The financial documents required by the Foundation have already been prepared by most organizations; it is our hope that organizations will not need to create documents specifically for the purposes of applying for a grant. We offer this brief glossary of terms in order to help applicants identify the information required in their existing documents:
Budget
The Budget is a working document adopted by the organization’s board of directors that shows the sources from which the organization plans to raise its income (also referred to as revenue) to support its work for the year. The Budget also shows the ways in which the organization plans to spend its income (that is, what programs, operations, etc. the organization plans to pay for). Both the revenue and the expenses need to be listed on the budget document, and the total of revenue expected needs to equal the total of funds to be expended.
Income Statement
The Income Statement (otherwise known as a “Statement of Activities”) summarizes an organization’s income and expenses during a given period of time (typically a month, a quarter or a year). The statement also shows the excess or deficit of revenues over expenses. Applications should include an income statement for the most recent completed fiscal year.
Balance Sheet
The Balance Sheet (otherwise known as a “Statement of Financial Position”) provides a comprehensive snapshot of an organization’s financial condition at a particular point in time. The Balance Sheet is prepared for a specific date, which is typically at the end of a reporting period. Applications should include a Balance Sheet for the last day of the prior fiscal year.
Frequently Asked Questions
How do I reconcile my fiscal year with the prior fiscal year data requested on the application?
The Foundation recognizes that different organizations have different fiscal years and that creating reports for recently completed fiscal years can be challenging based on the Foundation’s deadlines. For an organization with a calendar fiscal year (January 1 – December 31) that is applying by the February deadline, audited statements are not usually available for the most recently completed fiscal year. Therefore, the Foundation accepts statements which are prepared by the organization’s management. You can label the documents “management prepared and unaudited.” For the August deadline, organizations with a fiscal year that runs July 1 through June 30 encounter a similar problem. Whether audited or management prepared, the Foundation is looking for a statement of the most recently completed year’s actual revenue and expenses.
How should I reconcile my next fiscal year’s projected budget with the Foundation’s application deadline when the two do not match?
The Foundation needs a budget for the period over which the organization plans to spend the funds requested in the grant application. There are several factors that create questions for non-profits in terms of providing the next fiscal year’s projected budget. One issue is the organization’s fiscal year relative to when the funds requested will be used. For example, an organization with a fiscal year that runs July 1 through June 30 might apply by the August 1 deadline for a project that starts in the following January and runs for twelve months. The organization would have its current budget, and it could show how the funds would be spent in the last six months of the current fiscal year. However, for the remaining six months, the Foundation still needs to know how the funds would be spent though the organization would not have adopted the budget for the next fiscal year. What most organizations do is submit a draft budget for the following year. A draft projected budget is sufficient for this situation. Organizations submitting multi-year requests encounter similar problems. It is permissible to submit a multi-year combined draft budget for requests that would expend funds beyond the organization’s currently adopted budget.
The Foundation asks for both the budget from the prior fiscal year as well as a comparison of actual income and expenses. What are you looking for?
The Foundation views the budget as the working financial document that shows what the Board approved to guide fiscal operations through the fiscal year. Once that fiscal year is complete, the Foundation is looking for a statement of how the organization’s income (or revenue) as well as expenses compared to what was projected for the previous year. Some organizations find it easiest to combine the prior fiscal year’s budget with another column showing the actual income and expenses for the organization. This format is fine and provides two of the requested documents on one sheet. Please label the document to indicate what information is being presented and over what time frame. The statements can be management-prepared if audited figures are not available.
What if our organization has never received a professional audit?
The Foundation does not require an audit as a prerequisite to receiving a grant, though the Foundation recognizes that one of the best financial management practices for maturing organizations is to perform an audit within the parameters of standard accounting practices.
We are a specific department of a university. Should we submit the operating budget for our department, or for our project?
Please submit the operating budget for your project.
We are a university requesting only project support. What budget documents should we submit?
Please submit documents for your specific project.
