Cornerstone Accounting
NONPROFIT ACCOUNTING SERVICES
Nonprofit Accounting That Shows What Your Mission Really Costs
CPA-led accounting built for nonprofits: restricted gifts tracked to the dollar, grants reported without the scramble, expenses allocated across programs, and financials your board, funders, and auditors can rely on. For organizations with $500K to $20M in annual revenue, nationwide.
✓ Led by a licensed CPA
✓ Built around fund and grant accounting
✓ Works with the software you already use
Your Monthly Nonprofit Package
✓ Statement of financial position & activities
✓ Restricted funds & grant balances
✓ Budget vs. actual by program
✓ Cash & months of operating reserve
Delivered every month.
WHY NONPROFIT BOOKS GO WRONG
A Healthy Bank Balance Can Still Hide a Budget Problem
Nonprofits aren't run like small businesses, so their books can't be kept like one. When gifts, grants, and shared costs all land in the same few accounts, the numbers look fine right up until a funder, an auditor, or your board asks a specific question.
Restricted money spent like it's general
A donor gave for one program, but the gift went into the operating account with everything else. Now no one is sure how much is actually free to spend.
Grant reports rebuilt by hand
Every quarter someone exports the ledger and hand-sorts expenses by grant in a spreadsheet, and the totals never quite match last quarter's.
Shared costs nobody allocated
Rent, salaries, and software all sit in one bucket. At year-end, someone has to reconstruct how much went to programs versus admin and fundraising.
Board meetings that stall on "can we afford it?"
The board gets a bank statement and a P&L, but not the answer it needs: what's available after restrictions and how many months of reserves you have.
Audit season that eats the spring
The auditor's request list arrives, and staff spend weeks digging up support while the auditor proposes adjustments that should have been booked months ago.
A Form 990 that doesn't tie to the books
The return gets assembled at the deadline, and its revenue, functional expenses, and balances don't match the board's financials. That's a public document donors and funders can read.
CPA-LED. NONPROFIT-FOCUSED.
A Nonprofit Accountant Who Understands Stewardship, Not Just Debits and Credits
A business measures success by profit. A nonprofit measures it by mission, and it answers to donors, grantors, regulators, and a volunteer board along the way. That's why nonprofit accounting has its own rules: two classes of net assets, expenses reported by function as well as by type, and specific standards for when a grant counts as revenue.
Cornerstone Accounting is led by Ethan, CPA, and nonprofits are one of our two core specialties. We set up your books the way your organization is actually funded and governed, by program, by grant, and by restriction. Then we keep them current every month, so your board makes decisions on today's numbers and not last year's audit.
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Restrictions tracked to the dollar, from the gift letter to the release
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GAAP-aligned reporting under ASC 958, the standard your auditors and larger funders expect
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A CPA you talk to directly, not a rotating team
WHAT'S INCLUDED
Nonprofit Accounting Services, Built Around Your Mission
Everything your team, board, and funders need, from coding each transaction correctly to CFO-level planning.
Monthly Nonprofit Accounting
Every transaction coded to the right program, grant, and fund, with bank, credit card, and payroll accounts reconciled every month.
Fund & Restriction Tracking
Net assets with and without donor restrictions tracked separately, with restrictions released as you meet the donor's purpose or time requirement.
Grant Accounting & Reporting
Budget-vs-actual by grant, support for reimbursement requests and drawdowns, and funder reports that tie back to the general ledger.
Board-Ready Financial Reporting
Monthly statements of financial position and activities, with a plain-English summary your treasurer can present to the board.
Payroll Coordination & Time Allocation
Payroll set up so staff time and benefits are charged to the right programs and grants, supported by the time records funders and auditors look for.
Cash Flow & Reserve Planning
A forward view built around grant reimbursement timing, seasonal giving, and payroll, plus a clear read on your operating reserve.
Functional Expense Allocation
A documented, consistent method for splitting shared costs across program services, management and general, and fundraising, ready for your financial statements and Form 990.
Budgeting & Forecasting by Program
Annual organization-wide and program budgets, grant budgets that include indirect costs, and mid-year reforecasts when funding changes.
Virtual CFO for Nonprofits
Finance committee meetings, KPI dashboards, policy and internal-control guidance, and a sounding board for growth, new programs, and major grants.
