The 6 Best Nonprofit Accounting Software in 2023

The Fundraising Center screen on Aplos

• Online donations and fundraisers: Aplos can help you create forms to accept donations online and during fundraising events. It also has a dedicated portal where donors can view and track their donations and update payment details.
• Recurring donations: If some of your members donate regularly or through tithes, you can set up recurring donations to make it easy to schedule donations, print out statements, and update payment information.
• Website builder: One of the most unique features of Aplos is its website builder, which is best for nonprofits that host fundraising events and use websites for registration and donations.

Aplos is our choice for the overall best nonprofit accounting software because it has an outstanding set of general accounting features, and its key features are tailored to nonprofit operations. We consider it a powerful accounting application for medium-sized nonprofits because it provides end-to-end solutions for managing donors and members.

We recommend the Advanced Accounting package for its valuable features, such as fixed asset tracking and income and expense allocation. It is also ideal for faith-based organizations with few employees. See how Aplos benefits churches in our evaluation of the best church accounting software.

Customizing QuickBooks Online as a Nonprofit in Advanced Settings

• Assisted bookkeeping option: Through QuickBooks Live, you can access an expert QuickBooks bookkeeper to help you organize your books, classify transactions, and analyze your financial statements. Given that nonprofits follow different accounting standards than for-profit organizations, you’ll need someone who understands and practices nonprofit accounting.
• ProAdvisors: It is very easy to find a local bookkeeper that can help you with your QuickBooks Online account. They can even log directly into your account to review what you’ve done and make corrections. Read our guide on how to find a QuickBooks ProAdvisor.
• Location and class tracking: Your nonprofit can use location and class tracking to segregate activity by fund and by program service. You can also add customized tags to transactions for further tracking. See our article on customizing QuickBooks Online for nonprofits.
• Outstanding inventory features: If your nonprofit sells goods, QuickBooks Online can help you keep track of inventory levels efficiently and calculate your cost of goods sold (COGS), so there’s no need to get another third-party app just for inventory tracking.

As our best small business accounting software, QuickBooks Online is a versatile and flexible accounting solution that can adapt to a nonprofit—we have a guide on how to set up QuickBooks Online for nonprofits. It also made our list because of its outstanding bookkeeping assistance available through QuickBooks Live.

Although it is primarily for for-profit organizations, you can customize it for nonprofit use by updating its chart of accounts. We highly recommend the Plus plan because of the location and class tracking features. However, Advanced is also an excellent choice if you require more than five users.

Assigning Expenses by Class in QuickBooks Premier Plus Nonprofit Edition

• Nonprofit chart of accounts: Unlike QuickBooks Online, QuickBooks Premier Plus Nonprofit gives you, by default, a nonprofit chart of accounts. These accounts are compliant with nonprofit accounting standards for classifying assets, liabilities, revenues, expenses, and equity.
• Industry-specific reports: This version of QuickBooks can generate nonprofit reports and financial statements like the statement of activities, statement of financial position, statement of functional expenses, and statement of cash flows. You can also generate special reports like donor list summary, contribution report, and advanced reporting tools.
• Unlimited customer support and product updates: With the new subscription-based feature for QuickBooks Premier plans, users can get unlimited support and product updates at zero cost.

QuickBooks Premier Plus Nonprofit is a desktop software tailored to nonprofits. It can help users manage donations, grants, and encumbrances and compute the taxes to report on IRS Form 990. Since QuickBooks Desktop is now subscription-based, you can access the newest features while subscribed—in the old license-based version, you couldn’t update to the latest version until the license expires.

If you’re looking for web-based software, we recommend choosing QuickBooks Online for an all-around accounting solution or Aplos for its accounting functions plus nonprofit-specific features.

Modifying Chart of Accounts in Wave

• Free accounting and invoicing: Wave is free forever for accounting and invoicing. You can use it if you’re organizing short-term or small nonprofit events and projects needing basic income and expense tracking.
• Payroll tax assistance: Wave gives tax filing assistance and calculation for tax service states―Florida, New York, Georgia, Illinois, Arizona, California, Indiana, Virginia, Washington, Minnesota, North Carolina, Texas, Tennessee, and Wisconsin―and payroll tax calculation for the rest of the states, which are self-service states.

Wave has no industry-specific features, but if you’re a volunteer treasurer for a small charity with one program service and one fund, it has a good set of features to streamline accounting for donations, tax receipts, and payroll. Nonprofits with multiple locations can even set up each location as a separate entity to segregate information—but it won’t be able to help you combine the information when needed.

The platform is easy to use, even for novice accountants or treasurers, but you can seek personalized coaching from a Wave Advisor if necessary. However, unlike QuickBooks Online, it can’t separate income and expenses by classes to mimic fund or program service accounting. If you need to track activity for more than one fund or one service program, then you’re better off spending money on better software like QuickBooks Online.

Encumbrance Accounting Module in NonProfit+

• Grant and donation management: Grants and donations often come with conditions as to how they’ll be used. NonProfit+ can help you manage these grants and donations based on the donor-imposed conditions through a dedicated module.
• Intercompany accounting: If you have a nonprofit with several organizations, NonProfit+ is great accounting software for consolidating financial statements.
• Board management: NonProfit+ administrators can grant board members access to the software. This feature enables board members to view grants and donations in real-time without having to ask for a report.

We selected NonProfit+ by Acumatica as one of the best nonprofit accounting software because it allows users to manage donor contacts and track donation sources easily. It also lets you generate customized reports by activity and schedule emails to send out to donors.

It’s a terrific choice for nonprofits receiving restricted funds since it has a restricted fund management module that allows you to define and restrict the uses of restricted donations. However, despite having the most comprehensive nonprofit features on our list, it lacks transparent pricing and is complicated, so many small nonprofits may need to consider an alternative like Aplos.

Blackbaud Dashboard

• Grant management: You can accept and track grants as well as manage grants based on the conditions set by the board or the grantor.
• Budgeting: Managing your nonprofit assets starts with budgeting. Financial Edge NXT allows you to create unlimited budgeting scenarios, create department budgets, consolidate department budgets to an operating budget, and implement rollover budgets.
• Accounting: Aside from nonprofit features, it offers competent accounting functions like creating purchase orders (POs), invoices, and bills.

If you’re currently relying on major foundation or government grants for funding, Blackbaud Financial Edge NXT is comprehensive enough to track both simple and complex grant requirements. With it, you can specify how your financial data looks on reports and break your accounting structure down to a very detailed level if required.

The program is also ideal for organizations that require consolidated reporting, thanks to its consolidation management module, which allows users to merge financial statements across multiple organizations. On the downside, it lacks transparent pricing, is complex, and requires a lot of training and support to get up to speed on the basic functionality.

Fund accounting is a method of accounting that tracks and reports on the financial activity of specific funds or programs within an organization. It is essential for nonprofit accounting software because it allows organizations to stay compliant with grant requirements by keeping detailed records.

You should first evaluate your organization’s financial management needs and then consider the software provider’s features, cost, ease of use, and level of customer support.

Nonprofit accounting software helps organizations track donations and grants, manage budgets, and generate financial reports. It also saves time, reduces errors, and ensures compliance with nonprofit accounting standards.