00 Honoraria&Artist Fees 12,162.50 117,350.00 -105,187.50 In-Kind Goods&Services 0.00 220,000.00 -220,000.00 Mailing 431.55 600.00 -168.45 Meals 0.00 Merchandise 0.00 3,500.00 -3,500.00 Miscellaneous Charge 1,339.12 6,000.00 -4,660.88 Payroll Taxes Federal Unemployment Tax 46.92 FICA 1,768.90 Payroll Taxes-Other 0.00 11,528.00 -11,528.00 Page 2 of 6 Jul*24-Feb 25 Budget $Over Budget Total Payroll Taxes 1,815.82 1 -9,712.18 Permits&Licenses 0.00 34,530.00 -34,530.00 Postage 168.79 2,400.00 -2,231.21 Printing 4,916.33 22,900.00 -17,983.67 Salaries&Wages 23,122.80 145,550.00 -122,427.20 Security 807.74 56,000.00 -55,192.26 Supplies 9,075.73 12,522.31 -3,446.58 Unemployment 0.00 5,000.00 -5,000.00 Total Program Expenses 781,126.68 1,604,130.31 -823,003.63 Total EXPENSES 970,769.01 3,734,982.32 -2,764,213.31 Payroll Expenses 0.00 Total Expense 970,769.01 3,734,982.32 -2,764,213.31 Net Ordinary Income 988,209.95 -114,118.01 1,102,327.96 Net Income 988,209.95 -114,118.01 1,102,327.96 Page 3 of 6 Salt Lake Arts Council Foundation 2:47 PM Profit & Loss Budget vs. Actual 03/06/2025 July 2024 through February 2025 Accrual Basis %of Budget Ordinary Income/Expense Income REVENUE CITY In-Kind SLC Dept DED Exp. 0.0% In-Kind SLC Dept Salaries&Ben 0.0% SLC Nondepartmental 100.0% Total CITY 41.62% CONTRIBUTIONS Corporate 30.83% Foundations 139.87% In-Kind 0.0% Individuals 532.39% Total CONTRIBUTIONS 96.68% EARNED INCOME Beverage Sales Alcohol 0.0% Total Beverage Sales 0.0% Commissions 33.83% Other Fees 117.74% Rental Fees 154.33% Ticket Sales 66.67% Vendor Fees 0.0% Total EARNED INCOME 38.68% GOVERNMENT GRANTS County 36.9% Federal 0.0% State 98.1% Total GOVERNMENT GRANTS 43.49% OTHER REVENUE Interest 58.05% Miscellaneous Income Total OTHER REVENUE 61.38% Total REVENUE 54.1% Total Income 54.1% Gross Profit 54.1% Expense EXPENSES Page 4 of 6 %of Budget General&Adminstrative Bank Fees 43.7% Benefits 29.32% Conference Fees 20.0% Contracted Services 24.51% Credit Card Fees 68.77% Dues/Subscriptions/Publications 54.19% Employee Screenings 0.0% General Insurance 53.53% In-Kind SLC Dept DED Expenses 0.0% In-Kind SLC Dept Salaries&Ben 0.0% Parking/Mileage 7.63% Travel 27.2% Utilities 41.34% Total General&Adminstrative 8.9% Program Expenses Advertising&Publicity 6.53% Artist Commissions 25.0% Beverages Purchased Alcohol 0.0% Non Alcohol 0.0% Total Beverages Purchased 0.0% Equipment Rental 8.59% Equipment Repairs&Maintenance 0.0% Food&Beverage 58.41% Grant Expense Artist in the Classroom 100.0% Bloomberg 100.0% General Support 96.53% Project Support 106.82% Total Grant Expense 99.77% Graphics/Design Work 47.87% Honoraria&Artist Fees 10.36% In-Kind Goods&Services 0.0% Mailing 71.93% Meals Merchandise 0.0% Miscellaneous Charge 22.32% Payroll Taxes Federal Unemployment Tax FICA Payroll Taxes-Other 0.0% Page 5 of 6 %of Budget Total Payroll Taxes 15.75% Permits&Licenses 0.0% Postage 7.03% Printing 21.47% Salaries&Wages 15.89% Security 1.44% Supplies 72.48% Unemployment 0.0% Total Program Expenses 48.7% Total EXPENSES 25.99% Payroll Expenses Total Expense 25.99% Net Ordinary Income -865.95% Net Income -865.95% Page 6 of 6 Nonprofit Learning Center Let's Talk Money L17.2—.,1—OW ET'S TALK 'k - t Y� NONPROFIT FINANCE BASICS Before talking about money Roles Money is the fuel driving your organization forward, and so it is important that everyone plays a role in making sure you steward this resource well. Role Focus What this looks like Board chair Guides culture to ensure it • Pro-actively creates a culture that supports supports inclusive financial inclusive conversations (see below) conversation and decision- • Facilitates meetings in a way that involves making. everyone in decision-making. Treasurer Provides oversight on the • Ensures that the organization is using the financial systems. right tools (accounting software, bank accounts, bank relationships, credit cards, etc.) to support effective financial governance. • Provides leadership on financial policies and procedures. • Ensures that there is board learning and orientation in place to support participation. Executive Director Manages finances on a day-to- • Implements the financial tools in a way that is day basis. Provides feedback to efficient and effective. the