Non-Profit Accounting Software
+ +
+
+Conservancy has a plan to help all non-profit organizations (NPOs) by +creating an Open Source and Free Software accounting system usable by +non-technical bookkeepers, accountants, and non-profit managers. You can +help us do it by donating now. +
+ +News
+ +31 August 2016: We're beginning work on a system for Payment and Reimbursement Requests. This is a smaller piece of the larger NPO Accounting project. Because it doesn't require much integration with larger accounting systems, we can help address this specific bookkeeping problem for NPOs sooner, and start building interest in the larger NPO Accounting project.
+ +We haven't started writing code yet, so now's a great time to get in on the ground floor! Check the Requirements document we're putting together on the wiki. Join us on the mailing list to let us know what's missing, and hear first other ways you can contribute as we start building the system.
+ +What is the Non-Profit Accounting Software Project?
+ +To keep their books and produce annual government filings, most NPOs rely +on proprietary software, paying exorbitant licensing fees. This is +fundamentally at cross purposes with their underlying missions of charity, +equality, democracy, and sharing.
+ +This project has the potential to save the non-profit sector +millions in licensing fees every year. Even non-profits that continue to use proprietary accounting +software will benefit, since the existence of quality Open Source and Free + Software for a particular task curtails predatory behavior by proprietary + software companies, and creates a new standard of comparison.
+ +But, more powerfully, this project's realization +will increase the agility and collaborative potential +for the non-profit sector — a boon to funders, boards, and employees — bringing the Free Software and general NPO communities +into closer collaboration and understanding.
+ +Endorsers of this effort include April, Fractured Atlas, The Free Software +Foundation, Mozilla Foundation, GNOME Foundation, OpenHatch, Open +Source Initiative, QuestionCopyright.org, and Software in the Public +Interest; all encourage you to donate and support it.
+ + +Background
+ +Like many non-profit organizations (NPOs) in the USA, Conservancy's + financial accounts are audited annually by an independent accounting firm; + we recently completed our fiscal year 2011 audit. As usual, our auditors + asked plenty of questions about our accounting software. Conservancy uses + only Free Software, of course, centered around a set of straightforward reporting + scripts that we created to run on top + of Ledger CLI. (Conservancy's + current configuration using Ledger CLI + is publicly + documented and explained.)
+ +Our auditors were only familiar with proprietary accounting software, and
+ so our system seemed foreign to them, as it relies on Ledger CLI's text files, Emacs and
+ version control. During their questions
+ about our setup, we asked them to hypothetically prescribe a specific
+ proprietary software setup as a model for managing Conservancy's
+ accounts. Our chief auditor started by mentioning a few well-known
+ proprietary solutions. But then he paused and continued: Given
+ that Conservancy's a fiscal sponsor with so many temporarily restricted
+ accounts, existing systems really wouldn't do that good of a job for
+ you
.
Indeed, Conservancy reached out into the broader fiscal sponsorship + community beyond the FLOSS + NPO community and discovered that many larger fiscal sponsors — even + those willing to use proprietary components — have cobbled together + their own unique systems, idiosyncratically tailored to their specific + environments. Thus, good, well-designed, and reusable accounting software + for non-profit fiscal sponsorship is not just missing in the software + freedom community; it's missing altogether.
+ + +The project that Conservancy proposes will take a modest step + forward in creating a better solution for everyone. + Many NPO leaders and academics agree with Conservancy about the + immediate need for work to begin on this + effort. April, Fractured Atlas, The Free Software + Foundation, The Mozilla +Foundation, The GNOME Foundation, OpenHatch, Open Source Initiative, + QuestionCopyright.org, and Software in the Public Interest have + all endorsed Conservancy's plan, and they encourage you to donate and + support it.
+ +Conservancy is uniquely qualified to undertake this task. Using only Free + Software, Conservancy already meets the complex accounting challenges of + earmarked, directed donations for over thirty different projects. We've + learned much about this work in our first seven years of + operation, and we're prepared to apply what we've learned to solve + this problem not just for ourselves, but for anyone who seeks a + solution that both respects software freedom and handles non-profit + accounting for all sorts of NPOs, including fiscal sponsors. General NPO + accounting is just a “base case” of fiscal sponsorship (i.e., + an NPO is just a fiscal sponsor for one and only one specific project), + and Conservancy therefore believes a solution that handles fiscal sponsors + will also handle the simpler case as well.
+ +Why Conservancy Must Fund This Work
+ +As it stands, nearly all Open Source and Free Software NPOs either use + proprietary software, or fully outsource their bookkeeping and accounting + to third-parties. Those that don't do so (such as Conservancy and the Free + Software Foundation) have long complained that existing Free Software in + this area is inadequate, and have been forced to develop customized, + one-off solutions in-house to make the systems work.
