6 best accounting software for nonprofit in 2025

Accounting software is a digital tool that helps businesses and organizations manage their financial operations, like tracking income, expenses, and generating reports. For nonprofits, however, accounting software helps ensure compliance with tax regulations and provide transparency to donors and stakeholders.

While businesses focus on profitability, nonprofits must manage donations, grants, and funding restrictions, all while meeting regulatory requirements. The right accounting software for nonprofits is designed to handle these challenges by offering specialized features for fund accounting, donor management, and compliance reporting.

Why do nonprofits need specialized accounting software?

Nonprofits manage money differently from small businesses. Instead of earning profits, you rely on donations, grants, and fundraising. These funds come with rules, and you must track them properly. Standard accounting software is built for businesses, not nonprofits. It doesn’t help you separate restricted and unrestricted funds, follow tax-exempt regulations, or create reports for donors.

Fund accounting works differently from business accounting

Businesses track income and expenses to increase profits. You, however, use fund accounting to separate money based on its purpose. Some funds are restricted, meaning you can only spend them on specific programs. Others are unrestricted and can cover general expenses. If you mix these up, you could violate donor agreements and lose funding.

Traditional accounting software does not help you track different funds separately. Specialized nonprofit accounting software ensures you categorize funds correctly and follow spending rules.

You need to meet compliance and reporting requirements

For-profit businesses report income to calculate taxes. You need to file reports to maintain tax-exempt status. The IRS requires nonprofits to submit Form 990, which shows where their money comes from and how they spend it.

Grant providers and donors also expect detailed financial reports. If you do not track funds properly, you could face penalties, funding cuts, or even lose your nonprofit status. Using nonprofit accounting software helps you generate reports automatically, reducing errors and saving time.

Your income sources need accurate tracking

Businesses make money through sales. You rely on donations, grants, membership fees, and fundraising. These revenue sources are unpredictable and come with restrictions. Some donations can only be used for specific projects.

Grants have strict spending guidelines, and if you don’t follow them, you could lose access to future funding. Membership fees and program revenue must be tracked separately from donations to avoid compliance issues. It’s easy to mix these up without the right software, leading to reporting mistakes and financial problems.

Donors expect transparency

For-profit companies answer to shareholders. You answer to donors, grant providers, and board members. They need to know where their money goes. They may stop supporting your nonprofit if they do not trust your financial reports.

Manually tracking contributions and creating donor reports is time-consuming and prone to errors. Nonprofit accounting software automates these reports and keeps your financial records audit-ready.

Budgeting and expense tracking are more complex

Businesses create budgets based on expected profits. You plan around available funds, which can change based on donations and grants. You must allocate money carefully, making sure most of it goes toward programs instead of administrative costs. If you receive grant funding, you need to track those expenses separately.

Many grantors require detailed spending reports, and errors can cost you future funding. Without the right software, managing program budgets and tracking expenses can become overwhelming. Nonprofit accounting helps you stay on top of your budget while preventing overspending or compliance issues.

Best nonprofit accounting software

Smaller nonprofits with simple finances may rely on spreadsheets or basic bookkeeping software. However, as your nonprofit grows, financial management becomes more complex. You need to track donations, manage grants, and create reports for donors and regulators.

Choosing the right tool depends on your organization’s size, funding structure, and reporting needs.

1. QuickBooks: Best for small to mid-sized nonprofits

QuickBooks is an easy-to-use platform designed to manage the complex financial tasks that come with running a nonprofit. Nonprofits have unique needs, such as tracking restricted vs. unrestricted funds, managing grants, and ensuring compliance with IRS requirements. QuickBooks supports these functions by offering both automation and customization to fit the specific needs of your nonprofit.

This accounting solution simplifies key tasks like expense categorization, donor tracking, and reporting. It also integrates easily with online payment processors, helping nonprofits streamline their donation collection and cash flow.

Key benefits

• Automated expense tracking helps ensure funds are correctly categorized and managed.
• Customizable financial reports are ideal for creating transparent reports for donors and board members.
• Online payment processing streamlines donations and improves cash flow.
• Multi-currency support allows easy management of international donations and transactions.
• The collaborative tools enable multiple team members to access the software, making it easy to work together on finances.

Drawbacks

• Steep learning curve for those new to the software.
• Takes up considerable storage space on devices.
• Bank feed integration issues can cause occasional syncing problems.

