Nonprofit bookkeeping
Nonprofit bookkeeping checklist
A nonprofit's books have to show where the money came from, what it was restricted for and what it was spent on. The monthly request should collect the donation records, the grant agreements, the restricted fund activity, the payroll and the expense receipts. Keep the restrictions and the functional expense allocation visible so the Form 990 and the board report can be prepared without a scramble.
Who sends itSent by the nonprofit's bookkeeper after the month ends, usually by the 10th. It covers every program, fund and bank account the organization uses.
0 of 16 ticked
01Donations and grants
02Restricted funds
03Expenses and payroll
04Governance and banking
What firms get wrong
- Recording a restricted donation as unrestricted and losing the restriction in the fund report.
- Expensing a program cost without a function code, which makes the Form 990 allocation a guess.
- Treating a grant as revenue before the conditions in the agreement are met.
- Missing the board approval for a related-party transaction or a major contract.
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Questions about this checklist
What records does a nonprofit need each month?
The donation and grant records, the restricted fund activity, the pledge schedule, the expense receipts, the payroll register, the board minutes and the bank statements. The restricted fund report is what separates a nonprofit close from a business close.
How are restricted donations recorded?
A donation with a donor restriction is usually recorded as revenue with a corresponding restriction, then released to unrestricted when the restriction is met. Keep the donor letter and the documentation that shows the restriction was satisfied.
Does a nonprofit file a Form 990 every year?
Most tax-exempt organizations file a Form 990 series return annually, but the form and the due date depend on the organization's gross receipts and status. The return is generally due by the 15th day of the 5th month after the fiscal year ends.
Can a nonprofit pay a contractor without a W-9?
It should not. A payment to an unincorporated contractor for services is generally reported on Form 1099-NEC when it reaches the threshold, and the W-9 is the record of the payee's name and taxpayer identification number.
Sources
- IRS: Instructions for Form 990
- IRS: Publication 1771, Charitable Contributions
- IRS: Tax Exempt Organization Search
Checked November 3, 2026. Tax rules, forms and thresholds change; confirm them with the IRS or your tax software before relying on them.
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