The core statements
Three statements do most of the work for a nonprofit:
- Statement of Activities — the nonprofit version of a P&L. It reports revenue and expenses for the period, broken out by net asset class (with and without donor restrictions), so readers see not just the surplus or deficit but where restricted money came from and went.
- Statement of Financial Position — the nonprofit's balance sheet. Assets minus liabilities equals net assets (not 'owner's equity,' since no one owns a nonprofit), split into restricted and unrestricted.
- Statement of Functional Expenses — expenses categorized by function: program, management/general, and fundraising. It's how donors and watchdogs judge how much goes to mission versus overhead.
Why the names (and framing) differ
The vocabulary matters here, and using the business terms is a tell that the books aren't set up for a nonprofit. A nonprofit doesn't have 'profit' or 'equity' — it has a change in net assets and net assets. Revenue and expenses are reported through the lens of donor restrictions, because the central question isn't 'did we make money?' but 'did we steward restricted money correctly?'
Getting this framing right is what makes statements audit-ready and credible to grantmakers — and it flows directly from doing real fund accounting underneath.
Producing them without the manual grind
These statements are only as trustworthy as the fund tracking beneath them. If funds live in a spreadsheet that's reconciled to the bank once a month, the statements inherit that lag and risk.
Holdings keeps fund accounting inside the bank account, so the data that feeds a Statement of Activities or Financial Position is current and already matched to the cash — restricted and unrestricted balances are tracked as money moves. Nonprofit statements are part of the $25/mo plan; the verified nonprofit profile and directory listing are free.
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Frequently asked questions
What's the nonprofit equivalent of a profit and loss statement?
The Statement of Activities. It reports revenue and expenses for the period and shows the change in net assets — broken out by donor restriction — rather than a 'profit.'
What's the difference between a balance sheet and a Statement of Financial Position?
They're structurally similar, but a nonprofit's Statement of Financial Position ends in net assets (split into with- and without-donor-restrictions) instead of owner's equity, because a nonprofit has no owners.
Does Holdings produce nonprofit financial statements?
Yes. On the $25/mo plan, Holdings generates nonprofit statements like the Statement of Activities and Financial Position from fund accounting that's native to the account, so the numbers are already matched to the bank.