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DreamFunder
April 3, 2024
Question

How to track individual scholarship funds at a nonprofit scholarship foundation

  • April 3, 2024
  • 4 replies
  • 0 views

Our small, nonprofit scholarship foundation offers dozens of distinctly named scholarships for which we want to track donations, outgoing scholarship payments, and investment value. A small group of volunteers are setting up QuickBooks Online Plus (licensed from TechSoup) for the first time; our bookkeeping was previously done manually.

 

We are researching the best option for tracking the scholarship funds in QB and would love community input. We thought about using QB class tracking, but it looks like we would be at/over the limit of 40 classes. 

 

Another possibility is using projects. Are projects the appropriate concept? Can we track project donations by customer/donor, then expenses would be for scholarship payouts to schools? Would we also be able to track the scholarship recipient in this scenario? 

 

What other methods might allow us to track activities for 40+ scholarship funds?

 

Thanks in advance for your ideas!

4 replies

G
GlinetteC
April 3, 2024

I have the information you need to track funds for non-profit organizations, fpf.

 

Tracking donations in Quickbooks Online depends on how you receive them. You can record and track them as a sales receipt, bank deposit, or a pledge.

 

To track funds for non-profit organizations in QuickBooks Online, follow these steps:

 

  1. Create a revenue account: Call this account a "Fund Donations" account to track the money you receive. Make sure to select "Non-Profit Income" as the detail type.
  2. Create a fund donation item: This item helps you track fund donations from different donors. Create a "Fund Donations" item and link it to the revenue account you set up.
  3. Add your donor as a customer: Enter your donor's information as a customer in QuickBooks.

 

Track the fund donation. If you receive the donation right away, create a sales receipt.

 

  1. Customize the sales receipt using your donation template.
  2. Select the donor and the fund donation item you created.
  3. Choose the Payment method and save the sales receipt.

 

If you received the funds directly, record a bank deposit by creating a bank deposit entry. Choose the donor and the revenue account you set up for donations.

 

When a donor promises to donate at a later date, you can record a pledge for it. First, record the donation by selecting + New and Pledge. Choose your donation template and select the donor and the specific donation item. Save and close or email a receipt to your donor.

 

Once you receive the donation, record the receipt:

 

  1. Select + New and Receive payment.
  2. Update the payment date, and select the donor.
  3. Choose the Payment method and deposit destination. 
  4. Select the checkbox for the pledge and then Save it.

 

With these steps, you can track funds properly for your non-profit organization in QuickBooks Online.

 

I’ll be around if you have further concerns or questions about tracking scholarship funds. I’ll be more than happy to assist you. 

    D
    DreamFunderAuthor
    April 6, 2024

    Thank you for this detailed information. This will help us think through the entire workflow, even if it doesn't exactly match our need to track donor-restricted funds (as mentioned by another commenter.

    Rainflurry
    Rainflurry
    April 3, 2024

    @DreamFunder 

     

    Consider using tags instead of classes.  If you use classes, you are required to enter a class for every single transaction entered in QBO.  If these donation are considered donor-restricted until the scholarships are issued, you need to create restricted fund equity account(s) for the each donation received because the donations are not income to your NFP until the donor restrictions are lifted.  If that's the case, you can create separate fund sub-equity accounts for each scholarship. Depending on what version of QBO you're using, you may be limited to 250 accounts in your chart of accounts which may or may not be an issue for you.    

      D
      DreamFunderAuthor
      April 6, 2024

      Thank you for the idea about tags. We may explore this vs projects, to see which offers the reporting we desire. Appreciate you sharing your expertise!

      Rainflurry
      Rainflurry
      April 3, 2024

      @DreamFunder 

       

      Also, be cautious of any advice from QB employees on this issue.  The advice posted by @GlinetteC would record all donation as income to your NFP, which may or may not be the case.  

        D
        DreamFunderAuthor
        April 6, 2024

        This is sage advise. Thank you for understanding that most of our donations come in the form of donor restricted funds for specific scholarships.

        D
        DreamFunderAuthor
        April 6, 2024

        It doesn't appear that my indiviudal replies to each commenter are properly threaded (system bug?) and there is no way to edit or delete my comments. So, thanks to all who responded so far. It may take us a while to sort through these ideas and test out solutions. I will update this thread when I have more information to share.

        T
        TP-FFAS
        May 28, 2024

        Thanks for asking this question, I am in the same boat and looking at how to manage this better. We transitioned over to QBO from Desktop and trying to utilize the features. We currently use classes to track our scholarship accounts but considering reducing the number of classes for each named scholarship and just transitioning over to tags. Could anyone provide pros and cons of this?

        K
        Kevin_C
        May 28, 2024

        It's nice to have you join this thread, @TP-FFAS. I'd gladly explain the difference between using the class and tags features in QuickBooks Online (QBO).

         

        In QBO, classes and tags are used to organize transactions so you can easily track them precisely and efficiently. Let's go over the pros and cons of these features.

         

        • Tags allow you to track information at the transaction level and not per line items.
        • Use tags to track specific transaction details, such as project names, product lines, or other custom criteria.
        • You can assign multiple tags to transactions, making them versatile.
        • For QBO Simple Start, Essentials, and Plus, there are a max of 40 tag groups and a max of 300 tags. QBO Advanced has unlimited tag groups but a standard tag max of 300.
        • However, please note that tags have a limited report option for viewing your tagged transactions. You'll have to group your tags to get the best insights and targeted lenses.

         

        You can visit these articles for additional details about how the tag feature works:

         

         

        Classes are primarily used for grouping income and expenses related to specific projects, departments, or other segments of your business. They help with job costing, budgeting, and fund accounting.

         

        • Classes allow you to organize transactions based on predefined categories.
        • You can use classes for specific transaction line items.
        • You can only assign one specific class per transaction.
        • You can quickly generate reports for transactions with classes. It helps prepare Profit & Loss reports by creating columns for detailed comparisons.
        • Classes can have up to 40 classes and combined with locations

         

        Here are a couple of articles that discuss the class option further:

         

         

        Additionally, you may visit this article to learn more about the maximum number of entries and features you can use within the program: Learn about usage limits in QuickBooks Online.

         

        Please reply to this thread if you have additional concerns about using tags and classes in QBO. I'll be looking forward to your response. Stay safe.

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