How your organization’s statement of activities can inform your fundraising efforts

Fundraisers don’t necessarily spend time in both their donor database and their organization’s accounting software. But, fundraisers often need to interact with board members, donors, and foundations and be able to provide information or answer their questions about your organization’s finances. For this reason, it’s important that you have access to your nonprofit’s statement of activities, and that you feel comfortable making sense of this financial document.

The statement of activities is a valuable resource that helps you understand a full financial picture of the organization, and because of that you can use it to prepare for informed conversations with stakeholders. Not only will this document give you insight into how savvy donors and prospective donors assess your organization, it can also help you evaluate and strengthen your fundraising efforts.

What is a statement of activities?
(revenues – expenses = change in net assets)

The statement of activities is generated directly from your organization’s accounting software as opposed to your donor management software. Your organization’s bookkeeper or accountant can provide you with copies.

Tip: If your organization uses both QuickBooks Online and Little Green Light, check out our newly upgraded integration with QuickBooks Online to increase the efficiency of your work and help you make the most of both systems.

A nonprofit’s statement of activities shows the organization’s operating results over a particular period of time (usually a fiscal year). When you look at the statement, you’ll see support (grants and contributions), revenue (fee for service, event income, merchandise sales), and expenses. It includes the actual amount as well as the amount budgeted, so you can see variances.

Examine your organization’s statement of activities from the past few years with the following questions in mind:

• • How do the actuals compare to the budgeted amounts? Does anything surprise you?
  • How many different sources of revenue do you see?
  • Does the organization appear to rely too heavily on a particular funding stream?
  • Do you see any patterns when you examine the statement of activities? For example, does one source of funding consistently fall short of the budgeted amount? Is there an event or other fundraising effort that requires a great deal of time but doesn’t bring in much money?

Your statement of activities might suggest to you that your organization is too reliant on a single revenue stream. It also may make sense to retire a particular fundraising event so that you can dedicate more time to your year-end appeal. Your statement of activities gives you important data that you can point to when suggesting these potential changes to colleagues or board members. That way, you can all use objective information from the statement to assess current fundraising efforts and determine if or how your fundraising plan should be modified to reflect changes in priorities.

If you’re an executive director at your organization, you will already be familiar with the statement of activities and have access to it. If you’re in a fundraising role and you don’t currently see a statement of activities, you can share this blog post with your executive director. Request that they walk you through the statement of activities so you can approach your work from a more informed position. The statement of activities is a document that is regularly provided to board members, so there shouldn’t be any barrier to providing you with a copy.

Conclusion

The statement of activities contains a wealth of information that you can use to gain a stronger understanding of the organization’s financial health and stability. These insights will enhance your fundraising efforts. And, you’ll be prepared to have informed conversations with funders as they consider supporting your mission.