My Skill Lab
AccountingBeginner

Nonprofit Accounting Basics

Fund accounting, restricted grants and donor reporting.

Taught by Pooja Adhikari · Chartered Accountant

What you'll learn

  • Explain how net assets and donor restrictions replace owners' equity
  • Design a chart of accounts with fund, programme and grant segments
  • Record restricted gifts, pledges and in-kind donations, including releases
  • Build a grant budget-versus-actual report that flags overspending
  • Allocate shared costs and prepare a statement of activities
  • Set up proportionate controls and a donor reporting calendar

About this course

Nonprofit Accounting Basics is a practical introduction to fund accounting for anyone who keeps the books, prepares reports or sits on the finance committee of a charity, NGO or foundation. You will learn how nonprofit accounting differs from business accounting, set up a chart of accounts that tracks funds and grants, and record restricted and unrestricted donations, pledges and in-kind gifts correctly. You will track grant budgets against actual spending, prepare the statement of activities and functional expense analysis, and map compliance and donor reporting duties from Form 990 to the Charities SORP. No prior nonprofit experience is needed, though a basic grasp of debits and credits will help.

Course content

7 lessons
  1. 1How Nonprofit Accounting Differs From Business AccountingStewardship over profit, net assets instead of equity, and the frameworks that govern nonprofit reporting.Preview
  2. 2Fund Accounting and a Nonprofit Chart of AccountsHow funds, programmes and grants are tracked through account segments so every transaction tells the full story.
  3. 3Restricted and Unrestricted ContributionsRecognising donor restrictions, handling conditional gifts and recording releases from restriction.
  4. 4Recording Grants, Pledges and In-Kind GiftsContribution versus exchange, pledges receivable, donated goods and services, and when to recognise each.
  5. 5Grant Tracking and Budget Versus ActualSetting up grant codes, monitoring spending against budget and spotting unallowable costs before the funder does.
  6. 6Nonprofit Financial StatementsThe statement of financial position, statement of activities, functional expenses and cash flows, read and prepared.
  7. 7Compliance, Controls and Donor ReportingAnnual filings, audits, internal controls for small teams and a calendar that keeps donors and regulators informed.