Statement of Activities Nonprofit | Sage UK

You probably embarked on your nonprofit journey motivated by social values, but it’s crucial to address the financial aspects of these missions as well. One of the most important reports in nonprofit accounting is the statement of activities.

Nonprofits have a unique way of operating, and nowhere is this more apparent than when you do your financial reporting.

Your peers in the for-profit world have no choice but to focus on profit and loss reporting, but for you the prime concern is tracking how effectively resources are being applied to the mission.

One of the key documents to help you make that call is the statement of activities.

It lists crucial financial KPIs for a specific period, such as revenue, expenses and overall financial performance. You could say it’s really a nonprofit income statement.

In this article, we’ll elaborate on the purpose of the statement of activities, describe how it’s structured, and explain why it’s so important for transparency and planning.

Here’s what we’ll cover:

What is a statement of activities?

A statement of activities is a financial document nonprofits use to report performance over a defined period.

It details how your organisation’s resources have changed, covering funds raised, expenses paid, and the resulting net change in assets.

It parallels the income statement used by for-profit businesses, but tracking how well you’ve fulfilled your mission, rather than focusing on profit.

Although there are similarities in profit-and-loss elements, nonprofits must follow different rules and reporting structures.

For example, nonprofits record incoming funds only after meeting donor conditions, whilst for-profit companies can recognise revenue as soon as a sale is complete.

Nonprofit expenses also tend to vary according to each programme’s purpose.

For instance, an environmental conservation mission could include forestry, wildlife preservation, or educational initiatives.

By contrast, for-profit organisations can often categorise expenses in broad buckets like Sales, General and Administrative (SG&A), and Cost of Goods Sold (COGS) across several product lines.

Key features of a nonprofit statement of activities

Just as an income statement has several standard components that outline a for-profit organisation’s financial health, a nonprofit’s statement of activities tracks revenue, expenses, and net assets to show your organisation’s overall position.

Here’s what each category includes:

1. Revenue reporting

Chances are you receive multiple revenue streams.

If that’s the case, your stakeholders (donors, grantors and regulators) will appreciate being able to see how each of those sources contributes to the mission.

The standard categories of revenue sources are:

Donations

Private contributions in cash from individuals or organisations.

In-kind donations

Non-cash gifts such as materials, venues or volunteer labour in support of your campaigns and operations.

Grants

Funds awarded by governments, foundations, or corporations. Often for specific programmes.

Programme service revenue

Income generated from services aligned with your mission, such as tuition fees, ticket sales or workshop fees.

Membership dues

Fees paid by your supporters in exchange for privileges, such as newsletters, information, contacts, or access to events.

Investment income

Earnings from surplus capital invested by your organisation.

Separating each stream by source also clarifies whether different donor conditions are applicable (e.g. unrestricted, temporarily restricted, or permanently restricted).

These conditions determine how each category of funds can be used, helping stakeholders see whether resources are aligned with donor intentions and organisational goals.

2. Expense categorisation

Some aspects are not just helpful, but a legal requirement.

For example, among the nonprofit reporting standards laid down by the Financial Accounting Standards Board is FASB 117, which calls for a functional classification of expenses.

By “function” they mean the reason any expenses were incurred, such as management fees, or the costs of providing programme services and fundraising activities.

This functional categorisation highlights how resources support the mission, and lets donors gauge whether spending is within reasonable limits.

For example, donors often check how much is spent on programme services compared to administrative or fundraising activities to ensure their contributions are being used effectively.

A clear breakdown of expenses also helps demonstrate your organisation’s efficiency and commitment to mission-driven activities.

3. Change in net assets

The difference between total revenue and total expenses is known as the change in net assets.

A surplus points to growth potential and the capacity to expand or improve programmes, whilst a deficit suggests the need to adjust spending, boost fundraising, or explore new revenue streams.

The final figure offers a snapshot of your nonprofit’s financial trajectory, guiding decisions for the next reporting period.

