Commonly Requested Financial Documents by Julie Assel, GPC

One of the ways organizations can be more prepared when the “perfect” grant comes along with a very short timeline is to already have a file of standard attachments. 

With more grants being submitted electronically, we recommend that all of these documents be scanned in portable document format (PDF).  Here is a list of common attachments foundations and the federal government will request:

1. 501(c)3 Tax Exempt Letter – This is not your exemption from state sales tax but a letter from the Internal Revenue Service (IRS) verifying your non-profit status.

2. IRS Form 990 – This is the tax document that tax-exempt nonprofit organizations file each year with the IRS. The 990 allows the IRS and prospective funders to evaluate how nonprofits operate.  This includes information about potential conflicts of interest, compensation of board members and staff and other details having to do with financial accountability and the avoidance of fraud.  All organizations except for churches, religious schools, state institutions, and government corporations have to file a 990.  Even small nonprofits with gross receipts of $50,000 or less must now file the new electronic form 990-N (e-Postcard) to maintain their exemption status.

3. Audited Financial Statements – Audited financial statements are put together by a CPA acting as an independent auditor. The CPA takes various financial statements given to him by the nonprofit, evaluates and cross-references the documents, and then prepares an audited financial statement of the organization.  Some audits will a statement that the accountant is in agreement with the methods used to prepare those documents (the audit is accurate and complete), a qualified opinion (the accountant is not in agreement with the methods used to prepare the supporting financial documents) or that there were a number of issues that would have to be addressed before the accountant would be able to evaluate the accuracy of the information provided. If the last is provided, the organization may need to rework their internal accounting procedures to ensure they are operating according to the usual accounting standards.

4. Current budget – This is the budget approved by the Board of Directors which the nonprofit is using as a guide for how much money they should be raising and spending.

5. Current actual income and expenses – This is a document which states how much a nonprofit has raised and spent thus far in their fiscal year.  This is often compared to the Current Budget to see if the organization is likely to overspend or raise enough money to cover all their expenditures.  This is typically expressed with an end of month date, such as: As of February 28, 2013.

6. Balance Sheet – This is a document is also known as the Statement of Financial Position.  It reveals a nonprofits assets and liabilities.  Assets can be cash, accounts receivable, inventory, tangible assets (machinery, computers, buildings and land) or intangible assets (goodwill, patents, or copyrights).  Liabilities are debts owed to outside parties.

GPC Competency 3: Knowledge of strategies for effective program and project design and development.  Skill 3:  Identify strategies for educating key personnel about financial and programmatic accountability to comply with funder requirements.