QuickBooks is a solid option for nonprofits looking to simplify their financial management. While it has a few challenges, its extensive accounting features make it an excellent tool for nonprofits that need accurate financial oversight, compliance, and donor transparency.

2. AccuFund Accounting Suite: Best for comprehensive nonprofit management

AccuFund Accounting Suite is built specifically for nonprofit organizations and government agencies that need robust financial management. It handles fund accounting, grant tracking, and compliance reporting in one system. Mid-sized and larger nonprofits with multiple funding sources will find this platform particularly useful.

The software's modular design lets you add only the features you need, from core accounting to payroll and human resources. This flexibility makes AccuFund adaptable to your organization's growth.

Key benefits

• Fund accounting system ensures proper tracking of restricted and unrestricted funds.
• Grant management tools help monitor grant requirements, deadlines, and reporting.
• Financial reporting capabilities offer customizable reports that meet nonprofit regulatory requirements.
• Budget preparation and management features allow for multi-year forecasting and scenario planning.
• Workflow automation reduces manual data entry and improves operational efficiency.

Drawbacks

• Higher implementation costs compared to entry-level accounting software.
• Requires technical expertise to maximize all available features.
• The interface may feel dated compared to more modern cloud-based solutions.

AccuFund Accounting Suite is an excellent choice for established nonprofits seeking a comprehensive financial management system with robust reporting capabilities. Its specialized nonprofit features make it particularly valuable for organizations managing multiple funding sources and complex compliance requirements.

3. Aplos: Best for fund accounting

Aplos is a cloud-based fund accounting software that is designed to help you manage the unique financial needs of your organization. This includes tracking restricted donations and grants and generating financial reports. Aplos focuses on fund accounting and donor management, helping you stay transparent and organized.

With Aplos, you can easily categorize donations, manage campaigns, and create real-time reports. It’s simple to use, so you can focus more on your nonprofit's mission.

Key benefits

• Donation categorization helps you track donations by donor and purpose.
• Custom reports give you tailored financial insights for specific projects or campaigns.
• Fund accounting ensures restricted gifts are managed correctly.
• Custom bank account charts allow you to organize finances with flexible tags.
• Easy setup and integration save you time during implementation.

Drawbacks

• Customer support lacks screen sharing options for better collaboration.
• Cost may be too high for smaller nonprofits.
• Limited tagging for detailed reporting.

While Aplos may be costly for some, its user-friendly setup and targeted features make it a solid choice for organizations with complex financial needs.

4. Blackbaud Financial Edge NXT: Best for large nonprofits and institutions

Blackbaud Financial Edge NXT delivers cloud-based fund accounting for larger nonprofits, educational institutions, and foundations. It tackles complex budgeting and reporting challenges while integrating seamlessly with other Blackbaud fundraising tools. Organizations with sophisticated financial needs and multiple stakeholders will benefit most from this platform.

The system excels at detailed financial tracking and AI-driven reconciliation, making it easier to demonstrate accountability to donors, board members, and regulators.

Key benefits

• Comprehensive fund accounting ensures proper management of restricted and unrestricted funds.
• Advanced reporting tools generate custom financial statements and dashboards for stakeholders.
• Integration with Blackbaud's fundraising solutions creates a unified platform for financial and donor management.
• Role-based security controls protect sensitive financial data while allowing appropriate access.
• Cloud-based architecture enables remote access and reduces IT infrastructure needs.

Drawbacks

• Higher price point may be prohibitive for smaller nonprofits.
• Complex implementation process often requires dedicated resources and training.
• Some users report a steep learning curve for advanced features.

Blackbaud Financial Edge NXT is ideal for established nonprofits with complex financial needs and the resources to fully implement and utilize its extensive feature set. For organizations already using other Blackbaud products, the seamless integration provides significant efficiency benefits.

5. Daxko Accounting: Best for membership-based organizations

Daxko Accounting combines membership management with financial tools, making it perfect for YMCAs, community centers, and similar organizations. It connects member data with accounting functions to create a complete financial picture. This integration eliminates duplicate data entry and reduces reconciliation headaches.

The system handles recurring billing, program registrations, and facility rentals while providing financial insights specific to membership-based operations.

Key benefits

• Integrated membership and accounting systems provide a comprehensive view of organizational finances.
• Automated billing and collections improve cash flow and reduce administrative time.
• Program costing tools help analyze the profitability of different services and activities.
• Multi-location support manages finances across multiple branches or facilities.
• Customizable dashboards offer real-time financial insights tailored to different stakeholders.

