10 Nonprofit Accounting Software '24 Based on 23K+ Reviews

The importance of nonprofit accounting software is increasing day by day. Numbers are there to prove: in 2022, donors gave a single contribution of 58 U.S. dollars on average to causes, for example related to wildlife or animal welfare. For organizations focused on hunger and poverty, the average monthly contribution stood at 46 U.S. dollars.¹

With such large sums of money at stake, the effective use of this money requires effective accounting. But there are high number of players in this market, thus the choice is not always easy. In this article, we will present in detail the accounting software for large, medium and small companies.

Top nonprofit accounting software for enterprises

Table features

• This table only includes ERPs with comprehensive services and high integration capacity.

We have analyzed ERPs on the list and their function in accounting in-detail:

• Accounts Payable ERP Integration in ’24: 6 Ways & 5 Features
• Dynamics 365 in Accounts Payable Automation: In-Depth Review
• NetSuite Accounts Payable (AP) Automation in 2024
• Blackbaud Accounts Payable (AP) Automation in ’24: In-Depth Review
• Sage Accounts Payable (AP) Automation in ’24

Best nonprofit accounting software for SMBs

*Xero’s given prices on the table are only applicable for the US.

**QuickBooks can use 50% discount & new customers get a discount for each of the packages given here.

Table features

• Vendors in the table are sorted out according to the number of reviews extracted from major review websites such as Capterra, G2 and Trustradius.
• The employee numbers are extracted from Linkedin

Vendor selection criteria

10 nonprofit accounting software given at the table are selected in following criteria:

• Number of employees: Vendors with 5+ employees
• Review numbers: Vendors that received 100+ reviews in major reviews sites of G2, Capterra and TrustRadius
• Average scores: Vendors with more than 4.0+/5 average score

The analysis of top 10 nonprofit accounting software based on key features

* Form 990: Details the organization’s financial activities such as revenue sources, expenses and commitment to nonprofit status.

**Form 1099s: includes information about the seller, the property, the date of the transaction, and the gross proceeds. The primary aim is to ensure that any capital gains from the transactions are properly reported to the IRS.

Table features:

• Table is divided and sorted according to the software types. ERPs were placed first because they provide the most comprehensive service at once. The solutions include:

• CRM
• payroll software
• accounts payable
• risk management & compliance
• The forms were selected based on their importance to nonprofit accounting software and the high number of mentions on the internet.
• All software includes donation tracking tools.
• All the software on the table is cloud-based.

What to consider when choosing nonprofit accounting software?

When selecting accounting software for a nonprofit organization, there are several critical factors that should be taken into consideration. The software should meet the unique needs of fund accounting within the nonprofit sector. Below are key points to consider, each aligned with specific aspects of nonprofit fund accounting and the functionality of accounting software programs:

Common features

Donor management tools

Look for features that allow the organization to track donations, including tools for recording donor information, managing recurring donations, and analyzing donor trends to aid in fundraising efforts.

Bookkeeping tools

Confirm that the software provides bookkeeping tools necessary for the unique aspects of nonprofit accounting, including fund accounting, expense tracking, and managing income and expense allocations.

Financial reporting

Ensure the software supports detailed financial reporting needs specific to nonprofit fund accounting, including the ability to perform income and expense allocations across various funds and projects.

Differentiating features

Cost

Evaluate the pricing structure of accounting software for nonprofits to ensure it aligns with the budget constraints typical of nonprofit organizations. Consider not only the initial cost but also any ongoing fees for updates or additional modules.

Support

Determine the level of support provided for the fund accounting software, focusing on the availability of assistance designed for the challenges nonprofit organizations might face.

Integration

Assess the software’s ability to integrate with other systems used by the nonprofit organization, such as grant management tools, CRMs and other financial systems, to realize expense tracking and financial management without the need for manual data entry.

Fixed asset tracking

Verify that the software offers capabilities for tracking fixed assets, an important aspect of fund accounting for nonprofit organizations, which includes managing asset depreciation and ensuring assets are allocated correctly among different funds or projects.

Challenges nonprofit accounting software to pay attention

Source:²

When considering accounting software for nonprofit organizations, you should acknowledge specific challenges they face, which can significantly impact their financial management and fund accounting practices. Here are key areas where nonprofit accounting software needs to offer solutions:

• Rising operating expenses: Nonprofit organizations often struggle with escalating costs in various operational areas. Accounting software for nonprofits should provide detailed expense tracking and management tools to help control and analyze these increasing expenses.
• Inadequate finances: Many nonprofits operate with tight budgets and limited financial resources. To tackle this, fund accounting software needs to offer functionalities that enable precise income and expense allocations.
• Limited staff capacity: With often minimal staff, the need for an accounting software program that is intuitive and easy to use becomes hard since it reduces the effort required for financial management.
• Difficulty recruiting and retaining quality staff: Nonprofit organizations can struggle to attract and keep skilled personnel, including those proficient in fund accounting. Therefore, if a general accounting software, it should require minimal specialized training to operate.
• Economy/inflation: Economic fluctuations and inflation can affect a nonprofit’s financial stability. Nonprofit fund accounting software should offer financial reporting tools to monitor the organization’s financial health and adapt to economic changes.
• High staff turnover: The sector often experiences significant staff turnover, which can disrupt financial management continuity. Accounting software for nonprofits should have documentation and training resources to realize quick onboarding and knowledge transfer for new staff.
  

External links

• 1. “Nonprofit organizations average donations 2022 | Statista” Retrieved on 5 April, 2024.
• 2. “U.S. nonprofit organizations: biggest challenges 2022 | Statista” Retrieved on 5 April, 2024.