What Is Non-Profit Accounting?

Non-profit accountants deal with finances and monetary regulations for non-profit organizations. Keep reading to learn more about what non-profit accounting involves and the education you'll need to work in this career field. Schools offering Accounting degrees can also be found in these popular choices.

Understanding Non-Profit Accounting

Non-profit accounting involves the design and implementation of a system for documenting and evaluating financial conditions and transactions of non-profit organizations. Non-profits are organizations that distribute their income to achieving their goals. They may be staffed with volunteers and paid workers.

Non-profit organizations in the U.S., including community organizations, churches, child daycare centers, colleges and universities, are typically tax-exempt. These organizations often solicit donations, contributions and government grants, and thus are subject to scrutiny by the Internal Revenue Service (IRS). Non-profit organizations need accountants to balance their books and comply with IRS regulations.

Important Facts About Non-Profit Accounting

Median Salary (2018) $70,500 (for all accountants and auditors)
Job Outlook (2016-2026) 10% growth (for all accountants and auditors)
Professional Certification Certified Nonprofit Accounting Professional (CNAP)
Similar Occupations Bookkeeping, accounting, and auditing clerks; budget analysts; cost estimators; financial analysts; personal financial advisors; tax examiners and collectors

Source: U.S. Bureau of Labor Statistics

Non-Profit Management

The federal government has stringent requirements exclusive to non-profits that are not related to the reporting required by commercial firms. Although tax-exempt organizations may enlist the assistance of non-profit accounting experts to prepare their financial reports, the primary responsibility for financial statements still lies in the hands of the non-profits' management team. If you are a professional working in non-profit management, you'd need to have an understanding of not-for-profit accounting elements and reporting protocols, as well as a clear financial picture of the organization you work for, including knowledge of the following:

  • Non-profit organization laws
  • Generally accepted accounting principles (GAAP)
  • Basic financial statements
  • Revenues and expenses
  • Investments
  • Reporting and measuring results

Education Options

It is important for non-profit managers, accountants and board members to have the most accurate and up-to-date knowledge of operating and reporting requirements for non-profit and tax-exempt organizations. Whether you are currently working for a non-profit organization or looking to find an entry-level job in a non-profit, you may wish to pursue a bachelor's degree in a related field, such as accounting and financial services or business administration - non-profit management. These programs can provide you with fundamental business principles, non-profit accounting principles and tax regulation compliance, often touching on course topics such as the following:

  • Financial accounting
  • Managerial accounting
  • Business law
  • Grant writing and administration
  • Nonprofit financial management
  • Business management
  • Microeconomics
  • Non-profit law

To continue researching, browse degree options below for course curriculum, prerequisites and financial aid information. Or, learn more about the subject by reading the related articles below:

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