![]() ![]() The categories represented by the rows are often referred to as natural expenses, which organize expenditures based on the nature of the payment rather than its end goal. In this sample statement, the columns of the table represent the three categories of functional expenses. Here is an example of what the report might look like: The statement of functional expenses is a much more comprehensive breakdown of your nonprofit’s expenditures. However, the for-profit version typically only includes costs related to production, not management or selling. Some businesses compile a statement of costs of goods sold, which is somewhat similar in purpose to a nonprofit’s functional expense report. While each of these reports has a direct for-profit parallel-the income statement, balance sheet, and cash flow statement respectively-the statement of functional expenses is unique to nonprofits. Statement of cash flows, which shows how money moves in and out of your organization through operating, investing, and financing activities.Statement of financial position, which provides a snapshot of your nonprofit’s financial health by breaking down your assets and liabilities.Statement of activities, which categorizes your nonprofit’s revenue and expenses to give an overview of your organization’s transactions for a given year.The statement of functional expenses is one of four financial reports that your nonprofit should compile annually. Typically, the three categories of functional expenses are program, administrative, and fundraising expenses (which will be covered in more detail later). The nonprofit statement of functional expenses is a table- or matrix-style report that breaks down your organization’s expenditures into categories based on what purpose the money was used to accomplish. ![]() Request a Quote What is the nonprofit statement of functional expenses? Let’s get started with an overview of the statement of functional expenses and how it fits into your nonprofit’s financial management practices.Ĭontact the experts at Jitasa to compile your nonprofit’s statement of functional expenses.
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