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IRS Form 1023 Part IX (9) – Financial Data & Budget Projection

Form 1023 Part IX (9)- Financial Data – How to calculate your Budget for the Form 1023 with the Budget Projection Calculator

If you are an existing nonprofit organization, you have all the realistic financial data and budget projection shouldn’t be a problem, and you should be able to answer the following questions with ease. But if you are a new organization, and just applying for tax exemption status, this form 1023 section will look outrageously stupid, because you have no financial data as of yet, but somehow you are required to provide them. Don’t get too worked up, its’ for your own good.

Even though you have no financial records, you should provide your past (even if it consist of buying lunch for the board), your present, and at least two or three complete years into future. This is where you and your CFO has to get creative on budget projection and make up numbers. I say make up numbers because there is no other way of putting it. For lack of better word, you have to speculate on what you will earn, what your expenses will be, and what will remain at the end of each year.

Part IX (9) of the IRS form 1023 has to be done with utmost professionalism. No government office temp is going to give you any heed if you hand draw your tables or list your data in an incoherent way. Get organized and act like a pro. If you have a financial person as your treasurer which you should, put him to work.

He needs to project your financial data, expenses, from A to Z, and put them down in tables. Do not use the actual Form 1023 for the financial data; this section should go in your Form 1023 attachment sheet. The following is an example of how your financial data should be presented. Note that every table is clearly marked, and every section relates to questions asked on the form.

IMPORTANT UPDATE:

Form 1023 Budget Projection Calculator

Financial WorksheetAfter reviewing countless dreadful applications, I decided to put an automatic budget projection calculator together to make your financial projection a 5 minutes deal rather than 2 weeks long headache. Download the zip folder by pressing on the button to the left to get this calculator. It comes with comprehensive explanation of the statements and it will hopefully answer your endless questions. The calculator itself is in Microsoft Excel Format (I have included two versions for XL 97-2003 and XL 2007-2010) and it’s a printable document.

Read the instructions 100 times if you have to and make your projection wisely. This calculator is not available from anywhere else but here, and I have spent considerable amount of time perfecting it, so don’t forget to donate a few dollars to keep this site alive.

More hands-on explanation with examples follows:

Part IX Form 1023 Financial Data

A) Statement of Revenues and Expenses and Projected Data for 20xx, 20xx, and 20xx Tax Years

Line 9.  Gross receipts from admissions, merchandise sold or services performed… in any activity that is related to your exempt purposes (attach itemized list.)

The following table consists of the projected gross income from monetary donations, grants and gifts to the corporation. This includes the promotional merchandise sales as well as services rendered. The table is sorted alphabetically.

Form 1023 Financial Data Budget

Form 1023, Part IX, Line 23. Any expense not otherwise classified (attach itemized list.)

The following table consists of the corporation expenses, expenditures and spending for the shown years. Please refer to the second worksheet for further itemization. The table is sorted alphabetically.

Please note: For our 20xx expense and income report, please refer to section B: Balance Sheet for our most recently completed tax year on page 17 of this document.

Form 1023 Financial Data Budget

Further Breakdown of Expenses

Please note that the inflation rate for the years of 20xx and 20xx has been calculated based on a 5% increase annually. Daily figures are based on 30-day months. (Please see table on next page.) The table is sorted alphabetically.

Form 1023 Part IX - financial data

B) Balance Sheet (for your most recently completed tax year)

Please note:  The table below is an itemized list of the expenses and income of Transcontinental Humanitarian Corp. since its incorporation on XX,XX 20XX. The table is sorted alphabetically.

Form 1023 Financial Data Budget

The last part is you asset sheet. You need to list anything and everything that your organization owns from chairs to automobiles.

(Next Step) Instructions For Form 1023 Part X – Public Charity Status
(Previous Step) Instructions For Form 1023 Part VIII – Specific Activities

Nonprofit Bylaws - Nonprofit Articles of Incorporation - Nonprofit Conflict of Interest Policy

NOTE: If you’d like to receive the six major documents, (Articles of Incorporation, Nonprofit Bylaws, Conflict of Interest Policy, Form 1023 Attachment, Expedite Letter Sample, and Donor Contribution Form) in Microsoft Word Document format, please consider making a donation and you’ll get to download them immediately. Not only they're worth well over $1000 in value, they will save you weeks of copy pasting and formatting as they are ready to go templates which only need changing names and addresses.

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