Finding the Right Nonprofit Accounting Software: An In-Depth Guide

Nonprofit organizations face unique financial management and reporting challenges. With fund accounting requirements, stringent regulations, donor expectations for accountability, and often limited resources, choosing the right accounting software is critical.

This comprehensive guide examines the specialized nonprofit accounting software market. It outlines must-have features, leading solutions, pricing models, and expert tips so you can make the best decision for your organization. Whether just starting out or looking to upgrade old systems, read on to find your perfect nonprofit accounting fit.

Why Nonprofits Need Tailored Accounting Tools

While for-profits focus mainly on tracking profits and losses, nonprofits have extra layers of financial complexity. As Janet Camarena, Director of Transparency Initiatives at Foundation Center, explains:

"Nonprofits and foundations need to track restricted funds from varied sources, allocate expenses across programs, manage grants and contracts, report to funders and regulators, and analyze data across multiple dimensions. Generic small business accounting systems just won‘t cut it."

On top of this, nonprofits must comply with fund accounting standards and IRS form 990 reporting regulations to maintain tax-exempt status. Managing this without the right tools leads to errors, compliance issues, and reporting delays.

The right software automates transactions, keeps accounts organized, provides audit trails, enables robust reporting to stakeholders, and ensures legal/regulatory requirements are met.

Core Features to Look For

With needs unique from typical businesses, specialized tools have emerged to meet nonprofits‘ accounting challenges. Here are some key features to look for:

Fund accounting – Track various revenue sources and expenses across funds, programs, campaigns, etc.

Budgeting – Set budgets by fund or program, with controls and alerts when approaching limits. Model multi-year budgets based on funding sources.

Grant management – Track grant money and produce financial reports for funders showing spending.

Reporting – Generate and customize reports on budgets, expenditures, fund balances, cash flow, assets/liabilities, programs, appeals, etc.

Online donations – Accept one-time and recurring online contributions while capturing key donor data.

Automation – Automate tasks like expense allocations across funds, bank feeds and rules-based transactions, payment approvals, etc. to reduce manual work.

Mobile functionality – Allow finance team members to approve transactions, view reports and dashboards, manage expenses etc. from mobile devices.

Integrations – Connect to external systems like CRMs, payroll, payment processors, banks etc. avoiding manual data entry across systems.

Dashboards – Get instant visibility into key metrics like cash balances, expenditures vs. budgets, program costs, and other KPIs tailored to various users with interactive visualizations.

Compliance – Ensure software adheres to nonprofit accounting standards and enables accurate form 990 reporting for maintaining tax exempt status.

Ease of use – Well-designed, intuitive interface enabling finance teams to use the system effectively with minimal training required.

Leading Nonprofit Accounting Systems

With an overview of specialized capabilities, let‘s explore some top nonprofit accounting platforms on the market today:

1. Aplos

Overview – Aplos is an online accounting system built specifically to meet nonprofits‘ unique needs. It enables centralized financial management and reporting while ensuring compliance.

Key Features

  • Robust fund accounting and reporting
  • Budget development tools
  • Integrated payment processing
  • 990 report builder
  • Simple interface and adoption

Ideal For – Small to mid-sized nonprofits looking for an affordable cloud-based solution that‘s easy to use.

Pricing – Starts at $40/month for up to $1 million annual revenue. Enterprise pricing available.

2. Blackbaud Financial Edge

Overview – A leading fund accounting solution catering to larger-budget organizations. It‘s feature-packed with a higher price tag.

Key Features:

  • Deep functionality for complex reporting needs
  • Global consolidation across entities
  • Advanced analytics and customizations
  • Integrates with Blackbaud CRM and payment services

Ideal For – Larger nonprofits with complex financials, multiple locations/programs, and growth ambitions.

Pricing – Quote-based enterprise pricing generally starting around $25,000 for an on-premise license. Cloud option available.

3. Intacct

Overview – A cloud financial management system with robust capabilities scaled for midsized to large nonprofits.

Key Features:

  • Automate processes across the system
  • Real-time visibility into finances
  • Custom, dimensional reporting
  • Packaged integrations with CRMs, HCM systems, banks and more

Ideal For – Nonprofits with at least $10 million in annual revenue needing advanced reporting and analytics.

Pricing – Mid-market pricing starts at $799/month based on revenue. Enterprise quotes available.

4. Oracle NetSuite

Overview – A full-scale ERP system with nonprofit templates supporting end-to-end financials and broader business processes.

Key Features:

  • Unified solution covering accounting, ordering, billing, inventory and more
  • Configurable reports, dashboards and analytics
  • Robust security and controls
  • Packaged integrations with payment gateways, banks etc.

Ideal For – Complex, fast-growing nonprofits needing an integrated system to run all back office operations.

Pricing – Quote-based enterprise packages starting around $40,000 per year.

