Best Nonprofit Accounting Software for Efficient Fundraising and Budgeting

Imagine turning financial management from a time-consuming challenge into one of your organization's greatest strengths. With nonprofit accounting software, you can. From tracking restricted funds to generating board-ready reports, the right donation tools make a world of difference for organizations of all sizes. It’s time to streamline your bookkeeping so you can focus on what really matters: your cause and the communities you serve.

What Is Nonprofit Accounting Software?

Nonprofit accounting software is a specialized financial management tool. Also called not-for-profit accounting software or NPO accounting software, it’s designed to handle the unique needs of charities, foundations, and other tax-exempt organizations. 

Accounting software for nonprofits has special features that 501(c)(3) organizations need, like fund accounting, grant tracking, and donor and membership management. They not only handle basic bookkeeping but also simplify compliance, with specific reporting tools that regular business software might not have.

For-Profit vs. Nonprofit Accounting Software

So, what's the difference between for-profit and not-for-profit accounting software? Both types share core functions like accounts payable, accounts receivable, and general bookkeeping. However, for-profit accounting systems focus primarily on tracking revenue, expenses, and profit margins to measure business success and support shareholders' interests. 

Accounting programs for nonprofits, on the other hand, focus less on profits and more on tracking, reporting, and compliance. In other words, it treats incoming funds as resources to be managed according to donor intent rather than revenue to generate profit. Accounting software for nonprofit organizations might also have built-in tools for creating donation receipts, tracking pledges, and monitoring fundraising campaign performance.

Free vs. Paid Accounting Software for Nonprofits

Free accounting software for nonprofits appeals to many organizations. After all, nonprofits are usually working with limited resources. Free software can be great for small nonprofits, but it does have limitations. Free versions might restrict the number of transactions, limit user access, or cap the number of integrations you can set up with other platforms. 

Paid nonprofit accounting software provides advanced features like automated reconciliation, customizable reporting, and integrations with fundraising platforms and other apps. An investment in quality accounting software pays off through time savings, reduced errors, and better financial insights. Small nonprofits might start with free options, but most organizations eventually outgrow these basic tools.

Why Nonprofits Need Specialized Accounting Software

Nonprofit organizations face unique financial challenges that standard accounting systems don't fully address. You need to track funds from multiple sources, often with strings attached about how and when that money can be spent. Here are the key benefits of using a specialized accounting program for nonprofit organizations:

• Proper separation between unrestricted operating funds and restricted grants or donations
• Automated gift processing and tax-compliant donation receipts
• Simplified compliance with Form 990 preparation requirements
• Proper functional expense allocation tracking
• Program-based budgeting and reporting capabilities
• Improved board decision-making through better financial reports
• Enhanced donor confidence through transparent resource management

What Features Should Nonprofit Accounting Software Have?

When shopping for nonprofit accounting software, certain features stand out. The best accounting software for nonprofits integrates smoothly with your other tools and provides the following tools.

Integration with Fundraising Platforms

Any nonprofit software should connect seamlessly with your fundraising platform, but it’s especially important for your accounting tools. Good integration eliminates double data entry, reduces errors, and gives you a complete picture of your financial position. When your fundraising and accounting systems talk to each other, donations flow automatically into your records with proper coding for funds, programs, and restrictions.

Fund Accounting Capabilities

Fund accounting forms the backbone of bookkeeping software for nonprofits, allowing you to track money based on donor restrictions and intended purposes so you can prevent restricted money from being accidentally spent on unauthorized purposes. Your software should let you create separate funds for different purposes, offer a consolidated view of your overall financial position, and help you produce reports showing proper stewardship of each fund.

Donor Management Tools

Many nonprofits use CRM (customer relationship management) platforms, but tracking donor information directly within your accounting software streamlines gift processing even more. Look for software that records not just basic contact details but also giving history, communication preferences, and relationship notes. The best accounting software for nonprofits can segment donors based on giving patterns, flag lapsed supporters for follow-up, and track pledges until they're fulfilled.

Donor Reporting and Compliance Tools

The ability to create customized reports tailored to your specific needs makes a huge difference in nonprofit financial management. Nonprofit accounting software should offer flexible reporting options that let you analyze data by fund, program, time period, or donor segment. Reports should also be easy to adapt for different audiences, for example, detailed breakdowns for board meetings, simplified summaries for staff updates, and formatted statements for grant requirements.

Usability for Non-Financial Staff

Nonprofits often work with small teams. Accounting and bookkeeping software for nonprofit organizations needs to be accessible to team members without financial backgrounds who may need to enter expenses or check budgets. User-friendly interfaces with clear navigation and different permission levels make it easier for program staff to interact only with what they need. 

The Best Nonprofit Accounting Software in 2025

Choosing the right accounting software can dramatically improve your financial management. Let's explore some of the best accounting software for nonprofits to help you find the best fit for your needs.

QuickBooks

QuickBooks for Nonprofits adapts the popular small business platform into a not-for-profit bookkeeping software with specialized features for charitable organizations. You can track donations and grants separately from other income, create custom reports, and manage program-based budgets for better resource allocation. 

QuickBooks also integrates directly with Donately, so donation data flows automatically into your financial records. Plus, the QuickBooks interface is well-known and user-friendly, which makes training staff easier. 

Blackbaud

Blackbaud offers purpose-built financial management and accounting software for nonprofit organizations. It lets you track and report transactions by net asset class to maintain compliance, while maintaining a clean account structure that captures program, grant, and department information.

The platform includes powerful governance tools—from user-specific access rights to approval controls—that keep your financial data secure and help you demonstrate proper stewardship of contributed funds. Blackbaud also integrates with Donately, creating a seamless flow of information across your organization.

Aplos

Aplos provides cloud-based accounting software built specifically for nonprofits, churches, and other tax-exempt organizations. The platform combines fund accounting with donor management in one integrated system, eliminating the need to maintain separate databases or manually transfer information between programs. 

Aplos offers easy-to-use budgeting tools that help you plan by fund or program, then track actual performance against those budgets throughout the year. The software also includes built-in compliance and reporting templates, making it a great accounting software for small nonprofits without dedicated finance departments.

Wave

Wave is a small business accounting software that works well for nonprofits with basic financial needs. The platform handles income and expense tracking, financial reporting, and invoice creation without monthly fees, making it a top budget-friendly accounting software for small nonprofits. 

Wave's simple interface requires minimal training, so volunteers can manage basic bookkeeping without specialized knowledge. However, Wave isn’t specifically designed for nonprofits, and it lacks features like fund accounting and built-in third-party integrations. Still, when it comes to free accounting software for nonprofits, it’s a winner.

Streamline Nonprofit Accounting with Donately

Finding the right accounting tools makes a big difference in how your nonprofit manages its finances and donor relationships. Good nonprofit accounting software frees your team from manual data entry and complex spreadsheets, giving you more time to focus on your mission.

Donately helps you master nonprofit data and accounting through built-in analytics and powerful integrations. You can view donor data like most active donors, popular donation amounts, and campaign effectiveness at a glance, making it easier to optimize your fundraising efforts. 

Our platform also integrates with top nonprofit accounting software like QuickBooks and Blackbaud, and our customizable API gives you the ability to connect with virtually any application. Ready to streamline your nonprofit's financial management? Sign up for a free Donately account today.