December 1, 2001 Todd Cohen
A nonprofit application for QuickBooks, accounting software for small businesses, is set for release in January by B2P, a Chicago firm that develops tech-based business tools for nonprofits.
The new product, to be called NonprofitBooks and bundled with QuickBooks, represents the first mass-market accounting software tailored for nonprofits.
“B2P wants to help the majority of nonprofits do good nonprofit accounting with an inexpensive and easy-to-use product,” said Jeanne Peters, financial management consultant for CompassPoint Nonprofit Services, a nonprofit technical assistance group in San Francisco and San Jose, and a member of B2P’s QuickBooks steering committee.
B2P is among the first 40 groups working with Intuit in Mountain View, Calif., in the software-maker’s first effort ever to help third-party developers build customized applications and products for QuickBooks.
B2P has not released the price of its application for QuickBooks — off-the-shelf, general-purpose accounting software that costs $150 to $250. Bill Levis, senior fellow at the Urban Institute in Washington, D.C., said he hoped B2P would keep the price to $300, compared to $1,200 to $10,000 for mid-range accounting software designed specifically for nonprofits.
The new application is a “breakthrough,” said Levis, co-author of Unified Financial Reporting System for Not-for-Profit Organizations. “Now there will be an industry-specific software product that goes along with QuickBooks,” he said.
Tim Mills-Groninger, associate executive director of the IT Resource Center in Chicago, a member of B2P’s QuickBooks steering committee and contributing editor for The NonProfit Times, called QuickBooks “one of the best examples of robust and easy-to-use general accounting software out there.” The NonProfit Times is not involved with the project. The new application, Mills-Groninger said, “is bringing substantial economies of scale to an important part of nonprofit management.”
QuickBooks is widely used by small and mid-sized nonprofits, which typically lack high-level accounting expertise, said Peters. Nonprofits with annual budgets of $1 million or less represent roughly 80 percent of charitable nonprofits in the United States, she said.
But even nonprofits using QuickBooks often hire consultants to set up their accounting systems and generate reports for funders and regulators, Saul said. “While QuickBooks is inexpensive, the use of it for nonprofit accounting purposes has a lot of collateral costs because it is not designed to meet the accounting needs of nonprofits, which are distinct,” he said.
QuickBooks, for example, helps small businesses track customers, departments and jobs, Saul said, while nonprofits need to track donors, programs and grants. Many nonprofits also deal with restricted grants requiring special accounting treatment and face a variety of reporting rules — needs that QuickBooks can’t handle easily, he said.
B2P created NonprofitBooks in partnership with a steering committee of 16 nonprofit and financial experts, including CompassPoint, the Nonprofit Financial Center in Chicago and the Michigan Accounting Aid Society in Detroit.
Workplace giving online
America’s Charities, a federation of 100 charities that raises $20 million a year in the workplace, is developing a Web-based system to let employers run their own campaigns and promote employee giving and volunteering.
The group, based in Chantilly, Va., also is talking with other federations and charities about creating a national workplace-giving resource center to provide services and technical support for employers and charities.
The two initiatives aim to meet the needs of companies that promote philanthropy as a business strategy but are not in the business of raising and processing charitable funds, said Steve Delfin, a member of America’s Charities’ board and director of community relations for Booz-Allen & Hamilton, the management consulting firm in McLean, Va. “Companies that are really integrating and looking at workplace philanthropy strategically are looking at how it fits into their broader employee relations and community relations efforts,” he said.
Booz-Allen developed PledgeFirst, a Web-based system that America’s Charities is piloting at five to 10 companies. Overall, the federation participates in more than 230 workplace campaigns involving 10 million employees.
Employers can customize the new system with their own logo and material, and include whichever charities they choose. It is designed to help companies more efficiently deduct employees’ donations from their paychecks, and can process contributions made using cash, check or credit card. The system tracks data on employee giving and volunteering that the company can use to make matching gifts, and features news and information on charities in the workplace campaign. It also gives campaign administrators current data and reports on overall contributions, employee participation rates and donations to designated charities.
“It’s a year-round model that employers can use to communicate with employees” and provide regular information about charities and volunteering, said Don Sodo, president and CEO of America’s Charities, which either will provide the system at no cost to employers and deduct $5 per donor plus 25 cents per employee from proceeds it distributes to charities or, if an employer opts to pay those costs for the system, will distribute 100 percent of all employee gifts.
By comparison, Sodo said, the cost of commercial Web-based workplace-giving systems typically ranges from $25,000 to $200,000. United Way, the traditional fiscal agent for workplace campaigns, typically keeps 10 percent to 15 percent of employee gifts to cover costs.
An informal group of corporate executives advised America’s Charities on development of the new product, which is designed to be revenue-neutral and tap the federation’s nonprofit experience. “The idea is to help companies streamline and make more efficient their fiscal process, thereby maximizing the pass-through of charitable dollars,” said Delfin.
The consulting firm plans to phase in PledgeFirst at its internal Web site that features content about philanthropy and volunteerism, initially testing the product among 2,500 employees before making it available to all 11,000 employees.
America’s Charities also is talking with other fundraising federations and charities about creating a nonprofit center to provide direct services, research and technical support on workplace giving for companies and nonprofits, Sodo said. The center, for example, might offer companies and federations centralized fiscal services such as tracking donations and employee participation designed to reduce duplication and costs.
It also would conduct research on issues such as best practices in workplace-giving and matching gifts, and provide assistance with campaign communications and evaluation.
“We’re looking at partnering with some other folks to make something like that happen,” Sodo said. “We think this would be a service to the sector as a whole.”