5. Sage Intacct

Overview – Cloud-based accounting software with dimensions and dashboards tailored for nonprofits.

Key Features:

  • Multi-dimensional general ledger
  • Flexible, customizable reporting
  • Automate processes like allocations and approvals
  • Mobile expense management

Ideal For – Nonprofits with complex financials needing flexible analysis and reporting.

Pricing – Mid-sized to enterprise pricing starting at $2,500/month. Volume discounts available.

6. Abila MIP Fund Accounting

Overview – On-premise fund accounting software strong on accounting, analytics and reporting.

Key Features:

  • Detailed tracking and reporting by fund, program, campaign etc.
  • Built-in key nonprofit financial statements and ratios
  • Drag-and-drop report builder
  • Advanced security configurations

Ideal For – Medium to large nonprofits running multiple funds/programs and requiring detailed tracking.

Pricing – Quote-based pricing generally starting around $15,000 for first year license, support and upfront services.

7. AccuFund Accounting Suite

Overview – Cloud and on-prem nonprofit accounting solution providing core financials, reporting and analysis.

Key Features:

  • Fund accounting
  • Budgeting tools
  • 990 reporting
  • Custom reporting writer
  • User permissions, access controls and audit functionality

Ideal For – Small to mid-sized nonprofits looking for robust capabilities without the enterprise price tag.

Pricing – Starts at $3,000/year including support based on revenue size. Scalable to grow.

8. Altru by Community Brands

Overview – Integrated cloud solution including fundraising tools, nonprofit CRM and accounting.

Key Features:

  • Track donors and pledges
  • Fund accounting
  • Integrated data and processes from fundraising through accounting
  • Robust reporting

Ideal For – Nonprofits looking for an end-to-end solution managing fundraising, donors and finances together.

Pricing – Quote-based packages starting around $7,500 a year for small organizations and scaling up based on needs.

As this overview demonstrates, there‘s tremendous variety in the market when it comes to price points, deployment models, features, integrations and ideal nonprofit sizes. Conducting thorough due diligence is critical before selecting a system.

Key Software Selection Considerations

With many solutions to evaluate, focus decision-making using criteria like:

  • Immediate features vs. growth potential – Will current needs be met, while also providing long-term scalability?

  • Budget – How does total cost of ownership fit with current finances and future investment capacity?

  • Ease of use – Is the system intuitive for staff to efficiently perform daily tasks after reasonable training?

  • Fund accounting needs – Does functionality support required tracking and reporting by fund, program, department etc?

  • Reporting – Can staff easily obtain and customize reports needed for stakeholder visibility without relying on IT?

  • Integration – Will software connect required peripheral systems like payroll, donations, billing etc. to synchronize data?

  • Cloud vs. on-premise – Does available IT infrastructure and skillset better suit cloud or installed system?

  • Data security – Does vendor provide assurance that financial data and donor information is safeguarded?

  • Support and training – Is there internal expertise to support the system or does the vendor provide these services?

Once requirements are fully scoped, nonprofits can shortlist tools that best align and demo top contenders. With stakeholder signoff, they can then prepare budgets, assign implementation teams, plan training and slowly roll out software to users. Patience is critical – even after purchase, realizing value takes months.

But with the right choice and effective change management, the payoffs can transform financial operations.

Emerging Nonprofit Technology Innovations

While critical capabilities are now mainstream, the nonprofit accounting software market continues advancing quickly with solutions leveraging innovations like:

  • Artificial intelligence – Natural language processing streamlines certain tasks like query responses, report building and expense classifications saving time.

  • Enhanced analytics – Integrating external datasets and using predictive modeling gives deeper insight into issues like budget impacts, program ROI and revenue changes.

  • Expanded mobility – Optimized apps allow field staff to efficiently enter expenses, approve invoices, manage budgets and view reports from anywhere.

  • Deeper integrations – Tighter connections between systems eliminates re-entries and keeps data synced in real time across fundraising databases, ERPs, HCM tools and more.

  • Improved security – Advancements like enhanced access controls, stronger encryption, third-party audits and integrated threat detection better safeguard nonprofit data.

While early adopters may want to leverage these innovations as they emerge, for many nonprofits, core accounting capabilities still take priority over bleeding-edge tech when allocating limited budgets.

Start Finding Your Fit

Accounting lies at the core of nearly all nonprofit operations. Choosing unsuitable software can severely inhibit an organization‘s ability to secure funding, demonstrate good stewardship and ultimately further its mission.

This guide outlines specialized considerations, leading solutions and tips so nonprofits select the best technology fit. Taking time to thoroughly evaluate options against concrete criteria and business needs leads to smart investments and improved financial fitness over the longer term.

With the right accounting foundation, nonprofits can better manage fluctuations in fundraising and grants to keep focused on driving meaningful social impact – not fighting software.