board on how financial • Provides the board with the reports and systems are working. information they need. • Communicates key information to staff as a bridge between them and the board. Board member Ensures that the organization's • Reviews financial reports (at least Balance finances are achieving its Sheet and Income Statement) regularly. mission. • Participates actively in board discussions. • Seeks out learning and support to fill knowledge gaps and build confidence. Staff member Follows the policies and • Demonstrates compliance with policies. financial systems set by the • Asks questions when needed. board and Executive Director. ©2022 Nancy Bacon and Margaret E.Schulte.All rights reserved. 1 www.non profitlea rni ng.center Nonprofit Learning Center Let's Talk Money Financial goal Finally, before you dive into financial statements, it is important to know what your financial goal is. Your goal is to be able to answer these questions about your organization. Liquidity: Is there cash in the bank? Solvency:What are you worth? Profitability:Are you generating more money than you spend? Efficiency: How well do you use your money? Impact:Are you doing what you set out to do? The first three questions (liquidity, solvency, and profitability) are straightforward financial questions. You will be able to answer them by the end of this course. The answers to these questions should regularly be heard in various forms at board meetings. The last two questions (efficiency and impact) are more complicated. They integrate financial data with information about the result of your work. They are subjective based on your values and theory of change. A note about profitability: Determining the profitability of individual programs is a helpful exercise as you measure your efficiency. Learn more about how to do that here: http://www.nonprofitsustainability.orci/. Ten Minute Activity - Put a check next to the questions above you can answer. Circle the questions you cannot answer. Name one kind of information you would need to answer one of these questions. Plan how you could integrate one of these words into your board's discussion about finances. Start by choosing the word. Decide where it fits in the agenda. Plan your introduction of the idea. ©2025 Nancy Bacon and Margaret E.Schulte.All rights reserved. 2 www.nonprofitlearning.center Nonprofit Learning Center Let's Talk Money Financial Statements Balance Sheet Think of the Balance Sheet as a "snapshot" of your organization's financials at a single point in time. • It is also called a "Statement of Financial Position." • It communicates what the nonprofit owns and owes at one point in time. That means it shows the worth of the organization. What you need to know and what you need to watch WHAT TO KNOW WHAT TO ABC NONPROFIT WATCH Current means y u can BALANCE SHEET If you have a access or convert o cash SEPTEMBER 30,20XX high level of within 12 months. Receivable means Accounts ASSETS that the funds are Receivable or Assets are promised to you.An 20XX Last year Grants Receivable, it In order of Current assets organization following Cash and cash equivalents an accrual or modified $ 25,843 $ 29,843 means that a liquidity, or how i accrual accountinglot of your easily you can Investments 17,855 17,440 money is held turn them into Accountsrecerva a system recognizes 6,833 5,750 outside our this type of income. y Cash. J Grants receivable 5,467 2,602 Organization. V Promises to give Promises to Give are 18,751 12,144 These assets Prepaids and deposits also called Pledges. 3 284 1 743 urrent C are harder to Total Current Assets 78,033 69,5221 Assets turn into cash. and 1 86,839 84,839 divided by If most of your Buildingand Equipment,net °Net"means you reflect 1 190,745 189,176 Current assets are here, depreciation. Liabilities a lot Of your Promisesto Give,long-term 6,600 12,550 money is tied up Endowment Investments 23,203 21,959 Il equals the Current and not available $ 385,420 $ 378,046 Ratio.This in the short term. LIABI LITI ES AND NET ASSETS i ratio shows Current Liabilities liquidity.Your Accounts Payable A Line of Credit is a I 7,320 $ 5,530 current ratio $ Accounts flexible loan of a defined i should be Payable tend to Accrued Liabilities