Accounting Software for Nonprofits: 10 Options Compared, Plus Building on What You Already Have
Fund accounting, restricted grants and board reporting put different demands on a system than ordinary bookkeeping. This guide compares 10 of the leading accounting platforms for nonprofits, free and paid, then looks at the alternative: building the fund accounting and reporting your charity needs on top of Microsoft 365 tools you may already be licensed for.
Quick answer: what's the best accounting software for nonprofits?
There isn't one best answer, because "nonprofit accounting software" covers a very small church with one bank account and a national charity running federal grants. The right choice depends on whether you need true fund accounting, how many restricted grants you manage, and what you're already paying for.
- Very small or volunteer-run: free tools such as Wave cover basic bookkeeping, with manual workarounds for fund tracking.
- Small to mid-sized nonprofits: purpose-built fund accounting platforms such as Aplos or Software4Nonprofits track restricted and unrestricted funds natively.
- Growing or mid-sized organisations: general business platforms with nonprofit configuration, such as QuickBooks Online or Microsoft Dynamics 365 Business Central, add more financial depth as the charity scales.
- Large or grant-heavy charities: enterprise systems such as Sage Intacct, Blackbaud Financial Edge NXT or MIP Fund Accounting handle multi-dimensional reporting and complex grant compliance.
1. What Makes Nonprofit Accounting Different
Ordinary accounting software tracks income, expenses and profit for one business. A nonprofit has to do more: it must separate money with donor restrictions from money without, report spending across programme, management and fundraising categories, and prove that restricted grants were spent on what the donor intended.
This is called fund accounting. Instead of one pot of money, the organisation tracks several "funds," each with its own balance and rules about what it can be spent on. A generic small business accounting package can be bent into this shape using tags, classes or locations, but software built for nonprofits handles it natively, which matters once an auditor or a grant funder starts asking questions.
Do you actually need true fund accounting?
If your charity holds one general fund and the occasional small restricted donation, a mainstream platform with tagging will likely cope. If you manage multiple grants with different reporting periods and spending rules, software built around fund accounting will save far more time than it costs.
2. Top 10 Accounting Software Options for Nonprofits
This list spans free tools for very small organisations through to enterprise platforms for large, grant-heavy charities. We don't resell or implement any of these products ourselves; our role, covered in section six, is building the Microsoft 365 and Business Central side of a charity's finance systems.
Aplos
Fund accountingBuilt specifically for small to mid-sized nonprofits and churches, with true fund accounting, donor management and Form 990 support as native features rather than workarounds.
Indicative price: from around $79/monthQuickBooks Online
General purposeThe most widely used small business accounting platform, with nonprofit-specific features through its ProAdvisor and nonprofit plans. Fund tracking relies on classes and locations rather than native fund accounting.
Indicative price: from around $38/monthSage Intacct
EnterpriseA cloud financial management platform widely regarded as the AICPA-preferred system for nonprofits, strong in multi-dimensional fund reporting, grant compliance and functional expense allocation for larger organisations.
Indicative price: custom quoteMIP Fund Accounting
Fund accountingA longstanding, highly configurable fund accounting system aimed at grant-heavy nonprofits, government grantees and larger organisations that need unlimited funds and detailed reporting.
Indicative price: custom quoteBlackbaud Financial Edge NXT
EnterpriseBuilt for large nonprofits, with subfund accounting and close integration with Blackbaud's Raiser's Edge NXT fundraising platform, where organisations already use the wider Blackbaud ecosystem.
Indicative price: custom quoteMicrosoft Dynamics 365 Business Central
ERPA cloud ERP that goes beyond accounting into procurement, inventory and project costing, suited to growing or mid-sized nonprofits that have outgrown entry-level tools and want financial reporting inside the Microsoft 365 apps their staff already use daily.
Licensing varies by module and user countNetSuite for Nonprofits
EnterpriseOracle's cloud ERP with native fund accounting, grant management and Form 990 support, aimed at larger, multi-entity or multi-currency nonprofits running operations across several countries or programmes.
Indicative price: custom quoteWave Accounting
FreeGenuinely free double-entry bookkeeping, invoicing and bank reconciliation, best suited to micro and volunteer-run nonprofits with simple books and no real fund accounting requirement.
