Examples of Statement of Changes in Equity for Non-Profits

Understanding the Statement of Changes in Equity for Non-Profits

The Statement of Changes in Equity provides a detailed account of the changes in an organization’s equity over a specific period. For non-profits, this statement is crucial for transparency and accountability, offering insights into how funds are utilized and the overall financial health of the organization. Below are three diverse, practical examples that illustrate different scenarios of changes in equity within non-profits.

Example 1: Community Art Organization

Context

A community art organization receives donations, grants, and conducts fundraising events to support local artists. This example demonstrates how these activities affect the organization’s equity.

The organization began the year with an equity balance of $50,000. Over the year, it received donations amounting to $25,000, incurred expenses of $15,000, and held a fundraising event that generated $10,000 in net income.

Description	Amount
Beginning Equity	$50,000
Add: Donations Received	$25,000
Add: Fundraising Event Income	$10,000
Less: Expenses Incurred	($15,000)
Ending Equity	$70,000

Notes

This example illustrates how different revenue streams contribute to the equity.
It highlights the importance of tracking both income and expenses to understand total equity accurately.

Example 2: Environmental Conservation Group

Context

An environmental conservation group focuses on projects to restore local habitats. This example showcases how grants and project expenses influence the equity statement.

At the beginning of the fiscal year, the group had an equity balance of $100,000. During the year, they received a $40,000 grant but spent $30,000 on conservation projects.

Description	Amount
Beginning Equity	$100,000
Add: Grant Received	$40,000
Less: Project Expenses	($30,000)
Ending Equity	$110,000

Notes

This example emphasizes the role of grants in enhancing equity.
It is essential for non-profits to report project-related expenses to provide clarity on how funds are utilized.

Example 3: Health and Wellness Non-Profit

Context

A health and wellness non-profit organization conducts workshops and health screenings. This scenario illustrates how program revenue and contributions from members impact equity.

Starting with an equity balance of $75,000, the non-profit earned $20,000 from workshop fees and received $10,000 in member contributions. They also incurred total expenses of $25,000.

Description	Amount
Beginning Equity	$75,000
Add: Workshop Revenue	$20,000
Add: Member Contributions	$10,000
Less: Total Expenses	($25,000)
Ending Equity	$80,000

Notes

This example highlights how operational revenue and member support are crucial for sustaining equity.
It illustrates the necessity of documenting all sources of income and expenses for financial transparency.

These examples of the statement of changes in equity for non-profits demonstrate the importance of tracking financial activities to maintain transparency and accountability in the use of funds.