AmeriCares Foundation Non-Profit Organization Analysis Paper Example

Published: 2022-12-08
AmeriCares Foundation Non-Profit Organization Analysis Paper Example
Type of paper:  Case study
Categories:  Finance Budgeting Social work Accounting Financial analysis
Pages: 4
Wordcount: 876 words
8 min read


Americares Foundation is a non-profit organization in the United States that focuses on addressing disasters and global health by providing immediate responses to emergency needs such as medical and long-term care interventions to people in the US and across the globe. Looking at Americares Foundation's 2017 and 2018 annual report, it is evident that the financial statements for the entity conform to the Financial Accounting Standards Board (FASB) guidelines provided in Statement No. 117, Financial Statements of Not-for-Profit Organizations (Nonprofit Accounting Basics, 2019). According to FASB ASC 958-205-45, AmeriCares Foundation presents the four key financial statements including, the statement of financial position, statement of activities, statement of cash flows, and statement of functional expenses (Americares Foundation, 2019). While presenting these financial statements, the AmeriCares Foundation incorporates the key items as stipulated by the FASB Statement No. 117. For example, the balance sheet consists of the assets, liabilities and net assets of the entity. As per the FASB 117, AmeriCares Foundation categorizes its net assets into unrestricted, temporarily restricted and permanently restricted.

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The Fund Categories

From the financial statements, it is evident that the AmeriCares Foundation receives funds from various donors. In the balance sheet, the entity presents three categories of net assets that denote the three fund categories that nonprofit organizations are bound to present as stipulated by FASB 117 (Nonprofit Accounting Basics, 2019). While some donor contributes funds for a specific purpose, others contribute funds that the agency can use for any purposes. This, therefore, gives rise to the three categories of funds including the unrestricted, temporarily restricted, and permanently restricted net assets (Americares Foundation, 2019).

Unrestricted Net Assets

These funds are not subject to any donor's restrictions. The donors give the agency the mandate to decide how to utilize the funds. Therefore, once the donors contribute the money, the agency can utilize these funds for any projects of their choice.

Temporarily Restricted Net Assets

The funds are contributed for a specific purpose where the donor puts restrictions on the specific projects that the agency will invest the funds. However, once the agency completes the primary purpose as per the donor's restrictions or in a case where the set timeline elapses, the donor's restrictions expire, and the agency can use the funds for other projects.

Permanently Restricted Net Assets

Here, the donors contribute funds designated to a specific purpose. It means that the agency is restricted to use the funds for the particular purpose and cannot use the money for other projects that are not included on the donor's restrictions.

Potential Areas of Interest to the Stakeholder Concerning the Status of Revenue and Expenses

The statement of activities presents the revenues and expenses of the entity. Based on this information, the stakeholders need to be concerned about the sources of revenues as well as the projects that utilize these revenues. The stakeholders need to assess the various sources of revenue including donors and further assess whether the entity is utilizing these funds effectively. Nonetheless, the statement of activities does not show any deficit between the revenues and expenses and hence evident that the funds are utilized effectively.

The Statement of Cash Flows

In the 2017-2018 annual report, AmeriCares Foundation presents a statement of cash flow which is prepared using the indirect method. As per the FASB 117, the statement of cash flows presented by Americares foundation conforms to the key items that are required to be incorporated while preparing this statement. It is divided into three key sections including investing activities, financing activities, and operating activities (Nonprofit Accounting Basics, 2019). This method is similar to the Generally Accepted Accounting Principles (GAAP) format; however; there are few areas that differ. For instance, in the indirect method, the FASB 117 stipulates that non-profit organizations should use the change in net assets while GAAP stipulates that entities use the reported profits.

Comparing the Reporting of Pledges and Contributions to the Reporting of Exchange Transactions

Through analyzing AmeriCares Foundation's 2018/2018 annual report, it is easy to compare the reporting format of the pledges and contributions to that of the exchange transactions. The pledged and contribution encompasses the cash and cash equivalents which are presented on the balance sheet under the current assets category and recorded at their fair value. On the other hand, the exchange transactions encompass the revenues and expenses that are presented in the statement of activities (Americares Foundation, 2019). The major funds utilized include the unrestricted, temporarily restricted, and permanently restricted net assets. These categories are presented in both the statement of financial position and the statement of activities.

AmeriCares Foundation's Fiscal Condition

From the financial statements, it is evident AmeriCares Foundation is a successful not-for-profit organization strives to meet its objectives by utilizing the revenues effectively. In the statement of activities, the entity utilizes the revenues effectively through its expenses. The statement of cash flow also shows that the entity does not face liquidity problems about the cash available. Furthermore, it is supported by the liquidity ratios such that after comparing the current assets and the current liabilities for both 2017 and 2018, it is evident that the entity maintains a favorable liquidity position (Americares Foundation, 2019).


Americares Foundation. (2019). Americares Foundation 2017-2018 annual report. Retrieved from

Nonprofit Accounting Basics. (2019). Financial accounting standards-FAS 117. Retrieved from

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