Also known as a “statement of financial position,” the balance sheet reports on the organization’s assets and liabilities for a given moment in time. Assets include cash, accounts receivable, equipment, ownership of a building, and any intangible resources that have value, such as a curriculum or copyright. Liabilities are any cash owed, including payroll, rent, transportation, and supplies.
Statement of Activities
This statement of profit and loss compares funding sources against program’s expenses, administrative costs, and other operating commitments. As opposed to the balance sheet’s financial snapshot, the statement of activities reports on a specific timeframe (e.g., monthly) and indicates whether the organization is financially solvent (in the black) or owes money (in the red) for that period.
The executive director is also responsible for working with the board, accountant, chief financial officer, and other stakeholders in creating the organization’s annual budget.