Classes are ideal for tracking the information needed for the Statement of Functional Expense: Program, Management and General, and Fundraising.I don’t recommend this method, for several reasons: In short, do the tax preparer a favor, and be a good steward of the organization’s resources: don’t use accounts that require translation or a calculator to flow to your 990! Some organizations may try to use Classes to manage restricted contributions What are “natural categories” of contributed income? Some organizations manage restricted contributions in their chart of accountsĭon’t do this! You should use the chart of accounts to track the “natural categories” of income and expense needed to run the organization and report to the IRS on the annual 990 filing. If it is properly set up and maintained, QuickBooks Online is an effective and affordable tool for nonprofit organizations and even provides some options not available in the desktop version. While that is false, it is TRUE that the need to accurately account for restricted contributions is one of the key differences in working with nonprofits. It’s a common misconception that nonprofits are run entirely with other people’s money – meaning grants and donations.