Many non-profit organizations, including churches, wonder if their organization needs some form of special software. The answer depends on your level of expertise both in accounting and in technology. One thing is for sure, non-profit accounting is very different than for-profit accounting.

The Difference

I usually explain the difference between church accounting and corporate accounting using a quick example. When you donate or tithe money to a church, you have some control over where the money might go. The money is considered “restricted money” by the non-profit if you tell them where to send the money. There are some situations in where you can tell the non-profit that the money is “unrestricted” and they can spend it however they want.

Compare this experience to a visit to McDonalds. Imagine telling the cashier that you want your $3.99 for the Big Mac to go towards saving children in Africa. The cashier would be confused to say the least.

Due to these restricted moneys, non-profit organizations usually need fund accounting software.

If your a church accountant and you understand fund accounting very well you may have the expertise to bend a QuickBooks like software so that it works for your fund accounting. However, if you don’t understand fund accounting very well, then some specialized church accounting software will be very helpful.

Even if you do understand fund accounting extremely well, you may still run into some problems trying to mold generic, QuickBooks like software into something that will work for your non-profit organization.

If you have both accounting expertise and technology expertise go ahead and save a few bucks by buying some generic accounting software. If you are lacking in either, I would personally recommend specialized fund accounting software.