How can a nonprofit maintain net assets if depreciation expense is 25% of overall budget?
A nonprofit organization faces the risk of declining net assets as depreciation and amortization expenses from a property purchase account for 25% of its overall budget. This article analyzes its financial difficulties, proposes potential solutions, and invites professionals with similar experiences to share insights.
My nonprofit went into real estate by purchasing a building that dwarfs the core c3 on the balance sheet. So depreciation/amortization expense is killing me. It seems like the only way for me to maintain net assets is to have a surplus greater than depr/amort and then lock it up in cash (or other assets). That's very onerous. Otherwise my net assets will eventually fall to zero and below....Anyone with experience dealing with this?