Advancement · Grants & Funding

Audited statements,
read in plain words.

A board member, grant writer or donor gets a set of audited statements and needs to know four things: where the money went, what it cost to raise, whether the bills can be paid and whether the year ended in the black. Copy ten figures from the statements. The guide works out the ratios that watchdogs and funders use, explains each in a sentence and points to the notes worth reading.

Read a yearWhat you get
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Included with Caveat Classroom and Whole-school licenses. Or get it in the Grant writer’s desk, $49 for 55 items.

Statements

The worked example is made up: a literacy nonprofit’s strong year after a deficit year, and an arts council spending 40 cents to raise each dollar. Saved on this device only.

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What you get

Advancement · Grants & Funding$12 · included with Classroom and Whole-school licenses

What you finish with
A record per year: organization, year, revenue, contributions, program, management and fundraising expenses, cash, liabilities due within a year, total assets and liabilities, and four parts of the report read. Works out total expenses, the program share, cost to raise a dollar, cash against current bills, liabilities against assets and the surplus or deficit, with a plain sentence for each and flags at common watchdog lines.
Who it is for
Board members, finance committees, grant writers and development staff at nonprofits and school foundations.
Format
Browser guide with a saved record per year. Prints one year with its reading, every year in a table or a blank worksheet; downloads a spreadsheet (.csv); exports and imports a file.
Access
$12 one-time, yours on every device you sign in on; the tool opens once you are signed in with it. Included with Caveat Classroom and Whole-school licenses. Also in the Grant writer’s desk ($49) and the Advancement Suite pass ($99), and 1 more bundle. Everything you type stays in this browser; nothing is sent to Caveat.
Where it lives
The Grants & Funding space in Caveat Advancement.
Support
Questions about access, an order or a correction: team@caveatacademic.com.

How to use it

  1. Open the audited or reviewed statements.
  2. Copy the ten figures.
  3. Read the sentence for each ratio.
  4. Read the four notes on the list.
  5. Add last year to see the trend.

Read a year

Where the numbers are

Where to find each numberNumberFound inRevenue, giftsStatement of activitiesProgram, management, fundraisingFunctional expenses statementCash, assets, liabilitiesFinancial position statementRestrictions, loansNotes to the statementsSame figures, publicForm 990, Parts VIII to XWhere to find each numberRevenue, giftsFound in: Statement of activitiesProgram, management, fundraisingFound in: Functional expenses statementCash, assets, liabilitiesFound in: Financial position statementRestrictions, loansFound in: Notes to the statementsSame figures, publicFound in: Form 990, Parts VIII to X
Read the notes before the ratios. A restricted gift, a building loan or a one-time grant can explain a number that looks wrong.

Program share and fundraising cost

The BBB Wise Giving Alliance standards ask that at least 65 percent of total expenses go to programs and that fundraising expenses be no more than 35 percent of related contributions. They are one watchdog’s lines, not law, and a young organization or a capital campaign can sit outside them for good reasons.

Liquidity

Since 2018, nonprofit statements under U.S. accounting standards include a note on liquidity and the availability of financial assets for general spending within a year. Read it with the cash figure: cash that donors restricted cannot pay this month’s payroll.

Sources

  1. BBB Wise Giving Alliance. Standards for Charity Accountability, standards 8 and 9 (give.org).
  2. Financial Accounting Standards Board. Accounting Standards Update 2016-14, Not-for-Profit Entities: presentation of financial statements (liquidity note, net asset classes, functional expenses).
  3. Internal Revenue Service. Form 990, Part VIII (revenue), Part IX (functional expenses) and Part X (balance sheet).
  4. National Council of Nonprofits. Financial literacy for board members: reading the financial statements (councilofnonprofits.org).

The worked example is made up. Ratios are a starting point for questions, not a rating; the notes and the auditor’s report explain the numbers. Nothing you type is sent to Caveat. Support: team@caveatacademic.com.