Message from Marsha Moller
Treasurer, WRJ Northeast District
Financial literacy is an important skill for women. You may already be responsible for managing your own finances or those of loved ones. At some point, you may be appointed to the board of your sisterhood, temple, or the WRJ Northeast District. As such, your role may include examining financial statements in order to review the organization’s finances.
Accounting and finance, like many other fields, has its own language, which at first can be confusing. Additionally, some terms are used interchangeably, causing additional confusion.
Here are some basic accounting definitions and ways to view the budget.
Revenues and Expenses. Most sisterhoods and WRJ districts keep their books on cash basis for a fiscal year that ends on June 30. What does this mean? We tally up the cash inflows (“revenues”) and outflows (“expenses”) starting on July 1 and ending on June 30 of the next calendar year.
Typically, revenue for nonprofit organizations consists of donations, fees, and dues (annual commitment). Expenses are the costs to run programs, pay salaries, rent space, pay utilities, buy health insurance, etc.
Change in Net Assets. The difference between the revenues and expenses is the change in net assets. You may also hear this referred to as surplus and deficit, or profit and loss.
Statement of Activities. This report (sometimes called an Income Statement) shows the total revenues, expenses, and changes in net assets. You may see a separate entry on the Statement of Activities for restricted revenue and expenses. This is for donations with restrictions on how the funds can be spent; they are listed separately from unrestricted funds.
Statement of Financial Position. This report (which may also be called a Balance Sheet) shows the balances of assets (including cash) and liabilities as of a specific date. The term net assets refers to assets minus liabilities.
Budget. The budget is a guide, a best estimate of revenues and expenses for the fiscal year. A column on the Statement of Activities may compare budgeted amounts to actual amounts – using dollars or percentages. When the percentage is close to 100%, the actuals are close to the budgeted amount.
I hope you will feel empowered to ask questions during your next treasurer’s report or budget discussion. Feel free to reach out to me with any questions, as I would be thrilled to help you.
Marsha Moller (mbmoller@comcast.net)
Temple Beth Shalom, Needham, Massachusetts