amount that an organiza- 13,220 12,421 more than 1.0. be bills to Lineof credit tion can access as needed) 20,000 0 vendors and Current portion of long-term debt 2,662 2,758 Utilities. Total Current Liabilities 43,202 20,709 Between the two years,the Accrued Long-term Debt,less current portion above J* 47,731 50,489 organization Liabilities tend Total Liabikties 90,933 71,198 accessed its Line of Credit. to be employee Net Assets commitments Without donor restrictions 251,115 255,724 like retirement I With donor restrictions 43,372 51,124 Note the and accrued i decrease in payroll, and even Your NetAssets are broken out by Total Net Assets 294,487 ♦ 306,848 Net Assets of principal restrictions.This is an accounting i $ 385,420 5 378,046 $12,361.This payments on a I standard rule unique to nonprofits. Current Ratio 2 3 is the same as loan due within a the deficit on year. the Income Statement. ©2025 Nancy Bacon and Margaret E.Schulte.ALL rights reserved. 3 www.nonprofitLearning.center Nonprofit Learning Center Let's Talk Money ABC NONPROFIT BALANCE SHEET SEPTEMBER 30, 20XX ASSETS 20XX Last year Current assets Cash and cash equivalents $ 25,843 $ 29,843 Investments 17,855 17,440 Accounts receivable 6,833 5,750 Grants receivable 5,467 2,602 Promises to give 181751 12,144 Prepaids and deposits 3,284 1,743 Total Current Assets 78,033 69,522 Land 86,839 84,839 Building and Equipment, net 190,745 189,176 Promises to Give, long-term 6,600 12,550 Endowment Investments 23,203 21,959 $ 385,420 $ 378,046 LIABILITIESAND NETASSETS Current Liabilities Accounts Payable $ 7,320 $ 5,530 Accrued Liabilities 13,220 12,421 Lineof credit 20,000 0 Current portion of long-term debt 2,662 2,758 Total Current Liabilities 43,202 20,709 Long-term Debt, less current portion above 47,731 50,489 Total Liabilities 90,933 71,198 Net Assets Without donor restrictions 251,115 255,724 With donor restrictions 43,372 51,124 Total Net Assets 294,487 306,848 $ 385,420 $ 378,046 Current Ratio 2 3 Ten Minute Activity Compare the information here with your own Balance Sheet. • Circle the information under"what to watch" on your Balance Sheet. Discuss the issue of the line of credit drawn here. What do you think is going on? ©2025 Nancy Bacon and Margaret E.Schulte.All rights reserved. 4 www.nonprofitlearning.center Nonprofit Learning Center Let's Talk Money Income Statement The Income Statement shows money a nonprofit spends and brings in over a period of time. • It is also called a "Statement of Activities" or "Profit or Loss Statement" (or just P&L). • It communicates the work of the organization. • An Income Statement often includes your budget, so you can compare the two documents for discrepancies. What you need to know and what you need to watch WHAT TO KNOW Support is butory in nature. No exchange ABC NONPROFIT of goods or S rvlceS. INCOMESTATEMENT Can be restri ted or SEPTEM BER 30,20XX unrestricted. INCOME YTD Actual YTD Budget Budget Variance 20XX Budget WHAT TO SUPPORT WATCH Individual donor contributions 75,636 64,375 11,261 87,000 Foundation grants/Acme Foundation 15,000 50,000 (35,000) 50,000 Revenue Foundation grants/other 25,000 35,000 (10,000) 40,000 Diversification. State contracts 29,956 24,000 5,956 35,000 You want to Sponsors 8,750 8,500 250 10,000 make sure you Special events 5,055 5,000 55 28,000 aren't depen- Revenue is other 1,027 1,000 27 2,000 dent on any one earned Total support 160,424 187,875 (27,451) 252,000 type of income.J income. It is REVENUE unrestricted. Admissions 28,758 28,000 758 38,000 Mem bersh i p fees 9,237 9,200 37 12,000 Sales of items 3,689 3,700 (11) 5,000 rThe exact Interest income 128 125 3 200 line items Other 165 170 (5) 500 depend on Total revenue 41,977 41,195 782 55,700 your Organization. Total support and revenue 202,401 229,070 (26,669) 307,700 EXPENSES Salaries,benefits,&taxes 141,359 138,750 2,609 185,000 Occupancy(rent,utilities) 24,686 24,911 (225) 34,000 Communication(phone,internet) 1,872 1,875 (3) 2,500 Functional Your goal is t Technology 1,936 1,875 61 2,500 Expenses have a positive Professional development 1,011 1,000 11 1,000 You are number,or Program expenses 11,087 18,050 (6,963) 24,000 required to track Excess,that Professional fees(CPA,attorney...) 