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

[Edward Bainton]

Thank you all for these responses: very helpful indeed. It does indeed
sound like GnuCash will do the job, with some gentle 'hacks' for our
particular needs.

I guess my only remaining question is how long it takes to learn it. I'm a
bit of a geek (who on opensource freeware isn't?) and will happily commit
many hours to it. But in the name of continuity to the next treasurer, I
ought to consider whether the more familiar Excel would be better.

Any thoughts on pros and cons there?

Our Excel sheet (downloadable here
<http://www.from.smallcharitysupport.uk/SCS-accounts/SAS-Example.xlsx> if
you're interested, sourced from here
<https://www.smallcharitysupport.uk/index.php/simple-accounts>) is
tolerably suitable, but given the complexity of all I've described, breaks
extremely easily. On the other hand, the input bit (including allocating to
different categories, funds, etc) is intuitive and familiar to non-geeks: a
paid code monkey could mend the back end as and when needed.

PS @Michael, 'restricted' refers to the trusts on which funds are
held. Legally, the trust arises when the money passes out of the donor's
control. Eg, one of our charitable purposes is "education", but we might
receive a donation "for the under-10s classes": that money can then can
only be spent on those classes. For obvious reasons we try to avoid these
as far as possible, but some are inevitable.



On Sun, 22 Mar 2020 at 15:43, Michael or Penny Novack <
stepbystepfarm at comcast.net> wrote:

> 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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