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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. Nonprofit Statement of Functional Expenses Template.Purpose of the Statement of Functional Expenses.Categories of Functional Expenses for Nonprofits.What is the nonprofit statement of functional expenses?.In this guide, we’ll cover the basics of this report, including: The statement of functional expenses is one of the financial statements fundamental to nonprofit accounting. In addition to helping you draw actionable conclusions from financial data, these statements are required for your organization to comply with the Generally Accepted Accounting Principles (GAAP), as well as state and federal regulations for nonprofits. While for-profit organizations leverage accounting practices to maximize their profits, nonprofits like yours record and report on their finances to demonstrate that the funds donors and stakeholders contribute are being reinvested into the organization in order to further its mission.Ī key component of this accountability-focused approach to accounting is compiling financial statements, which are documents that summarize your nonprofit’s use of funds. Financial Reporting Accounting Basics For Executive Directors For Nonprofit AccountantsĪccountability is at the core of nonprofit accounting.