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The objectives of
financial reporting for nonprofit organizations are to
provide information to current and potential resource
providers and others in assessing (a) the services a
nonprofit organization provides and its ability to
provide those services and (b) how management has
discharged its stewardship responsibilities, as well as
providing information about (c) the organization’s
economic resources, obligations, and net resources and
(d) the effects of transactions, events, and
circumstances that change those resources (that is the
organization’s performance or service efforts and
accomplishments). More specifically, nonprofit financial
reporting objectives are to:
- Communicate the
methods resources have been used to meet the
organization’s objectives and external requirements
- Identify an
organization’s principal programs and their costs
- Disclose the degree
of control exercised by donors and funding sources
over use of resources
- Help the user
evaluate the organization’s ability to carry out its
fiscal objectives
- Provide relevant
information to meet the common interests of donors,
members, creditors, and others who provide resources
to not-for-profit organizations
Groups that are
particularly interested in the financial information of
a nonprofit organization include:
- Funding sources and
contributors to the organization
- Regulatory agencies
- Governing boards
(board of trustees or directors)
- Beneficiaries of the
services rendered by the organization
- Employees
- Creditors and
potential creditors
- Constituent
organizations: for example, a local chapter of a
national organization
Client references
available upon request
Links of Interest
Nonprofits:
Internet Nonprofit Center
Information for and about Nonprofits
http://www.nonprofits.org/
Internal Revenue Service
http://www.irs.ustreas.gov
Forms and instructions
http://www.irs.gov/formspubs/index.html
State of Michigan -
Attorney General
License to Solicit - information
and forms
http://www.ag.state.mi.us/
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