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Not-for-profit financial analysis is carried out by not for profit organizations. These organizations submit their financial statements to the funders, lenders, government authorities and the investors just like the profit making organizations (McCarthy, Shelmon, & Mattie, 2012). However, the focus of these financial statements analysis is different from that of governmental or for profit making organizations. Not for profit analysis emphasize on sustainability and wise management of the funds. There is no emphasizing on revenue growth or profits.  This analysis must also comply with the Accepted Accounting Principles (GAAP).

The organization I chose is Cooperative for Assistance and Relief Everywhere (CARE USA). This is the not-for-profit organization that helps the poor individuals and families. The mission of this organization is to serve families and individuals living in the poorest societies of the world. Through its global diversity CARE promotes innovative answers and campaigns for global responsibility. CARE assists lasting transformation by carrying out different activities such as providing economic opportunity, influencing decisions that are made, addressing discrimination, giving relieve in emergencies and ensuring that the capacity for self -help is strengthened.  CARE is directed by the inspirations of the community, and it pursues its mission with compassion and excellence.

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Mission statement of CARE

CARE was able to assist more than 122 million people. It has been able to achieve its mission through partnerships, experience and strategy. CARE has been able to come up with efficient programs that yield maximum impact on these poor communities due to its experience in working with the poor. Collaboration between the government and local society has also made it possible to get high returns on the funds invested. Through women and girls empowerment program CARE has been able to eradicate poverty in families and communities. CARE focus on working with women. This is because with the required resources women have the ability to assist the communities and families escape poverty. Through its programs CARE assist the people tackle the causes of poverty to enable them become self sufficient. Girls and women are marginalized groups in these areas. CARE puts significant weight on working with the women to bring change in the society.

The mission statement of CARE USA can be evaluated on the extent it is focused on meeting the needs of the poor. The mission of the organization clearly tells that the beneficiaries of its activities are the poor and the vulnerable communities. These people need the help of the organization and explain how it serves these poor people through the provision of food, education and other basic needs. CARE fits the people it serves, and its mission statement can be clearly and easily understood and tells exactly what CARE is about and the activities it carries out. For the organization to be successful it mission statement should be clearly stated, and the organization should work towards meeting this mission (Landskroner, 2001).

The organization has achieved its mission, and this can be reflected by its annual report. CARE is in more than 84 countries and has helped more than 122 million people. From the financial report, CARE has been able to carry out its activities in a transparent and responsible way.

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The financial analysis report consists of three parts: the introductory, the financial statements section and the notes to the financial statements. The introductory part contains the impact of CARE's activities on the poor communities through the stories told by individuals who have benefited from this organization. It also consists of an overview of key changes in the current fiscal year and also the expected changes in future. The letter from the management also assures the users of the financial information that the statements are consistent and precise and meet the required International Financial Reporting Standards (McCarthy, Shelmon, & Mattie, 2012).

The introductory part of the not-for-profit financial analysis gives the reader an overview of what the organization is involved in and the impact of CARE's work. There are personal stories that have been published. In these stories, the communities tell how CARE has transformed their lives. This part explains how the current year has been affected by the activities carried out in the previous years. For example, decline in revenue in 2010 due to scaling down of food programs.  The introductory part also confirms the fiscal health of the organization through its net assets balance. It explains how the assets and different programs grew in different parts of the world. The managers also declare in this part their commitment to ensure that the financial resources are managed responsibly.

The certificate of achievement of excellence in financial reporting is a prestigious award that is highly coveted by organizations. This award shows that the organization has prepared a detailed accurate report in accordance to the standards required. CARE's annual reports did not get this award.

In the transmittal letter, the main issues addressed are the different factors that have led to significant changes in the financial statements. These factors include the scaling down of the food program that has led to increase in revenue of the organization by 0.6%.  Increase   in an emergency as a result of the earthquake in Haiti also led to increase in spending during the year. CARE also states it commitment that high quality programs are executed efficiently. This is through reorganizations at the headquarters that led to saving of $ 3 million.  The organization also spent $5 million construct and implement its new grants and finance management system. This system is expected to go online in 2012, and different CARE locations in the world will be able to share common software based on the web.

