The National Council of Nonprofits is a network of not-for-profit organizations and state associations, and provides many excellent resources on its website. Interested readers can check out this column’s April 2019 review at https://tinyurl.com/yas9weja. This month’s column reviews two more organizations that present a variety of materials of benefit to CPAs and the organizations they represent.
ANAFP
The Association of Nonprofit Accountants & Finance Professionals (ANAFP, https://www.anafp.org) is an association of professionals who work in the field of nonprofit accounting and finance including CFOs, controllers, finance directors, accountants, and board members. ANAFP’s activities include keeping members informed on accounting standards and regulations, as well as the availability of new systems and other resources. Although some of the website resources are restricted to members, there are still several useful publicly available items for CPAs who are new to nonprofit accounting, as well as for sharing with nonprofit clients and organizations. Membership is not free, but it is relatively low cost and may be of value for CPAs who have sufficient interaction with nonprofits.
ANAFP’s “Guide to Understanding Nonprofit Financial Statements” is promoted on the homepage, and also linked under Professional Resources on the main menu bar (https://tinyurl.com/y6da2fm3). It is a must-see, downloadable 12-page PDF that provides descriptions and simple examples of the specific nonprofit financial statements: statement of financial position, statement of activities, statement of cash flows, statement of functional expenses, and notes to the financial statements. A related article, “Fund Accounting: What Is it and How Does it Work?” (https://tinyurl.com/4n979p4w) explains how nonprofits use separate funds to focus on accountability, in contrast to for-profit organizations.
Many free resources provide practical guidance, such as “Internal Controls: What Is the COSO Internal Control Framework?” (https://tinyurl.com/4h8f6bmh), which presents a very nice and sufficiently detailed description of the COSO model for evaluating internal controls, specifically discussing the control environment, risk assessment, control activities, information and communication, and monitoring. “Common Internal Controls for Nonprofits” lists several common-sense procedures for handling cash, which may serve to spark a conversation (https://tinyurl.com/2jrznahy).
There are several tax-related resources that are particularly helpful for the way they are presented and may be easier to find than on the IRS website (see the sidebar, More Nonprofit Tools). “Public Charity vs Public Foundation: Key Differences” (https://tinyurl.com/2yvs3m4p) provides a table comparison of several factors, such as primary function, tax advantages for donors, and examples. “IRS Public Support Test: What Is it and How Is it Calculated” (https://tinyurl.com/2hxd2979) explains the public support test that nonprofits must pass to be classified as a public charity. “Which U.S. IRS Tax Form Should Your Nonprofit File” (https://tinyurl.com/2pbfv62z) is a quick listing of the various Forms 990 and other information.
CPAs in public practice might be particularly interested in ANAFP’s “Directory of Nonprofit Accounting, CPA, and Bookkeeping Firms” at https://tinyurl.com/36tct4m2, which lists over 500 service provider firms. CPA firms can be listed in the directory by joining the ANAFP as members. ANAFP members can also access the complete membership directory.
Nonprofit Financial Commons
The Nonprofit Financial Commons (NFC, https://nonprofitfinancials.org) provides financial best practices information and tools to support nonprofit leaders with strategic planning and actions, with, articles, webinars, research, and tools. A large portion of the materials are created by the organization’s leadership and staff. The NFC website is also used as a portal to connect to partners’ sites with additional information. All materials on the website are publicly available, and membership is free.
The “Resources” section of the NFC website (https://tinyurl.com/3pku8x44) provides easy access to materials and can be searched by a long list of topics as well as a keyword feature. A timely example includes “12 Urgent Financial Action Steps for Nonprofits: A 2025 Checklist” (https://tinyurl.com/432nec5k), which identifies activities that are always important, but have become particularly urgent in the current environment, such as monitoring cash flows and liquidity, identifying the timing and necessity of expenses, reviewing all contracts, and renewing and expanding professional networks. On a related note, “Cash Flow Toolkit” (https://tinyurl.com/mvhhke5t) highlights the Wallace Foundation toolkit series (see the sidebar) and provides links to further resources, such as a downloadable Excel cash flow projection worksheet created by BDO FMA.
Nonprofit Financial Commons https://nonprofitfinancials.org
The NFC resource collection includes a large number of collated webinar recording and resource lists, with downloadable slides and transcripts for the videos, along with links to outside resources. For example, the “Survive a Chaotic 2025” webpage (https://tinyurl.com/y9y9jcvk) presents a 2-hour video titled “What to Watch and Do as Your Nonprofit Enters a Chaotic 2025: A Convening of Financial Leaders.” The related materials address nonprofit organizational resilience, slack, agility, and research into declines in donor participation.
“Nonprofit Ratios” (https://tinyurl.com/89k9ah3j) includes a 1-hour video titled “Exploring the New World of Nonprofit Financial Ratios: A Guide to Using Ratios as Financial Leverage” and links to external guides to calculating financial ratios, such as Jitasa Group (see the sidebar). “Anatomy of the Nonprofit Starvation Cycle: An Analysis of Falling Overhead Ratios in the Nonprofit Sector” is a research report that reviews 25 years of data and indicates a trend of increasing fundraising costs being offset by decreases in administrative expenses, such as nonexecutive staff wages and professional fees paid to accountants, lawyers, and professional fundraisers (https://tinyurl.com/2v9zmu59).
“Nonprofit Audit Guide 2024” (https://tinyurl.com/2s3m66xh) begins with “Audits: The Brewing Storm,” which addresses the challenges for nonprofits in not only contracting with an available audit firm, but also budgeting for the increases in audit fees, both of which are affected by the “pipeline” issue. The archived video is “The Nonprofit Audit Guide 2024: What’s New and What it Means to You.” Linked resources include the National Council of Nonprofits’ Audit Guide (see the sidebar) and interactive map of “State Law Nonprofit Audit Requirements” (see the sidebar). There is also a handy downloadable Microsoft Word format “Request for Proposal” template for audit services.
More Nonprofit Tools
- ▪ IRS Charities and Nonprofits, https://tinyurl.com/3p9ss694
- ▪ Jitasa Group Financial Ratios Calculators, https://tinyurl.com/3uf746wm
- ▪ National Council of Nonprofits Audit Guide, https://tinyurl.com/3j9vs6w3
- ▪ State Law Nonprofit Audit Requirements, https://tinyurl.com/3xbp97my
- ▪ Wallace Foundation Strong Nonprofits Toolkit, https://tinyurl.com/2x2d7t63