10,659 11,250 (591) 15,000 expenses by contributes tc Supplies 5,749 6,205 (456) 8,000 type for the IRS your Workini f Printing 6,832 7,373 (541) 7,500 Form 990.This Capital and Insurance(liability/D&O) 3,386 1,264 2,122 2,000 Includes ability to saVE Fundraising(general) 1,243 1,200 43 1,500 program for future Fundraising(special event) 2,237 1,800 437 5,000 Services,admin, ro or fundraising. program Depreciation 2,138 2,138 0 2,850 J expansion, Other 567 500 67 1,000 asset purcha Notice how the 1 `es,or reserV S. Total expenses 214,762 218,191 (3,429) 291,850 deficit shows Excess(Deficit) (12,361) 10,879 (23,240) 15,850 up on the Balance Sheet. ©2025 Nancy Bacon and Margaret E.Schulte.All rights reserved. 5 www.nonprofitlearning.center Nonprofit Learning Center Let's Talk Money ABC NONPROFIT INCOM E STATEM ENT SEPTEMBER 30,20XX INCOME YTD Actual YTD Budget Budget Variance 20XX Budget SUPPORT Individual donor contributions 75,636 64,375 11,261 87,000 Foundation grants/Acme Foundation 15,000 50,000 (35,000) 50,000 Foundation grants/other 25,000 35,000 (10,000) 40,000 State contracts 29,956 24,000 5,956 35,000 Sponsors 8,750 8,500 250 10,000 Special events 5,055 5,000 55 28,000 Other 1,027 1,000 27 2,000 Total support 160,424 187,875 (27,451) 252,000 REVENUE Admissions 28,758 28,000 758 38,000 Mem b ersh i p fees 9,237 9,200 37 12,000 Sales of items 3,689 3,700 (11) 5,000 Interest income 128 125 3 200 Other 165 170 (5) 500 Total revenue 41,977 41,195 782 55,700 Total support and revenue 202,401 229,070 (26,669) 307,700 EXPENSES Salaries, benefits, &taxes 141,359 138,750 2,609 185,000 Occupancy(rent, utilities) 24,686 24,911 (225) 34,000 Communication (phone, internet) 1,872 1,875 (3) 2,500 Technology 1,936 1,875 61 2,500 Professional development 1,011 1,000 11 1,000 Program expenses 11,087 18,050 (6,963) 24,000 Professional fees(CPA, attorney...) 10,659 11,250 (591) 15,000 Supplies 5,749 6,205 (456) 8,000 Printing 6,832 7,373 (541) 7,500 Insurance(liability/D&O) 3,386 1,264 2,122 2,000 Fundraising(general) 1,243 1,200 43 1,500 Fundraising(special event) 2,237 1,800 437 5,000 Depreciation 2,138 2,138 0 2,850 Other 567 500 67 1,000 Total expenses 214,762 218,191 (3,429) 291,850 Excess(Deficit) (12,361) 10,879 (23,240) 15,850 Ten Minute Activity Tell a story about this organization. Use the data provided in the Income Statement to imagine what is going on. Challenge each other on any assumptions you make. Tie together the Income Statement and the Balance Sheet. For example, there is a deficit here of $12,361. Where does that show up on the Balance Sheet? ©2025 Nancy Bacon and Margaret E.Schulte.All rights reserved. 6 www.nonprofitlearning.center Nonprofit Learning Center Let's Talk Money Cash Flow Statement • The amount of cash and cash equivalents entering and leaving your organization. • You use a cash flow statement to ensure that you can cover your costs, including payroll. • Your cash flow statement is drawn from information on both your Balance Sheet and Income Statement. ABC NONPROFIT CASH FLOW STATEMENT 20XX JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC BEGINNING CASH 25,843 14,948 4,053 13,159 1,663 14,219 324 -14,571 23,534 34,140 48,844 40,949 CASH IN Individual donor contributions 5,000 5,000 5,000 5,000 25,000 2,000 2,000 2,000 5,000 8,000 8,000 15,000 Foundation grants-Acme Foundation 50,000 Foundation grants-other 1 20,0001 1 1 20,000 State contracts 2,916 2,917 2,917 2,916 2,917 2,917 2,916 2,917 2,917 2,916 2,917 2,917 © Sponsors 5,000 5,000 Special events 2,000 3,000 23,000 Admissions 3,167 3,166 3,167 3,166 3,167 3,166 3,167 3,166 3,167 3,166 3,166 3,169 Membership fees 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 Sales of items 416 416 416 416 416 416 416 416 416 416 416 424 Interest income 16 16 16 16 16 16 16 16 16 16 16 24 Other 42 42 42 42 42 42 42 42 42 42 42 38 Total cash available 12,557 12,557 32,558 12,556 37,558 9,557 9,557 61,557 35,S58 43,556 15,557 22,S72 CASH OUT Salaries,benefits,&taxes 15,417 15,417 15,417 15,417 15,417 15,417 15,417 15,417 15,417 15,417 15,417 15,413 Occupancy(rent,utilities) 2,833 2,833 2,833 2,833 2,833 2,833 2,833 2,833 2,8331 2,833 2,833 2,837 Communication(phone,internet) 2081 208 2081 208 2081 208 2081 208 208 208 208 212 Technology 208 208 208 208 208 208 208 208 208 208 208 212 © Professional development 1,000 Program expenses 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 Professional fees(CPA,attorney...) 