Non-Profit Finanical Policies

Non-profit organizations must follow a number of taxation, funding and budgetary policies. They often have to file specific paperwork to establish their yearly financial practices for the government.

Sources of Funding

Only a small portion of non-profits are devoted to charity efforts and similar causes. They will often receive some financial resources in the form of "public support." This outside aid may come from the government, granting agencies or other donation sources.

Federal Grants

If a non-profit organization is given federal grant money, it may undergo auditing of its financial policies. This can mean the introduction of a third party to evaluate those practices. Information on typical auditing procedures are provided by the Office of Management and Budget and the American Institute of CPAs.

Tax Requirements

As many non-profits are tax exempt, they must supply the IRS with a number of documents regarding their finances. This includes balance sheets, expense accounts, salary information as well as revenue statements.

References

• Critical Issues in Financial Accounting