My clients often ask me why they need to detail budgets and account records in order to apply for grants. The truth is, asking for grant money is not very different from applying for a loan because of this essential point: while funders may not require monetary repayment, they do want you to demonstrate financial responsibility because it is their money that they are gifting you to make them look good. They will pay to support your philanthropic missions; they will not pay to have you misrepresent their goodwill, reputation, mission, or misappropriate their funds. In other words, you can operate your nonprofit; you may not vacation in the Bahamas on their dime.
With that, allow me to share this: regardless of the honorable work your non-profit is undertaking, you
cannot execute your mission if you deprive your organization of responsible and pro-active fiscal management. You must place fiscal management as a top priority for your sustainability plan (and yes, you should develop a sustainability plan and detail it in your grant application as well).
You cannot execute your mission if you deprive your organization of responsible AND pro-active fiscal management. Is that clear?
This is critical to understand because establishments that do not properly manage funds will inevitably perish. This is true for non-profit and for-profit entities alike, despite your organizational entity’s size,
magnitude, community impact, or longevity (or lack thereof). For those who are start-ups, even in the beginning stages, being “new” is not a license to neglect the economic health of your agency. This
article will offer some free and inexpensive options that may assist you in keeping track of your money so that you can apply for grants, and potentially maintain a long-term relationship with your funders. My hope is to help you regardless of the amount of time you have been operating. If you are new, it is likely that you may not have much of an operating budget because you are just getting started (and starting anywhere outweighs not starting at all). If you have a lengthy working history, you are likely not interested in spending more than necessary to implement reliable accounting software. In either case, know that you can build the need for software into your grant application if the grantor is willing to pay for it. In the recent past, I have successfully argued that the need for software is part of the evaluation process where transparency is vital. The overall goal is to be able to maintain a comprehensive and robust software that grows along with your agency’s operations and reach into the community.
When your nonprofit stays breast of new technologies and tools, it can more easily achieve its mission with less effort and transparency for fundraising. And just for the record, funders, and communities like transparency- it holds everyone accountable for doing what they say they will do. It is equally important that your software is dependable, effective, easy to use, and operated by competent personnel (because the accounting practices, stewardship of fund management, and reporting matter, too).
1. QuickBooks is the most vastly used accounting software for nonprofits and small businesses because it allows access via your web browser or through their app. It can be operated in real time at any time and in any setting, and connected with other apps such as BodeTree or DonorPath to assist in organizing financial information. The combination of these technologies affords the opportunity to also view donor information to assess and maximize giving trends.
2. Aplos is designed with nonprofits in mind. It allows multiple
users within one organization as well as a thorough tutorial to train staff
and trusted volunteers. This system is designed mainly for churches, who typically don't have to file a 990 or 990N.
3. FastFund Online is the only software as a service (SaaS) solution that flawlessly integrates nonprofit fund accounting, fund raising (customer relationship management or CRM) and payroll in a single solution.TurboCASH is a customer favorite because it is free. Because of this, it is ideal for start-ups. The program includes automatic billing, accounts payable and receivable, invoicing, credit processing and other functions. It runs on Windows, Mac and Linus and is dependable.
4. xTuplePostBooks includes accounting software, CRM tools, and enterprise resource planning (ERP) features. It is user friendly but is limited to one free user per organization- additional users come at a cost.
Surely there will be other programs that are beneficial to organizational accounting, but these are just a few suggestions to get you started.
I'm busy working on my blog posts. Watch this space!