FUND ACCOUNTING
Restricted Funds and Functional Expenses: Where Nonprofit Books Earn Trust
Two questions decide whether your board, funders, and auditors trust your numbers: Is every restricted dollar being used the way the donor intended? And what does each program really cost once shared expenses are counted? Generic accounting can't answer either one.
How we handle it every month
✔ Every gift and grant classified by restriction when it's recorded, using the award letter or gift agreement
✔ Releases booked monthly, matched to the expenses that satisfied them
✔ Shared costs allocated with one documented method that holds up at audit
✔ Grant budget-vs-actual updated so overspending shows up before the report is due
Net assets with and without donor restrictions
Under FASB's nonprofit standard (ASC 958, as updated by ASU 2016-14), your net assets fall into two classes. With donor restrictions covers gifts and grants the donor limited to a specific purpose or time period, or that must be held permanently, like an endowment. Without donor restrictions covers everything else, including amounts your board sets aside on its own. Board designations are reported without donor restrictions, because the board can reverse them.
Releasing a restriction, step by step
When you spend restricted money on its purpose, or the time restriction passes, the amount is released. It moves from "with donor restrictions" to "without donor restrictions" on the statement of activities, matching the expense it paid for. If releases aren't booked, restricted balances look bigger than they are and your available cash looks smaller. Grants that carry both a barrier to overcome and a right of return are conditional, and they aren't recorded as revenue until the condition is met (ASU 2018-08).
Functional expenses, and why allocation method matters
Every nonprofit reporting under GAAP has to show expenses both by nature (salaries, rent, supplies) and by function: program services, management and general, and fundraising. Shared costs have to be split with a reasonable, documented basis, such as time records for salaries or square footage for rent, and applied the same way every year. The Form 990 asks for the same breakdown in Part IX for most organizations that file the full return.
Restricted Grant Release, Illustrative example
A foundation awards a $120,000 grant restricted to an after-school tutoring program. By year-end, $45,000 has been spent on the program.
The $75,000 still restricted is cash you hold but can't use for general operations. That's the number your board needs to see.
Line
With donor restrictions
Without donor restrictions
Grant received (restricted to tutoring)
$120,000
$0
Released: tutoring costs incurred
($45,000)
$45,000
Tutoring program expenses
$0
($45,000)
Change in net assets
$75,000
$0
Allocating Shared Costs, Illustrative example
Two shared costs split by a documented basis.
Same costs, different story: unallocated, all $150,000 would look like overhead. Allocated, more than half supports programs.
Shared cost
Total
Program
Mgmt & general
Fundraising
Executive director salary (time records 40/45/15)
$90,000
$36,000
$40,500
$13,500
Office rent (square footage 70/20/10)
$60,000
$42,000
$12,000
$6,000
Total
$150,000
$78,000
$52,500
$19,500
How we handle it every month
✓ Every gift and grant classified by restriction when it's recorded, using the award letter or gift agreement
✓ Releases booked monthly, matched to the expenses that satisfied them
✓ Shared costs allocated with one documented method that holds up at audit
✓ Grant budget-vs-actual updated so overspending shows up before the report is due
Restricted Grant Release, Illustrative example
A foundation awards a $120,000 grant restricted to an after-school tutoring program. By year-end, $45,000 has been spent.
Grant received: $120,000 with donor restrictions
Released for tutoring costs: ($45,000) restricted, +$45,000 unrestricted
Tutoring expenses: ($45,000) unrestricted
Change in net assets: $75,000 restricted, $0 unrestricted
The $75,000 still restricted is cash you hold but can't use for general operations. That's the number your board needs to see.
Allocating Shared Costs, Illustrative example
Executive director salary, $90,000 (time records): $36,000 program, $40,500 management & general, $13,500 fundraising
Office rent, $60,000 (square footage): $42,000 program, $12,000 management & general, $6,000 fundraising
Total $150,000: $78,000 program, $52,500 management & general, $19,500 fundraising
Unallocated, all $150,000 would look like overhead. Allocated, more than half supports programs.
WHO WE WORK WITH
Accounting for Charities, Foundations, and Mission-Driven Organizations
If you answer to donors, grantors, and a board, we speak your language. We work with nonprofits with roughly $500K to $20M in annual revenue, anywhere in the U.S.
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Human Services & Community Organizations
food, housing, family, and workforce programs juggling many funders.
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Grant-Funded Organizations
government and foundation awards with reimbursements, drawdowns, and strict budgets.
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Education & Youth Programs
schools, tutoring, mentoring, and after-school programs with program-level budgets.
