Create a Non-Profit Chart of Accounts

Page content

What is a Non-Profit Chart of Accounts and Why Do You Need One?

A non-profit chart of accounts is a list of all the accounts tracked in a non-profit general ledger. The non-profit chart of accounts is standardized across the non-profit sector. This standardization is known as the “Unified Chart of Accounts” (UCOA). The UCOA is the preferred chart of accounts used by the National Center for Charitable Statistics (NCCS), The California Association of Nonprofits (CAN), CompassPoint Nonprofit Services, and The California Society of CPAs. The UCOA is a great way to ensure that your general ledger accounts match those of other non-profit organizations, making it easier to gain access to grants, complete taxes, etc.

How Do You Create a Non-Profit Chart of Accounts?

The first thing to do when creating a non-profit chart of accounts is to define your accounts. When you are creating a chart of accounts, recognize that each account will be assigned a number depending on the account category:

  • 1000-1999 Assets
  • 2000-2999 Liabilities
  • 3000-3999 Equity
  • 4000-4999 Contributions and Support (in a non-profit)
  • 5000-5999 Revenues
  • 6000-6999 Other Revenues
  • 7000-7999 Expenses - Personnel related
  • 8000-8999 Expenses - Non-Personnel related
  • 9000-9999 Non GAAP (Generally Accepted Accounting Principals) Expenses

The above are the expense codings for the UCOA. On the NCCS website, you can find a downloadable Excel chart explaining where you will put the figures from these accounts on different Non-Profit reporting forms. You may also wish to download the sample chart of accounts available in our Media Gallery to use as a template.

Assets on the Non-Profit Chart of Accounts

Assets are those items which add value to your company. There are tangible and non-tangible assets. There are fixed assets and liquid assets. The important thing is that you keep track of all these assets, with each in their own category. Here’s a brief list of the types of asset accounts that may be on a non-profit chart of accounts:

  1. Cash accounts (cash in bank, petty cash, savings, short-term investments)
  2. Accounts receivable (monies your non-profit expects to have come in)
  3. Contributions receivable (expected donations and grants)
  4. Investments
  5. Fixed assets (property, furniture, fixtures, vehicles, etc.)
  6. Depreciation

Liabilities on the Non-Profit Chart of Accounts

Your liability accounts make up the accounts for which you owe money. Here is a brief list of the types of liability accounts you may have when running a non-profit:

  1. Accounts payable
  2. Grants payable
  3. Accrued payroll and employee-associated expenses
  4. Short-term notes
  5. Long-term notes
  6. Government owned assets

Equity on the Non-Profit Chart of Accounts

Equity is equal to assets minus liabilities. When running a non-profit business, you may have the following equity accounts:

  1. Unrestricted net assets
  2. Temporarily restricted net assets
  3. Permanently restricted net assets

Contributions and Support In Non-Profit Accounting

Many non-profit organizations depend upon donations and other contributions for their operations costs. Here are the categories of non-profit accounts dealing with contributions and support that you will find on a the chart of accounts for a non-profit.

  1. Direct contribution revenue
  2. Services and Goods donated revenue
  3. Non-government grant revenue
  4. Split-interest agreement revenue
  5. Indirect contributions
  6. Government grant revenue

Revenues of Non-Profits on the Chart of Accounts

Revenue is the money you make during the operation of your non-profit organization. Revenue accounts may be in any of the following categories:

  1. Government agency revenue
  2. Program revenue
  3. Dues revenue
  4. Investment revenue
  5. Special event revenue
  6. Unrealized gains
  7. Net assets released from restrictions

Non-Profit Expenses and the Chart of Accounts

Expenses are the transactions where money is paid to various vendors. Expenses in a non-profit organization may include:

  1. Grants and contracts
  2. Salaries & personnel expenses
  3. Contract services
  4. Non personnel expenses
  5. Facility expenses
  6. Travel expenses
  7. Business expenses
  8. Non GAAP Expenses

The Benefits of Good Record Keeping

One of the reasons to assemble a non-profit chart of accounts and keep an accurate general ledger is to stave off some of the problems that come about from poor record keeping. By practicing good record keeping habits, you can ensure that your non-profit is ready to apply for grants, ask for contributions, know when to hold fundraisers, and can take care of tax-time accounting needs.