Helping Not-for-Profits with Better Accounting

From the Nov. 2009 Issue

We all know Not-for-Profit (NFP) organizations that are doing exceptional work. Whether you are directly employed by an NFP, do charitable work for an organization or are involved in pro bono work, many accountants help NFP organizations accomplish their missions. With your accounting skills, and armed with the knowledge of better software for these organizations, you can affect great change.

WHAT IS NEEDED?
According to SBA data, of the six million businesses in the United States, about 10 percent are NFPs. These businesses may have very small operating budgets to very large ones. The level of accounting software needed will vary by size and complexity. Some NFP organizations need fund accounting where others can be quite well served with regular accounting software. FASB 117 and GASB compliance, and special re-ports for boards, web presence, volunteer activity, gift-ing, donors and special events may be some of the requirements.

If your NFP has fundraising activities, this can add an additional level of complexity to your software needs. First, you should decide if you want your fundraising software to interface to your accounting software. Next, if you have development officers, you should assess with them how much information they need and how easily accessible it should be. Some systems enable web access or hand-held access in addition to the donation history. Incorporation of outside research for identifying suspects may be a factor, as well.

Your software system may need to interface with both constituents and donors via the web. If you have this need, you should look for features that support building web information dynamically from inside your system. If you are going to accept donations via a web interface, you should make sure your supplier is PCI compliant.

Finally, consider your users. How sophisticated are they? Do you have a regular stream of volunteers that would use your system? How much information can your organization really use? Do you need analytics for spotting trends including donations, needs, fraud and dissecting other information? Understanding your needs before considering products is mandatory.

WHAT IS AVAILABLE?
The number of good NFP software suppliers in the U.S. market is relatively small. A good working list can be found at: www.accountingsoftwareworld.com/industry_solutions/not_for_profit.

Key publishers with products to consider include those listed below, as well as Cougar Mountain Software, FUND E-Z and GMS.See the 2009 Not-for-Profit product review.