Small nonprofits — we’re talking under 25 staff, often under $1M in annual budget — face a specific accounting challenge. You need fund accounting, donor tracking, and board-ready reports, but you don’t have a finance department. The person doing the books might be an executive director, a part-time bookkeeper, or a volunteer. You need software that handles nonprofit complexity without requiring an accounting degree to operate.

We compared the five best options for small nonprofits on the features that matter most: true fund accounting, donor and grant tracking, Form 990 readiness, budget management, and price.

Quick Comparison

1. Aplos — Best Overall for Small Nonprofits

Aplos is purpose-built for nonprofits. That’s not marketing speak — the fund accounting, donor management, contribution statements, and budget tracking are all designed for organizations that manage restricted and unrestricted funds, not businesses tracking cost centers. For a small nonprofit that needs to do things correctly without hiring a CPA, Aplos is the most complete option.

Pros:

• True fund accounting — tracks restricted, unrestricted, and board-designated funds properly
• Built-in donor management with automatic contribution statements
• Budget vs. actual reporting by fund and department
• Designed for non-accountants — executive directors and part-time bookkeepers can use it
• Handles fund balances correctly at year-end (no manual journal entries)
• Reconciliation and reporting ready for board meetings and grant applications
• All-in-one: accounting, donations, and communications in one system

Cons:

• $59/mo is steep for organizations on very tight budgets
• Payroll requires ADP integration (additional cost and complexity)
• Fewer third-party integrations than QuickBooks or Xero
• Advanced reporting less customizable than enterprise tools
• No built-in grant management for complex multi-grant organizations
• Limited project-level accounting for nonprofits running many programs

Pricing: Accounting only $45/mo; Accounting + Donations $59/mo; Payroll add-on varies via ADP

Best for: Small nonprofits (under 25 staff, under $1M budget) that manage restricted funds, need donor tracking, and want to stop cobbling together spreadsheets and workarounds.

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2. QuickBooks Online — Best if Your Bookkeeper Knows It

Here’s the honest truth about QuickBooks for nonprofits: it’s the most widely used accounting software on the planet, which means your bookkeeper, your CPA, and your board treasurer probably already know it. That familiarity has real value. But QuickBooks was built for businesses, and class tracking is a workaround — not true fund accounting. If your nonprofit has simple finances and an experienced bookkeeper, QuickBooks works. If you manage multiple restricted funds, it’ll fight you.

Pros:

• Most bookkeepers and CPAs already know it — minimal training
• Massive integration ecosystem (750+ apps)
• Strong reporting and bank reconciliation
• Class and location tracking can approximate fund accounting
• Built-in budget tracking by class and location
• Easy to find QuickBooks-experienced help and tutorials
• Reliable, well-supported platform with a long track record
• Built-in payroll option

Cons:

• Class tracking is not true fund accounting — fund balances require manual workarounds
• No built-in donor tracking or contribution statements (need a separate CRM or giving platform)
• Net asset reporting can misstate restricted vs. unrestricted balances if configured incorrectly
• Doesn’t generate Form 990
• Higher-tier plans required for class tracking (Plus plan at $90/mo)
• Monthly costs escalate quickly with add-ons and payroll
• Year-end fund balance adjustments are error-prone for non-accountants

Pricing: Simple Start $30/mo (no class tracking); Essentials $60/mo (limited); Plus $90/mo (full class + location tracking)

Best for: Small nonprofits with a QuickBooks-experienced bookkeeper, simple fund structures (one or two funds), and a separate system for donor management.

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3. Xero — Best for Integration-Heavy Nonprofits

Xero is the accountant’s favorite alternative to QuickBooks. It’s proper double-entry accounting with the best bank reconciliation interface on the market and an integration ecosystem (1,000+ apps) that lets you build exactly the nonprofit stack you need. The catch: Xero itself isn’t nonprofit-specific. You’ll need add-ons for donor tracking, fund accounting, and 990 prep. If your nonprofit already uses specific tools for fundraising or CRM and wants accounting software that connects to everything, Xero is the best hub.

Pros:

• True double-entry accounting — proper financials from day one
• Best-in-class bank reconciliation (fast and accurate)
• 1,000+ integrations via app marketplace — connects to everything
• Tracking categories can approximate fund accounting
• Multi-currency support for international nonprofits
• Clean, modern interface that’s easier to learn than QuickBooks
• Project tracking built in
• More affordable than QuickBooks at equivalent tiers

Cons:

• Tracking categories are not true fund accounting
• No built-in donation or grant tracking — requires add-on apps
• No Form 990 generation
• Requires configuration and add-ons to work for nonprofits (more setup time)
• Learning curve for non-accountants — double-entry requires understanding debits/credits
• US payroll requires Gusto or ADP integration (not built in)
• Smaller US accountant network than QuickBooks

Pricing: Starter $20/mo (limited invoices/bills); Standard $40/mo; Premium $55/mo

Best for: Small nonprofits that want solid double-entry accounting and are willing to add donor management and nonprofit reporting through integrations. Best if you have a bookkeeper comfortable with accounting fundamentals.

