Learn About Your Statement of Functional Expenses

The statement of functional expenses is a detailed report that shows how your non-profit spends its money. Specifically, it breaks down your expenses by program, administration, and fundraising costs. 

You can use this report to make sure you're spending wisely and directing funds toward activities that further your mission.  Additionally, it provides transparency for donors and stakeholders by showing them where the money is being used. Fiscal transparency is incredibly helpful to demonstrate responsible fiscal management and can help you build trust among supporters.

Where do I find the statement of functional expenses?

From your MonkeyPod's main menu, choose Reports and then choose Functional Expenses from the "Accounting & Finance" section. Configure the settings for your report, and click "Run Report" to generate your statement of functional expenses for the chosen timespan.

How can I customize our statement of functional expenses?

The "Report Settings" section gives you options to select the timespan for the report and choose how to treat "shared expenses".

Timespan: Select an option under the "Timespan" heading to limit the report to that period.

Shared Expenses: When generating your statement of functional expenses, you can choose how to handle costs that were entered as shared expenses. In nonprofit accounting, "shared expenses" refer to costs that are shared across program, administrative, and fundraising areas. Many of your expenses (such as director payroll, rent, or supplies) are likely to have been entered as shared expenses rather than attributed to a specific class.

• Include shared expenses in report: "Shared Expenses" will be a category in the report that lists all expenses that were assigned that class.
• Allocate/distribute shared expenses: Choose this option to distribute the shared expense amount among the three classes (fundraising, management & general, and programs & services), and not include a separate "Shared Expenses" category. You can choose the percentages that MoneyPod should use when allocating the shared costs to the other categories.

Allocating shared expenses—why this matters

As you enter expenses in your MonkeyPod, you choose a class for each expense. The primary classes are Shared Expenses, Fundraising, Management & General, and Programs & Services.

A strong non-profit directs as much of their funds as possible toward their mission. This shows up in the statement of functional expenses as a higher percentage of expenses going to the "Programs & Services" class. Conversely, if most of an organizations funds are being directed to "Fundraising" or "Management & General" expenses, it's a strong sign that they're not putting the money primarily toward the mission. Various charity watchdog groups also assign ratings based in part on these numbers.

One common guideline for nonprofit functional expenses is a 65% / 25% / 10% split across programs and services, management and general, and fundraising classes. This means that 65% of every dollar is spent your programs and services, and the remaining 35% goes to overhead for management and fundraising costs.

Can I save my report settings?

Yes! If you've configured the report settings just as you like them and you want to save those settings to rerun in the future, just click the "Save Report" button. After naming and saving the report, it will appear in the Reports menu under "Saved Reports" and will be available to everyone who has permissions to view financial reports in your MonkeyPod.

Important note about relative timespans of "This" and "Last"

Just remember that choosing "Last" or "This" timespans will be relative to the point when you run the report. So for example: If you save a report in December 2024 with a "This Month" timespan and then run it in January 2025, the report will show activities for January 2025 because that is now this month. If you want to keep the dates static (for our example, in December), then use a custom timespan and enter the specific dates.

Frequently Asked Questions

I'm new to MonkeyPod and nonprofit bookkeeping. Where are these categories of operating expenses coming from in my statement of functional expenses?

The expense categories in your statement of functional expenses are the accounts from your Chart of Accounts. These are the rows in the report. The columns are classes assigned your expense transactions.

Can this report be run by month?

Yes! to run the report for one month select "Custom" as the timespan and enter the dates you would like to see.

I'd like to include this as a visual to share with my board. Can MonkeyPod help with that?

Absolutely! Just click the "Visualize" tab for the report, and you'll see a donut chart for the report. Use the "hamburger" menu at the right of the screen to download and save the chart as an image.

Want amazing video content? Check out our YouTube Channel!