What the statement of activities means for nonprofits

The primary purpose of the statement of activities is to satisfy regulatory requirements, such as Generally Accepted Accounting Principles (GAAP) and Form 990 for the IRS.

However, the benefits of being transparent in your financial activities go much deeper.

If donors, grantmakers and regulatory bodies can clearly see how much revenue you generated, where it came from, and how it was spent, that demonstrates responsible financial management, which builds trust.

Donors gain confidence in knowing their contributions have made a meaningful impact, which encourages continued or increased support.

And internally, by analysing revenue sources and spending patterns you can identify which programmes are thriving, which areas need more funding, and where you have inefficiencies.

This allows you to mitigate risks and seize opportunities, redirecting funds to the initiatives that most effectively advance your mission.

Ultimately, the statement of activities affirms your organisation’s long-term sustainability, because good planning and financial accountability are a strong basis for attracting new donors.

When and where do nonprofits publish the statement of activities?

Nonprofits are required to file Form 990, with the IRS by the 15th day of the 5th month after the end of their fiscal year.

You therefore need to gather the necessary information well before that and publish it in your statement of activities.

This gives you and your stakeholders time to spot discrepancies and correct errors if necessary.

Although both documents hold a lot of the same information, the statement of activities presents nonprofit financial data in a format suitable for internal management and stakeholders.

Form 990 does not have to adhere to GAAP standards and contains additional information which, whilst relevant to the IRS, may be confusing for many of your stakeholders.

Failure to file Form 990 on time can result in penalties, and if missed for three consecutive years you will have your nonprofit tax-exempt status revoked.

You can publish the statement of activities on your website, in your annual report, or share it directly with your donors and any grant-making organisations you depend on.

Nonprofit statement of activities example

The largest nonprofits in the US can accumulate annual contributions totalling billions of dollars, but the statement of activities breaks the figure down into just a few lines.

Here is an example from Feeding America:

Statement of activities, nonprofit example: Feeding America

Let’s extract key datapoints from the document (Note: Figures are in thousands of dollars):

1. How much revenue did they attract in 2023?

	2023
	Without Donor Restrictions
Total public support ($)	4,791,515
Total public support and revenue ($)	5,141,173

It’s common for nonprofits to refer to the proceeds of fundraising as revenue, but Feeding America happens to distinguish between income from business activities (revenue) and income from public support (fundraising).

The two figures gave a combined total of US$5.154 billion in 2023.

However, it so happens that public support accounted for most of their income, US$4.908 billion, equating to 95% of the total:

It was a similar story in 2022, when public support accounted for 96.5% of the US$4.479 billion total that year:

	2022
	Without Donor Restrictions
Total public support ($)	4,186,398
Total public support and revenue ($)	4,478,026

2. Where did the funds come from?

	2023			2022
Without Donor Restrictions	With Donor Restrictions	Total	Without Donor Restrictions	With Donor Restrictions	Total
Operating activities:
Public support and revenue:
Public support:
Individual contributions	$149,969	$29,852	$179,821	$160,298	$50,862
Corporate contributions	74,348	62,775	137,123	66,008	57,965
Foundations	785	5,672	6,457	1,740	1,227
Corporate promotions	36,816	18,192	55,008	34,903	27,220
Total fundraising	261,918	116,491	378,409	262,949	137,274
Donated goods and services	4,529,597	–	4,529,597	3,923,440	–

Breaking down the US$4.9 billion total for public support, we learn that:

The largest item was “donated goods and services” (US$4.5 billion).

None of the donated goods were subject to restrictions.

This is because Feeding America’s main activity is collecting donated food—and nobody insists on conditions when they place food in a collecting bin!

The organisation carefully logs the types of foods donated and every year conducts a survey of prices so it can calculate the full value.

3. Wasn’t total income US$5.154 billion?

Yes!

