Free Nonprofit Fund Accounting Tracker
Fund Accounting Tracker for Nonprofits
Track restricted and unrestricted funds, log transactions, and see real-time balances by donor-restriction class. Built for 501(c)(3) bookkeeping.
Send these funds into the Statement of Activities to build your nonprofit income statement.
Send to Statement of Activities →Fund Accounting for Nonprofits — A Plain-English Guide
What is fund accounting?
Fund accounting is the method nonprofits use to track money by purpose, not just by amount. A business asks "how much money do we have?" A nonprofit has to ask "how much money do we have, and what are we allowed to spend it on?" That second question is what fund accounting answers.
Instead of one big pool of cash, a nonprofit separates money into funds based on donor restrictions and board designations. This keeps you compliant, keeps donors trusting you, and keeps your audit clean.
Unrestricted
Money you can use for any mission-related purpose. General donations, most earned revenue. Your operating flexibility lives here.
Temporarily Restricted
Money a donor gave for a specific purpose or time period (e.g., "this $10,000 is for your summer youth program"). You must spend it on that, then it's "released" to unrestricted once the purpose is met.
Permanently Restricted
Usually endowments: the principal must stay intact forever; you can only use the investment income.
Note: under FASB ASU 2016-14, the official external-reporting categories are now "net assets without donor restrictions" and "net assets with donor restrictions" — but internally, most nonprofits still track all three buckets above because the distinction matters for management.
Worked example
Your nonprofit receives $50,000 in general donations (unrestricted) + a $20,000 grant earmarked for a literacy program (temporarily restricted). You spend $8,000 on the literacy program and $15,000 on general operations.
- Literacy fund: $20,000 − $8,000 = $12,000 still restricted (must be spent on literacy)
- General fund: $50,000 − $15,000 = $35,000 unrestricted
- $8,000 of restricted money is "released" to unrestricted because the purpose was met.
A normal checking-account view would just show "$47,000 left" — and hide the fact that $12,000 of it is spoken for. That's the trap fund accounting prevents.
Holdings automates fund accounting
Connect your bank and Holdings tracks restricted vs. unrestricted balances automatically — no spreadsheets, audit-ready.
Holdings automates fund accounting →Track your nonprofit's money the way auditors and donors expect — by fund. Set up restricted and unrestricted funds, log transactions against each, and watch real-time balances so you never accidentally overspend restricted money. Free, no signup, with a plain-English guide to fund accounting built in.
How to Track Funds for Your Nonprofit
- 1
Set up your funds
Create a fund for each restriction — General Operating, grants, building campaigns, etc.
- 2
Log transactions
Tag every dollar in and out to the right fund.
- 3
Watch your balances
See each fund's real balance so you never spend restricted money on the wrong thing.
- 4
Release restrictions
When a restricted purpose is fulfilled, move those funds to unrestricted.
- 5
Build your statements
Roll funds into your Statement of Activities and Statement of Financial Position.
Why Track Funds Separately?
Stay audit-ready
Restricted vs. unrestricted net assets are required on your Form 990 and audited financials.
Keep donor trust
Prove every restricted gift went where the donor intended.
Avoid the cash trap
Your bank balance hides which money is already spoken for. Fund tracking shows what you can actually spend.
Free and built for nonprofits
Most accounting tools bolt fund accounting on awkwardly. This is purpose-built.
Frequently Asked Questions
What is fund accounting?
Fund accounting tracks money by purpose, not just amount — separating restricted donor funds from money you can spend freely. It's the standard method nonprofits use.
What are the three types of funds?
Unrestricted (use for any mission purpose), temporarily restricted (donor-specified purpose or time), and permanently restricted (endowment principal).
Is fund accounting required for nonprofits?
Functionally yes — to comply with FASB standards and report restricted vs. unrestricted net assets correctly on your 990.
Can I do fund accounting in a spreadsheet?
You can start there, but it gets error-prone fast. This tracker (and Holdings' automated bookkeeping) keeps fund balances accurate without manual tagging.
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