What is the best accounting software for nonprofits and charities?

Fund accounting is the core requirement - the ability to track money in separate buckets (funds) and restrict spending to specific purposes. Grant tracking, Form 990 reporting, and donor management are also important. Standard accounting software often lacks these features.

Restricted versus unrestricted funds is a concept unique to nonprofit accounting. A restricted grant can only be spent on specific activities defined by the donor. If you spend restricted funds on anything else, you are violating the terms of the grant - potentially triggering repayment or future funding loss. Software that enforces fund restrictions protects the organization from inadvertent violations.

Sage Intacct is the AICPA-preferred solution for nonprofits and offers excellent fund accounting and grant management. QuickBooks has a nonprofit version with basic fund tracking. Aplos is a simpler, more affordable cloud option built specifically for nonprofits and churches.

MIP Fund Accounting (formerly Abila) is another strong choice for mid-size nonprofits and government entities. Blackbaud Financial Edge NXT is designed for larger nonprofits with complex requirements. The right choice depends on your organization's size, the complexity of your grant portfolio, and whether you need a system that integrates with donor management software.

Note.now can support basic nonprofit accounting needs - tracking income by source, managing expenses by program, and generating financial reports. For organizations with complex grant restrictions or large endowments, a dedicated nonprofit platform like Aplos or Sage Intacct may be more appropriate.

Small nonprofits - community groups, local charities, informal associations - often find that Note.now handles their needs adequately using project tracking to approximate fund accounting. The tradeoff is that you need to be disciplined about consistent categorization, since the software does not enforce fund restrictions automatically the way dedicated nonprofit tools do.