A non-profit profit and loss statement is a financial report that shows the revenues, expenses, and net income of a not-for-profit organization over a specific period of time. It is essentially an income statement that provides insight into the organization’s profitability and financial performance. This template can help you create a clear and concise profit and loss statement for your non-profit organization, making it easier to track and manage your finances.
Non-profit organizations have a unique set of financial reporting requirements, and the profit and loss statement is no exception. While the basic principles are similar to those of a for-profit organization, there are some key differences. For example, non-profits typically do not have owners or shareholders, and their net income is not distributed to individuals. Instead, net income is reinvested back into the organization’s programs and services.
Revenue
The revenue section of the profit and loss statement lists all of the sources of income for the non-profit organization. This can include donations, grants, membership fees, and program service revenue. It is important to track all revenue sources separately so that the organization can see where its income is coming from.
Earned revenue is revenue generated from the sale of goods or services. Examples include program fees, membership dues, and sales of merchandise. Contributions are donations from individuals, foundations, and corporations. Grants are awards from government agencies or other organizations to support specific projects or programs.
Investment income is revenue earned from investments, such as interest on savings accounts or dividends on stocks. Other income can include any other sources of revenue, such as rental income or royalties.
Expenses
The expenses section of the profit and loss statement lists all of the costs incurred by the non-profit organization. This can include salaries, rent, utilities, and program expenses. It is important to track all expenses separately so that the organization can see where its money is going.
Salaries and wages are the costs of compensating employees for their work. Rent and utilities are the costs of maintaining the organization’s physical space. Depreciation and amortization are the costs of allocating the cost of long-term assets over their useful lives.
Program expenses are the costs of delivering the organization’s programs and services. This can include the costs of materials, supplies, and equipment used in the programs, as well as the costs of staff time spent delivering the programs.
Net Income
The net income of the non-profit organization is calculated by subtracting the total expenses from the total revenue. Net income can be used to fund the organization’s programs and services, or it can be saved for future use. It is important to track net income over time so that the organization can see its financial progress.
If a non-profit organization has a positive net income, it means that it has more revenue than expenses. This is a sign of financial health and sustainability. If a non-profit organization has a negative net income, it means that it has more expenses than revenue. This is a sign of financial distress and may require the organization to take corrective action.
