FUND ACCOUNTING FOR NONPROFITS

Money coming into your organization contributes to what you own or who pays for expenses

T
CONTRIBUTIONS WITH DONOR RESTRICTIONS
,__________ CONTRIBUTIONS WITH CONTRIBUTIONS EARNED REVENUE
WITH DONOR DONOR RESTRICTIONS, WITHOUT Fee for service, social
enterprise activity, government
RESTRICTIONS, SUBJECT TO SPECIFIED DONOR contract income, renting out
IN PERPETUITY PURPOSE AND/OR TIME RESTRICTIONS your parking lot ... the list goes
Such as an invested The age-old nonprofit hurdle: Contributed income on. A nonprofit can use this
donations only available for that a nonprofit can use money at its discretion.
endowment or land owned however it thinks is
by a conservancy. This isn't WITH DONOR
certain purposes or paid in the most effective.
relevant for all nonprofits. RESTRICTIONS, future.
IN PERPETUITY

INVESTMENT INCOME NET ASSETS RELEASED

Some permanent gifts also restrict the use of After fulfilling specific tasks and
the investment income generated (like a spending money in a specific
scholarship fund). Under UPMIFA, the board time frame, or receiving
must actively designate how unrestricted operating pledge payments,
investment income is to be used. -...1......__ temporarily restricted money
gets "released" from restriction.
BOTTLE: BOARD
ICE: PLEDGE OR GRANT DESIGNATED RESERVE
RECEIVABLES WITH NOR Readily useable? Depends
on how it is reserved.
Pledges, Promises to give, Unpaid RESTRICTIONS, OTHER
Contributions. All of these are time
restricted until they are paid, even
pledges for general operations.
ICE: EARNED
REVENUE
WITHOUT
RECEIVABLES DONOR
Readily useable? Not until
you're paid... (may be a part of .... RESTRICTIONS
unrestricted liquid net assets). EXPENSE
WITHOUT To pay e><penses.
ROCKS, PROPERTY DONOR
RESTRICTIONS
AND EOUIPMENT
Readily useable? We await the
day our office chairs are an
acceptable form of payment!
By Anne Freiermuth, Mission Math and Hannah Woods. Adapted from Nonprofit Finance Fund.