+ +It's highly unlikely that the for-profit sector will adapt existing Free + Software accounting systems to meet the differing needs of NPOs (let alone + the more complex needs of fiscal sponsors; based on + advice from our auditors and other fiscal sponsors, Conservancy understands that no existing + solution — proprietary or Free — meets the requirements of fiscal sponsorship accounting). Fiscal sponsors like + Conservancy must track a separate set of books for every project, keeping + in mind that a project may leave at any time for another NPO and need to take + their books with them. Yet, the books of the entire organization are the + aggregate of the books of all these projects, and internally, they need to + be presented as a single set of books for those purposes.
+ +Meanwhile, even if an organization is not a fiscal sponsor, non-profit + accounting is just different than for-profit accounting, particularly in + the USA. For example, for-profit-oriented systems often make problematic + assumptions about the workflow of accounting tasks (often because NPOs + rely primarily on donations, rather than fee-for-service or widget-selling + income). Also, non-profit income is categorized differently than + for-profit income, and the reporting requirements vary wildly from their + for-profit equivalents.
+ +Conservancy's existing system is working adequately, but requires daily + the relatively more expensive time of a highly technical person to do the + job of bookkeeping. Also, the system cannot easily be adapted in its + current form for another NPO, unless they also have a + skilled technical employee to act as bookkeeper. This project aims to build + on what Conservancy has learned and produce a non-profit accounting system + that corrects these flaws.
+ +Finally, Conservancy's mission (as stated +on our Form +1023 with the USA IRS) includes producing Open Source and Free Software. +Thus, this project is a great way to pursue Conservancy's mission and address a +specific need that so many NPOs (including us) have. If no one steps up to create Free Software to replace the widely used +proprietary software, NPOs in aggregate will pay much more money for +proprietary licensing than Conservancy will ever spend in developing a +replacement. Please donate +generously to help us do it!
+ + +Statements of Support For This Project from Others
+ +As a national fiscal sponsor with over 3,000 arts and cultural projects
+under our umbrella, Fractured Atlas is ecstatic about this effort's
+potential. After 15 years wrestling with Quickbooks and other inadequate
+options, the idea of an open source tool designed specifically for this niche
+of the field is beyond welcome. We wholeheartedly support the Conservancy's
+work on this front and look forward to seeing where it leads.
—
+Adam
+ Huttler, Chief Executive Officer, Fractured Atlas
QuestionCopyright.org is
+just one of many organizations that would benefit from a Free Software
+accounting system that is usable by non-technical people. We
+enthusiastically support the Conservancy's campaign to create one, and look
+forward to using the result.
+— Karl
+Fogel, Executive Director,
+ QuestionCopyright.org
Software in the Public Interest is a fiscal sponsor for 44 free and open
+source projects. We share many of the accounting needs and challenges of
+the Conservancy and are excited to collaborate on a Free Software
+solution to these needs and challenges.
+— Michael Schultheiss, Treasurer, Software
+ in the Public Interest
Open Source accounting software specifically tailored for non-profits
+ will fill a pretty large need.
+ — Thad Calabrese,
+ Assistant Professor of Public and Nonprofit Financial Management
+ at NYU Wagner, and co-author
+ of Financial Management for Public, Health, and Not-for-Profit
+ Organizations, 4th Edition.
The Open Source Initiative has shared the experiences of Software
+ Freedom Conservancy in navigating the financial management needs of
+ non-profit organisations and shares their concern. We have many NPOs as
+ members and we welcome this useful initiative by Conservancy.
+ — Simon Phipps, (former) President, Open Source
+ Initiative
The Free Software Foundation is committed to doing all of its work,
+both public-facing and internal, using only free software. We are thankful to
+the developers of SQL Ledger for providing the accounting software that has
+served us well for many years. As we have grown, so have the complexities of
+our finances. Because of our own needs and our mission to help other
+organizations — both inside and outside of the technology sphere
+— run their operations on exclusively free software, we wholeheartedly
+support this Conservancy initiative.
— John Sullivan, Executive
+Director, Free Software Foundation
Open source is a great way to solve new problems and make software that
+is more flexible and responsive to the needs of the people who use it. That's
+as true for the finance industry as it is on the web.
+— Mark
+Surman, Executive
+Director, Mozilla
+Foundation
As a young free software non-profit, OpenHatch is thrilled to see this
+effort; it would let us spend more of our time on programs and less on
+paperwork. I have already personally donated.
— Asheesh Laroia,
+Founder, OpenHatch