Revenue Disclosures for Nonprofits Explained

Revenue disclosures for nonprofits refer to the information provided in the financial statements and accompanying notes that detail how an organization generates revenue, including the sources, nature, and various restrictions or conditions that might apply to those funds. These disclosures are crucial for transparency and accountability, allowing stakeholders to understand the financial health of the nonprofit, its funding sources, and how it utilizes its resources.

Here are some key components of revenue disclosures for nonprofits:

  1. Nature of Revenue Sources: Nonprofits often receive revenue from various sources, such as donations, grants, membership fees, program service fees, investment income, and more. The disclosures should specify the types of revenue generated by the organization.
  2. Donor Restrictions: Nonprofits frequently receive funds with specific restrictions or conditions attached. These restrictions might dictate how the funds can be used (e.g., for a specific project or program) or when they can be accessed. Revenue disclosures should detail the nature of these restrictions and how they impact the nonprofit’s ability to use the funds.
  3. Time Restrictions: Some revenue may be subject to time-based restrictions, meaning the funds must be used within a certain time frame. The financial statements should disclose any revenue that is subject to such restrictions and the implications for the organization’s financial planning.
  4. Unconditional Promises to Give (Pledges): Nonprofits often receive pledges from donors to contribute funds in the future. Revenue disclosures should outline any significant unconditional promises to give, the amounts pledged, and the expected timing of receipt.
  5. Membership Fees and Dues: If the nonprofit derives revenue from membership fees or dues, the disclosures should detail the nature of these fees, the number of members, and any trends in membership levels.
  6. Government Grants: Nonprofits that receive grants from government agencies should disclose the sources of these grants, the purposes for which they are intended, and any requirements or conditions associated with the grants.
  7. In-Kind Contributions: If the nonprofit receives non-cash contributions (in-kind donations) such as goods or services, the disclosures should provide information about the fair value of these contributions and how they are used by the organization.
  8. Events or Fundraising Activities: If the nonprofit generates revenue from events or fundraising activities, the disclosures should outline the nature of these activities, the funds raised, and any costs associated with organizing them.
  9. Comparison with Previous Periods: To provide context and show trends, revenue disclosures often include a comparison of the current period’s revenue with previous periods.
  10. Note Disclosures: In addition to the financial statements, nonprofits typically include detailed notes that provide additional information about their revenue sources, any restrictions, and other relevant details. These notes offer a more comprehensive understanding of the organization’s financial picture.

Revenue disclosures are essential for nonprofit organizations to communicate their financial story to stakeholders, including donors, members, grantors, and the public. They help build trust and accountability by showcasing how funds are obtained, managed, and used to fulfill the nonprofit’s mission and objectives. As accounting and reporting standards may vary by jurisdiction, nonprofits should ensure compliance with applicable regulations and seek guidance from accounting professionals when preparing revenue disclosures.

Caroline Grimm

Caroline Grimm is an accounting educator and a small business enthusiast. She holds Masters and Bachelor degrees in Business Administration. She is the author of 13 books and the creator of Accounting How To YouTube channel and blog. For more information visit:

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