Lenora Williams: Posted on Tuesday, September 27, 2011 11:06 PM

Capital - money available for an organizations use in business transactions.

Capital projects - purchase or lease of a building; renovation (change in physical space i.e. a

building/facility) or construction project; relocation or increase in number of sites, large scale

equipment purchases (for example equipment cost exceeding $15 thousand dollars).

Dollar size of Capital projects:

Minor - often capital project items less than < $5,000 (five thousand dollars)

Major - often capital project items more than > $15,000 (fifteen thousand dollars)

Capital improvements-A facility or equipment upgrade (this does not include maintenance and repair work) - the capital improvement items must have a life span of more than one year

Dollar size of Capital improvements:

Minor - often capital improvement items less than < $5,000 (five thousand dollars)

Major - often capital improvement items more than > $15,000 (fifteen thousand dollars)

(more to come on depreciation, capitalization and Statements of Cash Flow - just too much info for now)

Capital campaign - a fund raising drive that excludes a nonprofits operating budget and is only for the

purpose of raising money for a facility or a for large scale equipment purchases - these funds can be raised to create a nonprofit endowment fund or to increase a nonprofits unrestricted reserve funds.

Special note:

What is a nonprofit Endowment?

A financial asset donation made to a non-profit group or institution in the form of investment funds or other

property that has a stated purpose at the bequest of the donor. Most endowments are designed to keep the

principal amount intact while using the investment income from dividends for charitable efforts

Read more: http://www.investopedia.com/terms/e/endowment.asp#axzz1ZDqEzX2S

What are nonprofit Reserves?

The portion of unrestricted net assets that are available for use in emergencies to sustain financial operations in

the unanticipated event of significant unbudgeted increases in operating expenses and/or losses in operating revenues

Read more: http://www.nccs2.org/wiki/index.php?title=Nonprofit_Operating_Reserves

Lenora Williams: Posted on Sunday, October 09, 2011 10:34 AM

More Nonprofit finance lingo …What are the diff acctg systems- fixed assets & depreciation

Types of Nonprofit accounting systems:

Accrual–items incurred during an accounting period in which payment is postponed i.e. accrued salaries (sick leave, vacation …), and accrued rent payable (paid in advance as deposits)

Accrual is an accounting method that measures the performance and position of a company by recognizing economic events regardless of when cash transactions occur. The general idea is that economic events are recognized by matching revenues to expenses (the matching principle) at the time in which the transaction occurs rather than when payment is made (or received). This method allows the current cash inflows/outflows to be combined with future expected cash inflows/outflows to give a more accurate picture of a company's current financial condition.

Read more: http://www.investopedia.com/terms/a/accrualaccounting.asp#ixzz1aIzvYwQd

Cash– The receipt and disbursement of dollars/money, no postponements, no monies deferred, cash in – cash out

Only record income when you actually receive it in the door. So, if you receive a pledge letter from a donor or foundation, you only count the money when you actually receive the check. The same thing with expenses, you only record expenses when you actually write the check to the vendor- not when you receive the bill, it sounds like common sense right? Why wouldn't everyone use this method? Well, not all nonprofits use this method because it can distort your revenue and expenses.

Read more: http://nonprofitsos.blogspot.com/2008/08/nonprofit-accounting-cash-vs-accrual.html

Fixed assets & what is depreciation?

Fixed assets – the net worth of the physical items a corporation owns which cannot easily be converted to cash. Like what? Property, building, improvements and equipment

Depreciation – Non cash expense associated with assessing and reducing a fixed assets usually “indicated in an annual table over fixed period of time (5 , 10 15 years)” book value due to general wear and tear over its useful life as defined by specific accounting GAAP (General Accepted Accounting Principles) depreciation schedules provided by CPA firms. Depreciation is an approximate dollar amount that you would need to replace the fixed asset or make new improvements to if the item were to disappear or receive unexpected damage.

Lenora Williams: Posted on Friday, July 08, 2011 11:45 PM

Earned and Contributed Income differences:

Definition of Earned Income

• Government grants and contracts, HRSA, Ryan White, Head start,...

• Fee for service (3rd party reimbursements i.e. Medicare, Medical & Patient fees)

• Service contracts

• Interest, investment income

• Rental Income (equipment property)

• Business income

Definition of Contributed Income

• Fundraising dollars

• Pledges, donations & gifts

• Planned gift giving like; bequests, direct mail , phone banks, ...

• Membership dues

• Foundation funds

• Corporation funds

• Church & Civic Group funds

Lenora Williams: Posted on Friday, September 16, 2011 5:56 PM

Nonprofit Finance 101 (1st edition) – What does that financial term mean?

Assets – an item of current or future economic benefit to an organization –i.e. cash, short term investments, accounts receivables, grants receivables, inventories, prepaid expenses, long term investments, owned; buildings, furniture, equipment, and vehicles

Liability – items owed and claims against the organizations assets i.e. accounts payable, accrued salaries and benefits, accrued payroll taxes, deferred revenue, lines of credit, construction loans, short-term payable notes, and all long term debt

Capital (working capital) – money available for an organization’s use in business transactions– current assets less current liabilities – the amount of liquidity an organization has at its disposal – i.e. unused line of credit and cash available after all the organization’s fiscal obligations are met

Contingency – an amount budgeted to cover unexpected hard costs or soft costs – usually a percentage of total anticipated or actual expenses.

GAAP –Generally Accepted Accounting Principles – a widely accepted set of rules, conventions standards, and procedures for reporting financial information, as established by the Financial Accounting Standards Board