Review of Not for Profit Accounting Systems -- 2006

From the October 2006 Issue

Nonprofit organizations continue to grow at an enormous pace. The time frame of 1996 to 2004 saw a 53.5 percent increase in public charities and a 75 percent increase in private foundations. According to the IRS, at the end of 2004, there were close to 1.4 million nonprofit organizations in the United States.

While the technology needs for these organizations may vary, each one needs to establish a way of maintaining grants, keeping tracking of donors and pledges, paying employees, and producing required reports. If you’re a nonprofit organization looking for a software product to help you better accomplish these tasks, or if you’re an accountant looking to recommend such a solution, how do you go about choosing a product? To answer that question, you’ll first need to evaluate your budget. Many organizations have limited budgets, especially at the onset. Look at what you can afford today as well as what that program may offer you in the future. Do you want an entry-level product that will suffice while your organization has few needs or do you want a product that can grow along with your organization?

The products reviewed here vary widely. Entry-level products are designed for small organizations and offer quick installations, easy navigation and decent reporting options. They are also affordably priced, even for those on a limited budget. While these products provide out-of-the-box capability, they leave little room for customization or future growth.

Other nonprofits may be looking to upgrade to a more scalable product that offers increased user capabilities and additional modules for purchase. These products often fall between the entry-level products and the enterprise-level products, and they can prove to be quite

sufficient for mid-level organizations. They are usually more expensive, (but not always) and provide more scalability.

Enterprise-level products are top of the line and are ideal for nonprofits with complex needs. These products offer all of the functions as the other products but usually contain more management level capabilities and often include a fundraising module that can track detailed information about donors, including historical data.

Does this mean that you should skip over the entry-level products? No.

Do those products automatically receive lower ratings? No.

Entry-level products can be an excellent choice for those whose needs and budget are minimal. They can’t really be compared to enterprise-level products, and they don’t claim to compare. What they do claim is to help the small nonprofit with their needs, and they do it well. If they do what they claim to do, then they deserve a good rating. We can all agree that a software product designed for up to five users will not have the same capabilities as the software product designed for unlimited users. It doesn’t mean they do not do their job well.

I hope you find the reviews helpful. And don’t forget to visit the software vendor’s websites for additional information. 

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