2009 Review of Not-for-Profit Accounting Programs

From the January 2009 Issue

For nonprofit organizations, change is a way of life. As creative as they are diverse, the ever-changing landscape of granting opportunities, funding requirements and reporting requests keep them agile. Discovering new ways to recruit donor and volunteer support even in economic volatility — while accomplishing their mission — happens time and again. Often, their choice of accounting software limits their efficiency to what they can re-produce manually to meet their divergent needs.

When considering accounting software for a nonprofit organization, management needs must be considered. The management capabilities, while they cannot be ignored, are as different for every group as their constituency and mission. This review focuses purely on the accounting aspects of these software titles. If management functions are not within the accounting software package, decisions will ensue regarding possibilities of integration or, at the very least, import/export capabilities to eliminate duplication of efforts. In many instances, particularly in smaller organizations, accounting or management functions are performed by volunteers, leading to emphasis in considering security, scalability, interface and training options.

If you were trying to compare apples to pineapples, you may think they might sound similar, but by simply looking at them, you realize they are not. In fact, they are only alike in the fact that they are fruit. In size, structure and price they vary greatly. Likewise, a local parent/teacher organization cannot compare its structure with the likes of the United Way, although their accounting and reporting needs are in many ways the same.

With the new Form 990 waiting in the wings, management of information has become more critical than ever. While much of the form is simply rearranged, the bulk of the new questionnaire is not the traditional financial focused. However, since the questions fall into the arena of financial responsibility, the capture of this information naturally falls into step with grant reporting and contribution and payment records. The ability to capture the roles and relationships of those interacting with our organizations has never been more critical. Rather than asking us to maintain redundant databases and spreadsheets, our software vendors that offer management modules, integration or customization will help us meet these compliance needs.

Rather than rate these software titles comparatively, as they are different fruit indeed, we have considered them in relation to the market they are designed to serve. When searching for a nonprofit accounting package, researching the needs and investment budget for the organization will give you the best basis for that specific comparison. You can also then bring the management functions into focus to potentially meet the nonprofit organization’s complete needs.

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