Free core features; paid add-ons for payments and payrollXero
General purposeA straightforward small business accounting platform with strong bank feed automation and a large network of UK accountants and bookkeepers, used by some smaller charities alongside tracking categories for simple fund reporting.
Indicative price: from around £16/monthSoftware4Nonprofits (Accounts)
Low-costAn affordable, nonprofit-specific tool built around fund accounting basics for very small nonprofits and churches that want restricted fund tracking without complex tagging or enterprise pricing.
Indicative price: from around $42/month3. Free Accounting Software for Small Nonprofits
"Free accounting software for nonprofits" usually means one of a small number of genuinely free platforms, rather than a free tier of a paid fund accounting system. Wave is the most complete free option, offering real double-entry bookkeeping, invoicing and bank reconciliation at no cost, with payments and payroll as paid add-ons. GnuCash, an open-source desktop package, supports native fund accounting through its account hierarchy but has a steeper learning curve and no cloud access by default.
The trade-off is consistent across free tools: fund accounting is either absent or handled manually, and Form 990 or charity-specific reporting usually requires export and further work outside the software. For a charity with one general fund and a small number of transactions, that trade-off is often fine. Once restricted grants or multiple programmes enter the picture, the time spent working around a free tool's limits tends to exceed the cost of a purpose-built or paid platform.
↑ Back to Contents4. Quick Comparison Table
| Software | Best For | Native Fund Accounting |
|---|---|---|
| Aplos | Small to mid-sized nonprofits & churches | Yes |
| QuickBooks Online | Small nonprofits wanting familiar software | Via classes/locations |
| Sage Intacct | Large, complex nonprofits | Yes |
| MIP Fund Accounting | Grant-heavy nonprofits & government | Yes |
| Blackbaud Financial Edge NXT | Large nonprofits using Raiser's Edge | Yes |
| Business Central | Growing nonprofits wanting ERP depth | Via dimensions/configuration |
| NetSuite for Nonprofits | Multi-entity, multi-currency charities | Yes |
| Wave | Micro or volunteer-run nonprofits | No |
| Xero | Small charities wanting simple bookkeeping | Via tracking categories |
| Software4Nonprofits | Very small nonprofits & churches | Yes |
Positioning and feature summaries are based on vendor and third-party sources checked October 2026. Confirm current features and pricing with each vendor before deciding.
↑ Back to Contents5. Choosing the Right Fit for Your Charity
✔ A dedicated fund accounting tool fits if
- You manage several restricted grants with different reporting periods and spending rules.
- Your board or auditor expects a Statement of Activities split by net assets with and without donor restrictions.
- Your finance team is small and benefits from software that enforces fund accounting rules rather than relying on manual tagging discipline.
✘ A general platform may be enough if
- You hold one general fund with occasional, simple restricted donations.
- You already use Microsoft 365 for everything else and want finance to sit alongside it rather than in a separate system.
- Your organisation is growing and needs operational features (inventory, projects, purchasing) beyond pure bookkeeping.
6. The Alternative: Build On What Your Charity Already Has
Every platform above is a separate product, with its own licence, its own login and its own learning curve for your finance team and trustees. For charities already running Microsoft 365, there is a different route: using Microsoft Dynamics 365 Business Central and Power Automate to build the fund accounting, approvals and reporting a charity needs, inside the ecosystem staff already work in every day.
We don't sell or resell the nonprofit-specific platforms listed above. What we do is build on Business Central and the wider Microsoft 365 and Power Platform stack, configuring and extending tools your charity may already be licensed for, so finance doesn't become a system nobody outside the finance team ever opens.
Fund and dimension-based reporting in Business Central
Business Central's dimensions can be configured to track restricted and unrestricted funds, programmes and grants, giving a Statement of Activities view without a separate fund accounting product.
Grant and expense approvals in Power Automate
Automated approval workflows for grant spending, purchase requests and expense claims, routed to the right budget holder and logged automatically against the correct fund.
Board and trustee reporting in Power BI
Dashboards built from Business Central data that show fund balances, programme spending and grant progress, so trustees see the figures without needing their own finance software login.
