Reading Financial Statements
Read your nonprofit’s financials with confidence and ask the right questions.
For: Nonprofit board members
What you’ll learn
- Read a nonprofit budget and balance sheet
- Tell apart the four core financial statements and what each one answers
- Understand net assets with and without donor restrictions
- Spot warning signs in the numbers
- Ask the financial questions a board should ask
Screen your volunteers for $5
VolunteerBadge runs FCRA-compliant background checks for just $5 — with identity verification built in. No monthly fees, no contracts.
Create a free account →Course outline
- 1
Why a board member reads the numbers
5 min
- 2
Statement of Financial Position (the balance sheet)
6 min
- 3
Net assets: with and without donor restrictions
6 min
- 4
Statement of Activities & Functional Expenses
6 min
- 5
Cash flow & two ratios every board should know
6 min
- 6
Budget vs. actuals & reading the Form 990
5 min
- 7
The questions a good board asks
4 min
Sources & further reading
- Financial Accounting Standards Board (FASB) — ASU 2016-14: Presentation of Financial Statements of Not-for-Profit Entities
- Propel Nonprofits — Balance Sheet Cheat Sheet & Glossary of Financial Terms
- Nonprofit Finance Fund — Best Practices for Nonprofit Financial Health: Top 3 Measures
- National Council of Nonprofits — Federal Filing Requirements for Nonprofits (Form 990)
- Candid (Learning) — Where can I find an organization’s Form 990?
This course is educational and provides general information about the Fair Credit Reporting Act and volunteer-screening best practices. It is not legal advice. Laws vary by state and change over time — consult a qualified attorney about your organization’s specific obligations.