Nonprofit fund accounting is a specialized accounting system. Unlike for-profit businesses, nonprofits often receive funds from multiple sources, such as grants, donations, and program revenues. These funds need to be accounted for separately to ensure transparency, accountability, and compliance with legal and regulatory requirements. Nonprofits typically have multiple funds, each representing a distinct purpose or restriction.
In the context of finance and accounting, a fund refers to a designated pool of money or financial assets that is set aside for a specific purpose. Funds are commonly used by various entities, including governments, businesses, nonprofit organizations, and investment firms, to segregate and manage money for specific objectives or requirements.
To get started, choose General Financials > Funds - from the main menu on the left-hand side.
This opens your organizations list of funds. From here, click the "Add New" button:
This opens the Add A New Fund screen:
From here you will fill in the details of your Fund:
- Fund Type - Select a type from the drop-down list. There are four types: Unrestricted, Temporarily Restricted, Permanently Restricted, or Designated. This is a required field.
- Fund Category - Select a category from the drop-down list. There are five types: Agency Funds, Current Funds, Custodial Funds, Non-Current Funds, and Scholarships. This is a required field.
- Fund Name - Enter a name for your new fund. This is a required field.
- Description - Enter a description for your fund here.
- Starting Balance - Enter a starting balance for the fund here.
Once all the fund details have been filled out, click "Add This Fund." This will add your new fund and return you to your organizations full list of funds.