Integrating finance with the apps staff already use
Business Central works directly with Outlook, Excel and Teams, so quotes, invoices and fund balances can be checked from the tools your team is already signed into, rather than a separate portal.
When this approach makes sense
This route suits charities that already use, or are considering, Microsoft 365, and that want finance built into their wider systems rather than bolted on as a separate subscription. It is not a replacement for specialist fund accounting software at very large or extremely grant-heavy organisations, where a platform such as Sage Intacct or MIP Fund Accounting is likely to remain the better fit.
7. How NetMonkeys Supports Charity Finance Teams
As part of our wider IT support for charities, we help not-for-profit organisations get more out of the Microsoft 365 and Business Central licences they already pay for, rather than adding another standalone system. That includes configuring Business Central for fund-based reporting, building approval and reconciliation workflows with Power Automate, and turning the resulting data into trustee-ready dashboards with Power BI.
We also look after the everyday side of a charity's technology: user support, device security and the Microsoft 365 licensing itself, through our Microsoft 365 support and managed IT support services, with the identity and device protection charities increasingly need covered by our managed cyber security team.
↑ Back to Contents8. Frequently Asked Questions
What is the best accounting software for nonprofits?
There isn't a single best option. Aplos and Software4Nonprofits suit small nonprofits and churches that need true fund accounting at a modest cost. QuickBooks Online suits organisations that want familiar, widely supported software. Sage Intacct, Blackbaud Financial Edge NXT and MIP Fund Accounting suit large or grant-heavy charities. Microsoft Dynamics 365 Business Central suits growing nonprofits that want financial reporting built into the Microsoft 365 tools they already use.
What is fund accounting software for nonprofits?
Fund accounting software tracks money by fund and by donor restriction, rather than as a single pool of income and expenses. It separates net assets with donor restrictions from those without, and allocates spending across programme, management and fundraising categories, which is a core requirement for nonprofit financial reporting.
Is there free accounting software for nonprofits?
Yes. Wave offers genuinely free double-entry bookkeeping, invoicing and bank reconciliation, and GnuCash is a free, open-source option with native fund accounting through its account structure. Neither replaces a purpose-built fund accounting platform once an organisation manages multiple restricted grants.
What is cloud accounting software for nonprofits?
Cloud accounting software runs online rather than on a single desktop computer, so trustees, staff and accountants can access up-to-date figures from any device. Most of the platforms in this guide, including Aplos, QuickBooks Online, Sage Intacct and Microsoft Dynamics 365 Business Central, are cloud-based.
Can QuickBooks be used for nonprofit accounting?
Yes, and it is one of the most widely used platforms among smaller nonprofits. It handles fund tracking through classes and locations rather than native fund accounting, so organisations with many restricted grants or federal funding often move to a purpose-built fund accounting platform as they grow.
Can Microsoft Dynamics 365 Business Central work for nonprofit accounting?
Yes. Business Central can be configured with dimensions for funds, programmes and grants, giving nonprofit-style reporting without a separate fund accounting product. It suits organisations that have outgrown entry-level accounting tools and want finance built into the same Microsoft 365 ecosystem as their email, documents and Teams.
Does my charity need separate accounting software if we already use Microsoft 365?
Not necessarily. Many charities can build fund-based reporting, approval workflows and trustee dashboards using Business Central, Power Automate and Power BI within their existing Microsoft 365 licensing, rather than paying for and learning a separate accounting platform. Very large or extremely grant-heavy organisations are more likely to need a dedicated fund accounting system regardless.
What should a small nonprofit look for in accounting software?
Start with whether you genuinely need fund accounting, based on how many restricted grants you manage. Then weigh cost, ease of use for non-accountants and whether the software needs to connect to tools you already use, such as Microsoft 365, before comparing specific platforms.
Already on Microsoft 365? Let's See What It Can Do for Your Finances
As a Microsoft Solutions Partner and managed IT services provider working with UK charities, we can look at what you already have licensed and tell you plainly whether Business Central and Power Automate can cover your fund accounting needs, or where a specialist platform still makes sense.
Talk to Our Charity IT Team 0161 834 9345