Drawbacks

• Specialized focus may not be ideal for nonprofits without membership programs.
• Some users report limited customization options for financial reports.
• Implementation requires significant time investment to configure properly.

Daxko Accounting is the right choice for membership-based nonprofits seeking to integrate their membership management and financial systems. Its specialized features address the unique needs of community centers and similar organizations that manage multiple revenue streams and program offerings.

6. Fund E-Z: Best for user-friendly fund accounting

Fund E-Z tackles nonprofit accounting with a straightforward Windows-based approach that doesn't require an accounting degree to use. Small and mid-sized organizations appreciate its balance of simplicity and capability. The all-in-one design includes accounts payable, receivable, payroll, and reporting without overwhelming users.

Despite its ease of use, Fund E-Z doesn't compromise on nonprofit-specific features like fund tracking and grant management.

Key benefits

• Intuitive interface reduces training time and makes fund accounting accessible to non-accountants.
• Comprehensive reporting capabilities generate FASB-compliant financial statements.
• Multi-fund tracking ensures proper management of restricted and unrestricted funds.
• Budget management tools allow for detailed planning and variance analysis.
• Built-in audit trail maintains financial transparency and simplifies the audit process.

Drawbacks

• Windows-only platform lacks the flexibility of cloud-based solutions.
• Limited integration options with other nonprofit management software.
• Dated user interface compared to more modern accounting solutions.

Fund E-Z is an excellent option for small to medium-sized nonprofits that need dedicated fund accounting capabilities without the complexity or cost of enterprise-level solutions. Its focus on usability makes it particularly valuable for organizations with limited accounting expertise on staff.

How to choose the best accounting software for your nonprofit

Without the right accounting software, you risk manual errors, missed deadlines, and mismanagement of funds, which can harm your organization’s reputation and financial health. To avoid these risks, it is important to carefully evaluate your nonprofit’s needs and select software that is tailored to your specific financial management requirements.

• Size and complexity of your nonprofit

Small organizations with straightforward financial needs may not need complex software. However, larger nonprofits with multiple departments, donors, or funding sources will benefit from software with advanced features like fund tracking, grant management, and multi-department budgeting.

• Ease of use

Nonprofit teams often have limited resources and technical expertise. Choose intuitive and easy-to-navigate software so your team can get up to speed quickly. An accounting system that is easy to use will save you time and reduce errors, helping you stay focused on your mission.

• Real-time reporting and budget forecasting

Tracking donations, managing expenses, and adjusting your budget in real-time are key to staying on top of your nonprofit’s finances. Look for software that helps you create detailed reports and provides budget forecasting tools to project future financial needs, helping you make informed decisions.

• Donor tracking and compliance features

Nonprofits need to stay compliant with IRS regulations and provide transparency to donors. Look for software that tracks restricted and unrestricted funds, generates FASB-compliant financial reports, and helps manage donor records. Automation of these tasks will save you time and ensure you're always up to date with regulations.

• Cost-effectiveness

Many nonprofits operate on tight budgets, so it's important to choose software that aligns with your financial situation. Consider pricing plans, whether the software offers a free version and any hidden fees for add-ons or upgrades. Be sure to weigh the total cost of ownership, including any support or training fees, to make sure it fits within your budget.

Not all accounting software will have every feature you need, such as real-time reporting or automated expense tracking. In such cases, you can leverage Ramp’s Integration feature to seamlessly connect it with your existing accounting software. This way, you can avoid the hassle of switching to a completely new system while also reducing manual errors and saving time.

Make smarter financial decisions with the right nonprofit accounting software

With the right accounting software, your nonprofit can make data-driven decisions that optimize spending, improve fundraising efforts, and maximize impact. By streamlining processes like expense tracking and reporting, you can identify areas for improvement, ensuring that resources are allocated efficiently and in line with your mission.

Moreover, accounting software keeps your organization audit-ready. It simplifies compliance, reduces the risk of financial mismanagement, and ensures you meet IRS and donor reporting standards. These features not only protect your nonprofit but also build trust with stakeholders.

By automating manual tasks and providing clear financial insights, you can focus more on fulfilling your nonprofit's mission and achieving long-term sustainability.

If your accounting software is lacking some critical features like automated expense tracking or reporting, consider accounting automation platforms like Ramp, which integrates seamlessly with standalone accounting systems to provide these functions. This way, you can ensure that your nonprofit has the tools it needs to make smarter financial decisions and maintain efficiency.