Question

Can You select any non- profit organization and explain the following?

1. Explain the funds that the nonprofit organization has, including their purpose and whether or not there are any restrictions to the funds?

2.  Identify the classifications and the amounts in each of the nonprofit’s net assets, and explain the meaning of each classification.  

Answer 1

1) Different sources of funds that a non profit organisation has are as follows

i) Contributions from donars

ii) Membership fee from members of the organisation

iii) Contribution by the companues under Corporate Social responsibility

iv) Income from investments

v) Government grants

These funds are again divided based on restrictions as under:-

a) Restricted funds:- Donations on which donars imposed restrictions on usage and these types of assets can be used only for capital projects or specifi projects

b) Unrestricted funds:- Donations on which no restrictions are imposed by the donar are called as unrestricted funds and these funds are generally used for administration expenses and to meet operating expenses.

2) Net assets are classified into following :-

a) Unrestricted net assets are those type of assets on which the donars who donated these assets has not placed any restrictions on its usage.

b) Temporarily restricted assets are those types of assets on which the donars of the assets imposes some restrictions in the usage of assets or the restrictions can be expired after some period.

c) Permanently restricted assets are those assets on which donars of the asset has impossed permanent restriction on the usage of the asset in such a prescribed way and there is no time for its expiry.