This nonprofit course on Nonprofit Functional Expenses shows us that one of the major differences in financial statement presentation between for profit companies and nonprofit organizations is the presentation of nonprofit functional expenses on the Statement of Activities and Changes to Net Assets. While the revenue section of the report is the same as a standard income statement, with a list of revenue by category, such as contributions and gifts, program service revenue, grants and investment income, the expense section does not list expenses by category, but by functional classification.
Nonprofit software trends are improving donor retention and fundraising efforts. The biggest trend has been implementing nonprofit data integration. Historically, nonprofit data integration has been laborious and expensive. Separate systems have often been used for accounting, payroll, CRM, social media, email marketing, volunteer management, crowdfunding, events and other needs. But now, with cloud computing and integrated data, nonprofits can streamline operations, improve donor targeting, retention and reduce costs.
Nonprofit W-2 preparation is basically the same as for-profit businesses, but with some additional considerations based on the type of nonprofit you are. Like any other business, nonprofits and their employees are subject to payroll taxes even though 501(c)(3) charitable organizations are exempt from paying income taxes.