Review of the financial statements

CARE is required to ensure that the audit of its annual financial statements is carried out. The donors and other funding agencies use these statements to make their decisions (Landskroner, 2001).

The auditor gave an "unqualified" audit opinion. The audit was done in accordance to the auditing standards accepted in the USA. In their opinion of the auditor, the financial statements were true and fairly presented, and they were in accordance to US Generally Accepted Accounting Principles.

The report contains the management's discussion and analysis section. This section gives more information about the financial statements and makes it easier for users to understand.  In the MD&A, the management has discussed the different programs that the organization is involved in such as children's' health, reproductive health, agriculture and natural resources, infrastructure, nutrition among others. In this section, the various subsidiaries of CARE are also listed. Significant changes in the accounting policies have also been discussed here. This includes definition of key terms used in reporting such as cash and cash equivalent, receivables, inventory, deposits and other assets. Definition of these terms will make it easy for the user to understand and know how different transactions are treated (McCarthy, Shelmon, & Mattie, 2012). The management has also disclosed all the subsequent events and contingent liabilities. Through this MD&A section, the donor or investor can understand the financial statements clearly and make informed decisions. Major funds maintained by the organization include   and contracts, government grant, in kind contributions and individual donations. These funds conform to the organization structure.

Supplementary information

The report contains supplementary information. In this part, the organization discuses further different transactions whose additional information is required by law. Items discussed in this section include further income within the total support such as income from the sale of assets, rental income and foreign exchange gains. It also includes activities that assist the mission of the organization. This includes activities such as sub granting part of the lobbying expenses related but separately incorporated organization, CARE Action Now. This organization is based on CARE's   priorities and includes influencing decisions made by the policy makers. This is done through reports, briefings and meetings based on the experience that CARE has in the third world countries.

More supplemental information is given on the use of the organization endowment funds. CARE intends to use its endowments to fund its activities in accordance to its mission. The differences in the opening and closing balances have also been explained. This information is also given on procedures used by the organization to monitor funds outside US. There is also supplemental compensation information that gives information on how the different employees are remunerated and the allowances given to them by the organization. It also gives information on how the tax is deducted from their salaries in various countries. Further discussion on transactions with interested parties is also given as supplemental information.

The report also has the consolidated statements. This combines all the financial statements of the subsidiaries of CARE.

Review the statistical section

The statistical section is part of the government Accounting and Financial Reporting principle number 44. This section guides the user in making use of the basic financial statements and other information about the government in order to be able to evaluate the government's economic condition. Since CARE is not a governmental body, it does not contain this statistical section.

The notes to financial statements include the component units of CARE. These are MOFAD, CARE India Trust and Access Africa Fund. The financial statements of CARE and its affiliates have been consolidated to give the group's financial statement as per the Generally Accepted Accounting Principles (McCarthy, Shelmon, & Mattie, 2012).  The notes do not indicate any components that have not been included. The organization has not entered in joint Ventures with any other organization.

Conclusion

From the evidence in the financial report and tax form IRS 990, CARE has achieved its mission in the various countries where it is located. It has complied with the requirements and disclosed all the relevant details in the IRS 990 form. Evidence of accomplishment of its mission is shown by the large number of poor people and marginalized group it has been able to help eradicate poverty.  The personal stories in the annual report show that the organization is making a positive development in people’s lives. These people appreciate the efforts of CARE.

The management of CARE has also taken its responsibility to ascertain ensure that the financial statements abide with the accounting principles and they are audited as required. The management of the organization is, therefore, transparent and responsible. The organization has also complied with the tax laws and filed its returns even though it is exempt from taxes. In my opinion CARE has been able to accomplish its mission.

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