The Importance of Financials in the Nonprofit Sector
Nonprofit organizations play a crucial role in addressing social and economic issues. However, these organizations depend on funding from donors and grants to carry out their programs successfully. Therefore, understanding their financial position is essential to ensure financial sustainability and accountability. One way to assess a nonprofit’s financial health is by reviewing its annual 990 form. In this article, we will decode Acumen Fund’s 990 form and shed light on important financial concepts.
What is Acumen Fund?
Acumen Fund is a nonprofit global venture fund that invests in social enterprises providing essential goods and services to the underserved population. Acumen was founded in 2001 by Jacqueline Novogratz, with a mission to change the way the world tackles poverty. Since then, Acumen has invested $135 million in 136 companies across Africa, Asia, Latin America, and the United States.
An Overview of Acumen Fund’s 990 Form
The 990 form is a tax document that nonprofit organizations in the United States must file annually with the IRS. It provides information about the organization’s mission, programs, governance, and financial activities. The form also allows donors and other stakeholders to evaluate the nonprofit’s financial health and transparency.
Acumen Fund’s 990 form provides valuable insights into its financial activities. For instance, in 2019, Acumen’s total revenue was $19,769,233, and its expenses were $17,436,841. The organization also reported investments totaling $14,480,928 that year. The form also shows the salaries and compensation of key executives and members of the board of directors.
Understanding the Key Financial Concepts in Acumen Fund’s 990 Form
1. Revenue: Revenue refers to the funds a nonprofit organization receives from various sources, such as donations, grants, and investments. Acumen’s revenue in 2019 was $19,769,233.
2. Expenses: Expenses refer to the costs incurred by the nonprofit organization in carrying out its programs and activities. In 2019, Acumen’s expenses were $17,436,841.
3. Net Assets: Net Assets refer to the organization’s total assets minus its liabilities. It is also referred to as the nonprofit’s equity or fund balance. Acumen’s net assets in 2019 were $174,058,497.
4. Investment Return: Investment return refers to the gains or losses made on the nonprofit organization’s investments. In 2019, Acumen reported investments totaling $14,480,928.
Conclusion
In conclusion, by decoding Acumen Fund’s 990 form, we can gain valuable insights into its financial health and management practices. It is crucial for nonprofit organizations to maintain transparency and accountability in their financial activities to gain the trust and support of donors and stakeholders. Understanding financial concepts and reviewing the 990 form can contribute to making informed decisions about supporting nonprofits that align with your values and mission.
