From an accounting perspective – net assets are the difference in what you own (assets) and what you owe (liabilities).                                             Assets - Liabilities  =  Net assets   Since the result of the equation is not called “net liabilities,” it’s clear that a positive...

Nonprofits have unique income principles.  For a donation to be considered tax deductible by the IRS, it cannot be a conditional gift.    Conditional gifts occur when a donor attempts to give a gift to the nonprofit but places their own stipulations on what it is to be used for.   In contrast, d...

Most people assume that the word nonprofit means that the organization cannot make a profit.   Nonprofit defined A nonprofit organization is one that has been organized and is operating under the code sections in the Internal Revenue Service allowing them to be exempt from taxes. Therefore, th...

I often get asked, how much should a nonprofit have in an emergency fund?  The term “emergency fund” is commonly used in individual finance, but it also translates to a nonprofit. The other phrases that can be used are operating reserves and unrestricted net assets.  Unrestricted net assets is a ...