QUICK ANSWER
The best accounting software for nonprofits in 2026 are QuickBooks Online (with nonprofit chart of accounts setup), Aplos, Wave (free tier for small nonprofits), and Xero. Nonprofits have unique accounting requirements: fund accounting to track money by restriction and purpose, Form 990 preparation, grant management, donor management integration, and board-level financial reporting. QuickBooks Online with the nonprofit chart of accounts remains the most widely used platform for small-to-midsize nonprofits due to its flexibility and broad CPA support ecosystem.
Key Takeaways
- Fund accounting is what separates nonprofit from for-profit accounting — nonprofits must track money by fund (unrestricted, temporarily restricted, permanently restricted) to demonstrate donor funds were spent according to donor intent; QuickBooks Online handles this through class tracking while purpose-built nonprofit software handles it natively.
- Form 990 preparation support varies significantly across platforms — some platforms generate 990-ready reports while others require your accountant to restructure data; this distinction matters most for organizations with complex revenue streams or multiple restricted funds.
- QuickBooks Online offers a nonprofit discount through TechSoup — eligible 501(c)(3) nonprofits can access QuickBooks Online at significantly reduced pricing through TechSoup’s nonprofit technology program, making it the most cost-effective choice for many small nonprofits.
- Grant management requires tracking individual grants from award through closeout — nonprofits with multiple active grants must track each grant’s budget, expenditures, reporting deadlines, and allowable expenses separately; QBO’s project tracking handles this for most organizations.
Best Accounting Software for Nonprofits
1. QuickBooks Online — Best Overall for Small-to-Midsize Nonprofits
QuickBooks Online is the most widely used accounting platform among nonprofits because of its flexibility, broad CPA support ecosystem, and nonprofit-specific features available through its nonprofit chart of accounts setup. The class tracking feature (available in Plus and Advanced plans) allows organizations to track income and expenses by program, fund, or grant — the core functionality nonprofits need for fund accounting. QuickBooks Online integrates with popular donor management platforms including Bloomerang, DonorPerfect, and Salesforce NPSP to sync donation data automatically and reduce manual data entry.
For nonprofits under $1M in annual revenue, QuickBooks Online Plus ($90/month, or significantly less through TechSoup) provides all necessary fund tracking, grant management, and financial reporting capabilities. The platform’s Form 990 support is indirect — your accountant will need to structure QBO reports to match 990 line items — but its Statement of Financial Position and Statement of Activities reports align closely with nonprofit GAAP requirements.
Best for: 501(c)(3) nonprofits of any size that want the broadest accountant support ecosystem, TechSoup discount access, and strong integrations with donor management software.
2. Aplos — Best Purpose-Built Nonprofit Accounting Software
Aplos is designed specifically for nonprofits and faith-based organizations, with fund accounting built into its core rather than adapted from for-profit accounting software. The platform handles true fund accounting natively, generates Form 990-ready reports, manages donations and pledges, and tracks grants with budget vs. actual reporting. Aplos is particularly strong for churches and religious organizations that need contribution statement generation for donors and integrated online giving capabilities.
Starting at $79/month (Aplos Core) with higher tiers for advanced fund accounting and payroll integration, Aplos costs more than QuickBooks Online for equivalent functionality but offers a nonprofit-first experience that reduces the need for accountant workarounds for fund accounting and Form 990 reporting.
Best for: Nonprofits and churches that want purpose-built fund accounting without adapting for-profit software, particularly organizations that generate donor contribution statements and manage online giving.
3. Wave — Best Free Option for Very Small Nonprofits
Wave’s free accounting software works adequately for very small nonprofits (under $250K annual revenue) with simple fund structures and minimal grant activity. While Wave lacks native fund accounting features, small nonprofits with one or two funds can manage fund tracking using account codes and regular account reconciliation. Wave’s invoicing and receipt scanning features are free, making it a zero-cost option for all-volunteer organizations that can’t justify paid software costs.
Best for: Very small nonprofits and all-volunteer organizations with simple finances, one or two funds, and no grant reporting requirements who need zero-cost accounting software.
Nonprofit Accounting Software Comparison
| Platform | Starting Price | Fund Accounting | Form 990 Support | Best For |
|---|---|---|---|---|
| QuickBooks Online | $30/month (TechSoup discount available) | Via class tracking | Indirect | Most nonprofits |
| Aplos | $79/month | Native | 990-ready reports | Churches & small nonprofits |
| Wave | Free | Manual workaround | None | All-volunteer orgs |
Recommended Resources
Accounting All-in-One For Dummies — covers nonprofit accounting fundamentals including fund accounting concepts, how to read a Statement of Financial Position and Statement of Activities, and how to structure your nonprofit chart of accounts for GAAP compliance.
Bookkeeping Workbook For Dummies — provides practical exercises for setting up nonprofit bookkeeping systems: recording restricted and unrestricted contributions, tracking in-kind donations, and reconciling program expenses to grant budgets.
Frequently Asked Questions
Does a nonprofit need special accounting software?
Nonprofits don’t legally require purpose-built accounting software, but they do require fund accounting — tracking money by restriction to demonstrate stewardship of donor funds. Standard small business software like QuickBooks Online can handle fund accounting through class tracking and a nonprofit chart of accounts; purpose-built nonprofit software like Aplos handles it natively. The right choice depends on your organization’s size, complexity, and your accountant’s familiarity with the platform.