[GNC] Using GnuCash for cash-basis charity/fund accounting?

[Michael or Penny Novack]

I will make this simple. If you know how you would do this the old 
fashioned way, pen and ink on paper, then you can do it using gnucash. 
Using cash basis is easy provided you aren't invoicing (the business 
features assume accrual basis).

The only complication I can see is the "donor reporting" requirement and 
I do not know UK regs (like when is RESTRICTED donation considered 
"made" by a donor -- for reporting purposes -- when received or when  
used). It is the interactions of donor reporting and accounting for 
restricted funds that complications might arise BUT that is not strictly 
speaking a gnucash matter as you would have the same issues pen and ink 
on paper.
<< note: I am not experienced with donor accounting only because all the 
organizations I have kept books for avoided having any reportable 
donations. Here we DO have to report "fat cat" or large "insider" 
donations BUT would arrange to have these funneled via the national 
associated org for which these not "large enough to need reporting". 
After five years a small 501(c)3 here doesn't have to keep proving 1/3 
of its donations are from the broad public so it has been decades since 
I would have done this and when I was could simply keep entering "none" 
for "fat cat" and "insider" donations as we avoided them >>

Although it is extra work entering the donation transactions, you MIGHT 
want to consider a separate "donations" book (especially if restricted 
donations are credited to/reportable by donor when made). You would have 
the additional work in any case. This depends on whether for your 
organization restricted donations rare or the norm.

Separating "program expense" from "overhead expenses" is trivial (just 
how you arrange the expense tree) with the only possible complication if 
as here, SOME type of expense is reportable as a line item whether 
"program" or "overhead" << here in the US, "printing and postage" would 
be an example of that -- a nuisance >>. But again, this is not strictly 
speaking a gnucash issue.

Again, gnucash is just like old fashioned bookkeeping EXCEPT
1) Autoposting in reverse -- you enter transactions directly into the 
ledger, the journal is virtual. Resembles "cashbook" accounting except 
for all accounts, not just a few.
2) It can generate all the usual report without closing books, etc. You 
just need to set the report date(s) correctly.
3) No math errors, transcription errors, etc. Gnucash will tell you if 
OOB. But it can't prevent you from specifying the wrong account(s), 
can't read your mind.

Michael D Novack

PS -- I will help with non-profit/charitable accounting.


On 3/21/2020 5:39 PM, Edward Bainton wrote:
> Hi all
>
> I'm de facto treasurer of a tiny UK charity (<GBP5000pa).
>
> I'm brand new to GnuCash (it's fresh out of the box). I know the rudiments
> of double entry bookkeeping from copious reading over the past few months.
>
> UK charity reporting is quite onerous. What I need is:
>
> * To use cash basis accounting (but possibly 'traditional accounting' would
> be no more difficult, given we don't invoice/give credit?)
> * To separately report donations made by named individuals
> ** one donor might at different times donate using cash, PayPal, or direct
> bank transfer
> * To report whether a given payment was in pursuit of charitable aim
> "education", or charitable aim "relief of poverty", or general admin
> * To report what category a payment falls into: eg, premises hire, teacher
> fees, hardship grant to beneficiaries
> * To report whether a receipt or a payment is applied to the unrestricted
> fund or to the "hardship fund", the "free meals fund", etc
> ** (different funds are held on different trusts)
> * For unrestricted funds, whether the R or P is applied to a designated
> fund (eg, "provision for insurance") or is undesignated.
>
> Can GnuCash do this? If so, any pointers on how to get started?
>
> Massively broad question, I realise. My search of the archives suggest
> "Yes", but give guidance that is too advanced (and too conflicting) for my
> needs at this stage.
>
> Many thanks indeed.
>
> Edward
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There is no possibility of social justice on a dead planet except the equality of the grave.