Statement of Financial Position

The Statement of Financial Position is your nonprofit's balance sheet. It's a snapshot of your financial health at a single moment — usually the end of your fiscal year — showing three things: what you own, what you owe, and the difference between them.

Assets include everything of value: cash and investments, accounts receivable (pledges and grants owed to you), prepaid expenses, property, equipment, and any other resources. Liabilities include everything you owe: accounts payable, accrued expenses, deferred revenue (grants received but not yet earned), mortgages, and other obligations. The difference — assets minus liabilities — is your net assets, broken down into "without donor restrictions" and "with donor restrictions."

Unlike the Statement of Activities (which covers a period of time), the Statement of Financial Position is a point-in-time snapshot. Think of it as a photograph rather than a movie. It tells you where you stand right now, not how you got there. For that story, you need the Statement of Activities and the Statement of Cash Flows.

This statement answers the fundamental question: is your organization financially stable? Do you have enough assets to cover your obligations? Is your net asset balance growing over time?

Board members should review this statement at every meeting, paying particular attention to the breakdown of net assets. If total assets are $2 million but $1.8 million is restricted, the organization has far less flexibility than the headline number suggests. Lenders, grantors, and auditors all use this statement to assess your organization's creditworthiness and financial management.