We still must add the revenue from business activities:

	2023			2022
Without Donor Restrictions	With Donor Restrictions	Total	Without Donor Restrictions	With Donor Restrictions	Total
Total public support	4,791,515	116,491	4,908,006	4,186,389	137,274
Revenue:
Food procurement revenue	235,106	–	235,106	147,074	–
Member fees	4,926	–	4,926	5,285	–
Conference fees	1,153	–	1,153	391	–
Other revenue	2,135	–	2,135	3,274	–
Investment income	2,934	–	2,934	–	3
Net assets released from restrictions	103,404	(103,404)	–	135,613	(135,613)
Total public support and revenue	5,141,173	13,087	5,154,260	4,478,026	1,664

Starting from total public support of US$4.908 billion:

We can add approximately US$235 million from food procurement revenue (possibly resale of high-quality donated items).

Then there’s roughly US$11.2 million from membership fees, conference fees and investments.

The US$103 million in “net assets released from restrictions” doesn’t appear in total revenue because it’s already part of the US$4.908 billion total public support.

4. So where did that leave Feeding America at the end of the period?

Expenses:

	2023			2022
Without Donor Restrictions	With Donor Restrictions	Total	Without Donor Restrictions	With Donor Restrictions	Total
Program services:
Member services	133,368	–	133,368	120,570	–
Food procurement	4,745,873	–	4,745,873	4,058,661	–
Public awareness and education	110,153	–	110,153	112,703	–
Policy and advocacy	17,632	–	17,632	15,950	–
Programs	56,813	–	56,813	48,488	–
Research and analysis	24,624	–	24,624	12,669	–
Total program services	5,088,463	–	5,088,463	4,369,041	–
Supporting services:
Management and general	24,416	–	24,416	17,143	–
Fund development	64,207	–	64,207	64,885	–
Total supporting services	88,623	–	88,623	82,028	–
Total expenses	5,177,086	–	5,177,086	4,451,069	–

Working against total income were Feeding America’s various outgoings.

Total expenses were US$5.177 billion, clearly exceeding our US$5.154 billion total revenue— US$22.8 million over. Ouch!

But there are still some final adjustments to make:

	2023			2022
Without Donor Restrictions	With Donor Restrictions	Total	Without Donor Restrictions	With Donor Restrictions	Total
Increase (decrease) in net assets before nonoperating activities	(35,913)	13,087	(22,826)	26,957	1,664
Nonoperating activities:
Wills and bequests	4,197	530	4,727	5,371	197
Individual contributions	–	228	228	–	95
Investment return (loss)	3,459	148	3,607	(8,411)	(384)
Other	–	(197)	(197)	–	(12,205)
	7,656	709	8,365	(3,040)	(12,297)

The US$22.8 million deficit was eased by US$8.4 million in non-operating income such as bequests and dividends

The organisation now has a US$14 million loss to cover.

That figure shows up in the final tally of net assets—now US$564 million, having started the year at US$578 million:

	2023			2022
Without Donor Restrictions	With Donor Restrictions	Total	Without Donor Restrictions	With Donor Restrictions	Total
Increase (decrease) in net assets	(28,257)	13,796	(14,461)	23,917	(10,633)
Net assets—beginning of year	394,662	183,699	578,361	370,745	194,332
Net assets—end of year	$366,405	$197,495	$563,900	$394,662	$183,699

Nonprofit statement of activities template

Of course, not every nonprofit relies so heavily on donated goods or in-kind donations.

You may prefer to stick strictly to monetary transactions which can be registered instantly. Why bother with complex value calculations?

Commercially available accounting software offers adjustable templates that you can tailor to the revenue or expense categories that are most relevant to your operation.

The following template shows the standard features of a statement of activities and the order in which they appear:

Current Year	Previous Year
Revenue and Contributions	Unrestricted
Grants – Corporate – Government
Fundraising
Membership fees
Services or goods sold
Return on investments
Bequests
Net assets released from restrictions
Total Revenue	£
Expenses
Program Services Supplies Staff Transport Rentals Advertising Utilities
Supporting Services Management and General Fundraising
Total Expenses	£
Net Assets
Change in Net Assets	£
Beginning of year
End of year

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With the right tools you can easily draft documents like the statement of activities to professional standards.

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