1,200 1,200 1,200 1,200 1,750 1,200 1,200 1,200 1,200 1,200 1,200 1,250 Supplies 500 500 500 500 500 500 500 500 500 2500 500 500 Printing 600 600 600 600 600 600 600 600 6001 900 600 600 Insurance(liability/D&O) 1661 166 1661 166 1661 166 1661 166 166 266 166 174 Fundraising(general) 600 500 100 300 Fundraising(special event) 1000 1000 3000 Depreciation 237 237 237 237 237 237 237 237 237 237 237 243 Other 83 83 83 83 83 83 83 83 83 831 83 87 Totalcash out 23,452 23,452 23,452 24,052 25,002 23,452 24,452 23,4521 24,952 28,852 23,452 23,828 ENDING CASH 14,948 r 4,0531 13,1591 1,6631 14,219 324 -14,5711 23,5341 34,1401 48,8441 40,949 39,693 Show what you know What cash flows in and out do you notice related to fundraising in general? The organization expected to receive $50,000 from the Acme Foundation in August but only received $15,000 (according to the Income Statement). How do you think that impacted program expenses?What do you think about that? © What cash flows in and out do you notice related to the special event held in October? Ten Minute Activity • Name when in the year your organization experiences a burst of income and/or a burst of expense. • Describe your organization's strategy to manage through those bursts to ensure you have enough cash to pay your people and bills. If you don't have a strategy, pencil out what a potential strategy might be. ©2025 Nancy Bacon and Margaret E.Schulte.ALL rights reserved. 7 www.nonprofitlearning.center Nonprofit Learning Center Let's Talk Money Glossary of Terms These are the words that are most important for nonprofit leaders and board members to know and be able to use related to nonprofit financials. Your knowledge and comfort with these terms is essential to the financial health of your organization. Take time to practice using them in sentences related to your organization. Accounting method (cash vs. accrual):When you recognize revenue or expenses. Cash accounting recognizes money when paid or received; the accrual method recognizes money when the commitment is made or incurred. Modified accrual recognizes revenues when they become available and expenditures when they are incurred. Assets:What your organization owns or has the right to use. Audit:An independent examination of your financial records, accounts, transactions, accounting practices, and internal controls. A nonprofit typically conducts an audit if its budget exceeds $500,000 or if the organization is required to by a funder (such as the federal government). Board (role in financial leadership): Financial stewards of an organization. Every board member is responsible for governance and oversight. Budget:An organization's financial plan. Business plan:A written document that describes an organization's core objectives, activities, and methods for achieving its goals. Cash flow:The total amount of money being transferred into and out of an organization, which affects liquidity. Current ratio: Current assets divided by current liabilities. Current ratio is a measure of liquidity, or how quickly you can access your assets. This can also be called a working capital ratio. Debt: Money borrowed by one organization from another organization or company. IRS Form 990:A nonprofit corporation's annual required federal tax filing. Liabilities:What an organization owes to others. Liquidity: How quickly you can turn assets into cash. Net assets (called equity or retained earnings in for-profit companies): Money left over after all expenses are met (assets minus liabilities). Net assets represent net profits or losses that accumulate over time. True cost:The total of direct program costs and the portion of administration (or overhead) that apply to a program. Working capital: Current assets minus current liabilities. The portion of an organization's assets which is not invested in fixed assets or obligated to pay current liabilities but is available to fund day to day working needs. YTD:Year to date. ©2025 Nancy Bacon and Margaret E.Schulte.All rights reserved. 8 www.nonprofitlearning.center