Overspending a grant budget can have significant financial implications for a nonprofit. Careful consideration needs to be made each time a nonprofit enters into a grant. Learn more about the various scenarios in which a nonprofit may be unable to use grant funds on costs that the organization thought were acceptable and what the organization should do.

Reasonable and Allocable Costs on US Government Agreements (member only)

Many nonprofits receive funds from the US government.  Often times, recipients of these government funds will be told that only “allowable” costs can be charged to their US government awards.  According to FAR Part 31.201-2, a cost is allowable only when it is reasonable, allocable, follows generally accepted accounting principles, and is compliant with the agreement (award) terms.

Managing a nonprofit’s grants and contracts is a multifaceted and complex task. Learn four best practices that any organization receiving grants should adhere to and the roles and responsibilities of the various staff and team members.   

Grants are a useful mechanism for funding nonprofits as they ensure both the donor and the nonprofit understand the purpose and use of the donation being provided. Learn more about the main types of grants and when each is warranted. 

How to Account for Membership Dues

Member benefits specified in membership agreements embody goods and/or services that a nonprofit has promised to transfer to members. These promises are deemed “performance obligations”, and the transaction price for each good/service must be accounted for when recording membership dues.

What Constitutes Fundraising Costs

Nonprofits are required to track and report expenses by three functional areas: program services, general and administrative, and fundraising. But what constitutes fundraising costs and how do these costs differ from development costs? Learn more about the definition of fundraising to help ensure your organization is accurately reporting, and not over-reporting, these expenses.

Best Practices in Nonprofit Budgeting

It’s important in the nonprofit world for organizations to develop and follow financial budgets. Because nonprofits typically operate with limited funds, have restrictions on how funds can be spent, and must publicly report their expenses, budgets play an important role in every nonprofit. Learn the best practices that nonprofits should consider before starting the budget process.

Nonprofit Budgeting Concepts and Processes  (member only)

Nonprofits operate with a limited amount of cash. And, similar to for-profits which have various product and service lines, nonprofits should budget and track revenues and expenses for multiple program service areas. However, before a nonprofit begins the budgeting process, there are key concepts and terms that all members of the organization should understand.

Internal Control: What is the COSO Internal Control Framework

The Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) established a model for evaluating internal controls for organizations. This model was adopted as the generally accepted framework for internal control, and it is widely recognized as the definitive standard against which organizations measure the effectiveness of their internal control systems. 

How to Account for Donated Goods & Services (member only) 

Many nonprofits receive donated goods and services in lieu of cash contributions.  Although this practice helps the nonprofit secure items and services that it may not be able to afford on its own, there are also accounting implications that the nonprofit must consider. Learn more about how to account for such items as well as the implications for receiving high-value assets.

How to Calculate Indirect Rates  (member only)

Many nonprofits develop indirect rates as a mechanism for allocating joint costs among multiple projects and donors. Learn more about what constitutes indirect costs and how to calculate indirect rates. And discover strategies on how to ensure you recover your indirect costs when faced with indirect caps on grants and contracts.

Managing Foreign Exchange Risk for Nonprofits (member only)

More and more nonprofits are operating and/or expanding internationally. Although this expansion is a welcome sign that the organization is growing and expanding services, it also creates a new set of problems -- how to mitigate foreign exchange exposure and prevent unnecessarily losses due to fluctuating foreign currency rates.