Nonprofit Budgets and the Overhead Myth

What it is

Organizations rarely close because they ran a deficit. They close because on a particular morning there was not enough money in the account. A surplus and a cash position can point in opposite directions for months.

This is the book on holding it. Bookkeeping that survives the third year. Restricted and unrestricted, the two most consequential words in nonprofit finance and the ones founders usually learn after they matter. Fund accounting without an accountant. Internal controls in an organization of three people. And reserves, with the argument for holding them.

Then the public half: presenting a financial statement to a room without notes, the audit-or-review question that small organizations commonly answer expensively, Form 990 as the first document a serious funder reads, and overhead. Every incentive in the sector encourages understating that figure, and the incentives are wrong.