What are some common misconceptions about nonprofit finances?

What are some common misconceptions about nonprofit finances?

Many people think nonprofits don't need to worry about finances, but that's a myth. Nonprofits must manage their finances just like any other organization.

Do nonprofits really make a profit?

Yes, nonprofits can generate surplus revenue, but it must be reinvested into the organization's mission rather than distributed as profit.

Are all donations tax-deductible?

Not all donations are tax-deductible. It depends on the nonprofit's tax-exempt status and the type of donation.

Is it true that nonprofits are always struggling financially?

While many face financial challenges, some nonprofits are well-funded and financially stable, depending on their management and funding sources.

How can I find out more about a nonprofit's financial health?

You can review their IRS Form 990, which provides detailed financial information, or check their annual reports and audits.