Statements of Functional Expenses for Non-Profits

Best Practices for Categorizing and Reporting Expenses Under Accounting Standards

Recording of a 110-minute CPE webinar with Q&A

Conducted on Wednesday, August 21, 2013

Recorded event now available

or call 1-800-926-7926
Program Materials

This teleconference will provide non-profit finance professionals and their advisors with a review of current trends related to the statement of functional expenses (SFEs) and best practices for creating an effective statement of functional expenses.


Donors, government regulators, watchdog agencies and other parties pay close attention to the cost ratios and expense trends unveiled in a non-profit's SFE. Preparation of an accurate SFE under the applicable standards is crucially important for non-profits and advisors.

A well-designed SFE demonstrates the effectiveness of a non-profit's controls over its administration and fundraising costs. It divides total expenses into program, administrative and fundraising categories, and must meet the terms of FAS 117 and GAAP.

However, correctly preparing an SFE is quite challenging, especially when it comes to categorizing joint program-fundraising costs. Even demonstrated efficiency with certain expenses does not automatically mean the non-profit is poised to accomplish its goals.

Listen as our panel of experienced advisors explains the critical data, rules and best practices for correctly preparing a statement of functional expenses for a non-profit organization.



  1. Standards governing preparation of an SFE
    1. FAS 117
    2. GAAP
    3. Other standards
  2. Categorization of a non-profit's expenses
    1. Program expenses
    2. Administrative expenses
    3. Fundraising expenses
  3. Best practices with SFEs
    1. Potential scenarios involving allocation of joint costs
    2. Avoiding tendency to disguise fundraising costs
  4. How outside parties use SFEs
    1. What is the IRS watching
    2. What donors are watching
  5. Common errors in functional reporting
    1. Reporting zero fundraising expenses
    2. Reporting zero management and general expenses
    3. Under-reporting overhead expenses


The panel will cover topics like these:

  • Categorizing a non-profit's expenses.
  • Avoiding common errors in functional reporting.
  • Making defensible decisions on allocating joint costs.
  • Analyzing what the SFE says about the non-profit's expense efficiency.
  • Understanding accounting standards that govern preparation of an SFE.

Following the speaker presentations, you'll have an opportunity to get answers to your specific questions during the interactive Q&A.


Michael Sack Elmaleh
Michael Sack Elmaleh

Independent CPA and CVA

He has more than 30 years of public accounting and business appraisal experience, and with non-profit audits. He has...  |  Read More

Catherine Bendall, CPA, PSA, CGMA
Catherine Bendall, CPA, PSA, CGMA

WithumSmith + Brown

She specializes in highly complex not-for-profit and governmental audits of many types. She works with various...  |  Read More

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