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Confused by the term"capital" in the nonprofit accounting world?

Capital - money available for an organizations use in business transactions.

Capital projects - purchase or lease of a building; renovation (change in physical space i.e. a
building/facility) or construction project; relocation or increase in number of sites, large scale
equipment purchases (for example equipment cost exceeding $15 thousand dollars).
Dollar size of Capital projects:
  • Minor - often capital project items less than < $5,000 (five thousand dollars)
  • Major - often capital project items more than > $15,000 (fifteen thousand dollars)
Capital improvements-A facility or equipment upgrade (this does not include maintenance and repair work) - the capital improvement items must have a life span of more than one year
Dollar size of Capital improvements:
  • Minor - often capital improvement items less than < $5,000 (five thousand dollars)
  • Major - often capital improvement items more than > $15,000 (fifteen thousand dollars)
(more to come on depreciation, capitalization and Statements of Cash Flow - just too much info for now)
Capital campaign - a fund raising drive that excludes a nonprofits operating budget and is only for the
purpose of raising money for a facility or a for large scale equipment purchases - these funds can be raised to create a nonprofit endowment fund or to increase a nonprofits unrestricted reserve funds.
Special note:

What is a nonprofit  Endowment?
A financial asset donation made to a non-profit group or institution in the form of investment funds or other
property that has a stated purpose at the bequest of the donor. Most endowments are designed to keep the
principal amount intact while using the investment income from dividends for charitable efforts

Read more:
What are nonprofit Reserves?
The portion of unrestricted net assets that are available for use in emergencies to sustain financial operations in
the unanticipated event of significant unbudgeted increases in operating expenses and/or losses in operating revenues
Read more: http://www.nccs2.org/wiki/index.php?title=Nonprofit_Operating_Reserves
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3 Comments to Confused by the term"capital" in the nonprofit accounting world?:

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binary options trading on Thursday, April 25, 2013 4:02 AM
The information about capital and capital improvement is very helpful for me. These funds can be raised to create a nonprofit endowment fund.
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Stock Cash Market Tips on Thursday, January 21, 2016 1:27 AM
To the point definition of capital you explained here i.e "money available for an organizations use in business transactions." I really appreciate this blog is very informative.
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