How Nonprofits Cluster Functional Expenses on Financial Statements

Like grapes, a nonprofit entity’s expenses are “clustered” on the organization’s financial statement. Nonprofits are required to report financial information using functional expense classification, which is a method of grouping expenses according to their purposes (e.g., program services and supporting services). By contrast, natural expense classification is based on the type of expense – such … Continue reading How Nonprofits Cluster Functional Expenses on Financial Statements