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Health & Behavioral Health Nonprofits
clinics and counseling programs mixing grants, contracts, and fees.
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Arts & Culture
theaters, museums, and festivals with seasonal revenue, memberships, and event income.
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Faith-Based Organizations
churches and ministries with designated gifts, building funds, and missions giving.
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Associations & Membership Groups
trade and professional associations with dues, events, and sponsorships.
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Growing Nonprofits
organizations that have outgrown a volunteer treasurer or a part-time generalist.
BOARD, AUDIT & 990
Board-Ready Financials, a Smoother Audit, and a 990 That Ties to the Books
Your board has a legal duty of care over the organization's finances, and your funders and auditors have their own lists of questions. When your books are current and organized by fund, program, and grant all year, those questions take minutes to answer instead of weeks.
Your audit-ready package
✓ Statements of financial position, activities, and functional expenses
✓ Net assets by restriction, with a roll-forward of releases
✓ Grant schedule and budget vs. actual by award
✓ Schedule of expenditures of federal awards (if you receive federal funds)
✓ Bank and balance-sheet reconciliations with support
✓ Contributions and in-kind gift detail
We prepare monthly financials your treasurer can present with confidence. We keep a year-round audit file, prepare the schedules your auditor requests, and answer their questions directly. And we hand your tax preparer year-end numbers already organized the way the Form 990 asks for them.
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Single audit check
If your organization spends $1,000,000 or more in federal awards in a fiscal year, including federal money passed through a state agency or another nonprofit, the federal Uniform Guidance generally requires a single audit. This threshold applies to fiscal years beginning on or after October 1, 2024. It was $750,000 before that. We help you track federal spending by award so you know early whether you'll cross it.
Cornerstone prepares monthly financials, audit schedules, and Form 990 support. Financial statement audits, single audits, and reviews are performed by an independent CPA firm. Tax filing positions depend on your facts, so please talk with us or your tax preparer about your situation.
YOUR TECH STACK
QuickBooks for Nonprofits, and the Tools Your Team Already Uses
No forced migration. We work in your accounting system and connect it to your donor database, payroll, and bill-pay tools so gifts and grants flow into the books cleanly.
QuickBooks Online
Aplos
Sage Intacct
Bill.com (BILL)
Gusto
ADP (payroll)
Bloomerang
DonorPerfect
Little Green Light (donor CRM)
Salesforce Nonprofit Cloud
Excel
Google Sheets
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QuickBooks set up for nonprofits
classes, locations, or projects mapped to your programs, grants, and restrictions, with a chart of accounts that rolls up to a nonprofit statement of activities.
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Donor database to ledger
gifts in your CRM reconciled to the books every month, so the development team's totals and finance's totals finally agree.
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Not sure what you need?
We'll tell you honestly whether your current system can handle your grants and restrictions as you grow, or whether a true fund-accounting system makes sense.
Product names are trademarks of their respective owners. Cornerstone Accounting is not affiliated with or endorsed by these companies.
QuickBooks Online, Aplos, Sage Intacct, Bill.com (BILL), Gusto, ADP (payroll), Bloomerang, DonorPerfect, Little Green Light (donor CRM), Salesforce Nonprofit Cloud, Excel / Google Sheets
HOW IT WORKS
From Year-End Scramble to Monthly Board Reports in Three Steps
01
Schedule Your Free Financial Checkup
A no-pressure call with a CPA. We look at how your books handle restrictions, grants, shared costs, and audit prep today, and tell you exactly what we'd fix.
02
We Set Up and Clean Up Your Books
We build a nonprofit chart of accounts with programs, grants, and funds, catch up and reconcile past periods, and get your restricted balances and grant activity straight.
03
Reliable Reports and Ongoing Support
Every month you get board-ready financials, grant and restriction reports, and budget-vs-actual by program, plus a CPA to help you explain them to your board and funders.
Frequently asked questions
Nonprofit Accounting Questions, Answered
FAQ
Have a question that isn't here? Email ethan@thecornerstonecpa.com or call 470-505-4218.
Walk Into Your Next Board Meeting Knowing Your Numbers.
Book a free financial checkup with a CPA. We'll review how your books handle restricted gifts, grants, shared costs, and audit prep, and give you a clear list of what to fix, whether or not you hire us.
No cost. No obligation. Talk directly with a CPA.
Prefer to talk now? 470-505-4218 · ethan@thecornerstonecpa.com