The IRS estimates there are about 1.8 million tax-exempt organizations in the United States. While the majority of non-profits are classified as public charities, there are more than two dozen classifications used by the IRS. Regardless of the classification, all nonprofits have one thing in common: the need to manage funds properly. And while their missions may vary, public charities in particular need to manage incoming funds in the form of donations, grants, membership dues, or program income. And if your nonprofit accepts any type of restricted funds (funds earmarked for a particular program area), it would be beneficial to utilize a program designed to track and disburse those funds properly.
One of the most common misconceptions is that nonprofit software is only useful for larger organizations; that smaller nonprofits can easily use standard accounting software. The truth is, while the needs of smaller nonprofits are less complicated than larger organizations with global impact, nonprofits of all sizes can benefit from using a product designed specifically for their needs.
Unlike other specialty software products, purchasing the correct software application depends greatly on the type of funding a nonprofit receives. If your nonprofit commonly receives grant funding, it is imperative that you have a way to administer those funds properly, including the ability to record, disburse, and track those funds. Nonprofits typically have to report back to the funder at the end of the grant cycle, so being able to account for those funds can make life much easier than trying to recreate the process manually. Another area is membership management. Does your nonprofit offer memberships? If managing memberships is required, you’ll want a way to do so easily. Does the majority of your funding come from individual donors? Do you currently have a way to track both donation amounts, as well as donor information? If not, you’ll need a fundraising application that can help you manage this information properly.
Determining the answers to these questions will go a long way towards making the right decision when it comes to purchasing nonprofit software. We’ve tried to simplify the process by providing information on a variety of nonprofit and fund accounting applications.
The products included in this review range from entry level applications that will work well for smaller nonprofits, as well as comprehensive applications designed for the larger organization with more complex needs. The products also offer a variety of deployment options and run the gamut in pricing levels as well.
The following products are included in this month’s review of Fund and Nonprofit Accounting Software:
- Abila MIP Advance
- Aplos Fund Accounting
- Araize FastFund
- Blackbaud Financial Edge NXT
- Cougar Mountain Denali FUND
- Fund E-Z
- GMS Software
- QuickBooks for Nonprofits
- Sage Intacct Nonprofit
- Serenic Navigator
Much the products themselves, the features and functionality of these applications vary widely. To make it easier to determine which products are a good fit, we looked for a variety of nonprofit specific features such as the ability to customize a chart of accounts, whether the product offered multiple account segments, and whether users could track donations, or even the donors themselves. The list of features we looked for are included in the Features Chart, which accompanies the review.
Along with common features and functionality, other things that should be considered when making the decision to purchase nonprofit software is deployment options offered by the application and the ability to scale the product should your nonprofit find itself suddenly experiencing a growth spurt. Accountants working with their nonprofit clients may also want to look at things such as outside accessibility options.
It’s also important to garner as much information as possible prior to purchasing any software product, so visiting the vendor website and downloading a product demo can go a long way towards making the right decision when ultimately purchasing software. A demo can help you determine your comfort level when using the product, as well as provide more in-depth information on the features available in the product.
Whether your nonprofit or you client’s nonprofit is local or global in scope, nonprofit software can help any organization accomplish its mission by providing a better way to manage finances, grants, and donors. We hope this review points you in the direction of the application best suited for your organizational needs.
See inside July 2018
July 2018 Firm Management Channel
Firm Management Social Media: Can Your Receptionist be a Profit Center? Firm of the Future.https://bit.ly/2KaA6JS 3 Steps to ID and Fix Bottlenecks in Firm Workflow. Thomson Reuters Blog.https://tinyurl.com/yaeo9enl What a Great Succession Plan Looks Like. Rosenberg Blog.https://bit.ly/2KpRNkL Benchmarking Your Firm Against Others. Karbon Blog.https://bit.ly/2KkmE5z 3 Tips to Help Clients Through Hurricane Season. AICPA Insights.https://bit.ly/2KaNL3N […]
The New Sales Tax Paradigm: SCOTUS Rules for States in Wayfair Case
In the immediate term, the case has been remanded to the South Dakota Supreme Court for further review. In other words, assuming the final review isn’t a big surprise, South Dakota will be free to enforce its existing law as presented to SCOTUS in the ...