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4. FreshBooks — Simplest for Volunteer Bookkeepers

FreshBooks is the easiest accounting software to learn, period. If your nonprofit’s books are handled by a volunteer with no accounting background, FreshBooks is the least intimidating option. But that simplicity comes with a cost: no fund accounting, no donor tracking, no nonprofit-specific features at all. It’s suitable only for nonprofits with a single general fund and very straightforward finances.

Pros:

• Easiest accounting interface available — designed for non-accountants
• Excellent invoicing and expense tracking
• Clean, friendly interface with minimal jargon
• Good mobile app for receipt capture on the go
• Strong customer support
• Quick setup — you can be running in under an hour
• Time tracking built in (useful for grant reporting on staff time)

Cons:

• No fund accounting — can’t track restricted vs. unrestricted funds
• No donor tracking or contribution statements
• No grant management
• No Form 990 support
• Not designed for nonprofit tax situations (unrelated business income, etc.)
• Limited reporting for board meetings and grant applications
• Only suitable for nonprofits with simple, single-fund finances

Pricing: Lite $19/mo (up to 5 clients); Plus $33/mo; Premium $55/mo

Best for: Very small nonprofits with one general fund, a volunteer bookkeeper who’s never used accounting software, and straightforward finances. Not recommended once you have restricted funds or need nonprofit-specific reporting.

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5. Wave — Best Free Option for Brand-New Nonprofits

Wave is genuinely free accounting software — no subscription, no transaction limits, no “free trial” that becomes a bill. For a nonprofit that just received its 501(c)(3) determination, has a handful of transactions per month, and has zero budget for software, Wave covers the basics. But it has no nonprofit features whatsoever, so you’ll need to supplement it with spreadsheets for fund tracking and a separate tool for donor management.

Pros:

• Completely free — no subscription, no limits on transactions
• Professional invoicing and bill tracking
• Bank and credit card connections
• Receipt scanning (via mobile app)
• Basic financial reporting
• Good enough for simple cash-basis bookkeeping

Cons:

• No fund accounting at all
• No donor tracking or contribution statements
• No grant management
• No Form 990 support
• Very limited reporting — insufficient for most board presentations
• No nonprofit-specific features of any kind
• Email-only customer support
• You will outgrow it as soon as your organization gains complexity
• Payment processing fees apply if you use Wave Payments

Pricing: Free (Wave Payments processing fees apply if accepting payments)

Best for: Newly formed 501(c)(3) organizations with minimal transactions, no restricted funds, and zero budget. Plan to upgrade within 12-18 months as your finances mature.

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How to Choose: A Decision Guide for Small Nonprofits

1. Do you manage restricted funds?

• Yes (restricted grants, donor-advised funds, endowments) → Aplos. It handles fund accounting natively. QuickBooks and Xero require workarounds that create errors at year-end.
• No (single general fund only) → QuickBooks, Xero, or FreshBooks all work. Choose based on your bookkeeper’s preference and budget.

2. What’s your annual budget?

• Under $100K → Wave (free) or Aplos ($59/mo if you need fund accounting)
• $100K–$500K → Aplos or QuickBooks Online Plus
• $500K–$1M → Aplos or Xero with nonprofit add-ons

3. Who does the bookkeeping?

• Volunteer with no accounting background → FreshBooks or Aplos (most intuitive)
• Part-time bookkeeper → QuickBooks (most likely what they already know)
• CPA or experienced nonprofit bookkeeper → Xero or QuickBooks

4. Do you need donor tracking built in?

• Yes → Aplos (only option on this list with built-in donor management)
• No (using a separate CRM or giving platform) → QuickBooks or Xero

5. Do you need Form 990 preparation?

• Yes → No tool on this list generates a complete Form 990. Use Aplos or QuickBooks for clean financials, then export to your tax preparer. For mid-size nonprofits with complex 990s, consider Sage Intacct.
• No (still in 990-N/990-EZ range) → Any option works — your 990 is simple enough that financial reports from any platform will suffice.

Our Top Pick

Aplos is the best accounting software for most small nonprofits. It does the thing that matters most — fund accounting — correctly and natively, without the workarounds that make QuickBooks dangerous for nonprofits managing restricted funds. It also includes donor tracking and contribution statements, which eliminates the need for a separate CRM. At $59/mo, it’s more expensive than QuickBooks or Xero on paper, but cheaper than running QuickBooks plus a donor management tool plus the bookkeeper’s time fixing year-end fund balance errors.

If you’re a brand-new nonprofit with zero budget, start with Wave — but budget for Aplos within your first year.

If your bookkeeper insists on QuickBooks and you have simple fund structures, QuickBooks Online Plus is a reasonable choice. Just know that class tracking is not fund accounting, and you’ll need a separate tool for donor management.

SoftDecide helps churches, nonprofits, and small organizations find the right software. Our comparisons are independently researched. We may earn a commission if you purchase through links on this page — at no extra cost to you.