How to Setup Donors in QuickBooks for Nonprofits
Published 04/27/2009 | 
The organizations renting your facilities should also be customers. But the customer center really isn't meant to be used the way you're using it. Customer should be the name of the donor or organization, use the customer type field or create a custom field to categorize them into donors, private parties, etc. Both are located on the Additional Info tab in the customer records. I recommend using the type field for donors and facilities and create a custom field to categorize the type of facilities (private party, etc.)
You're using classes appropriately, except I recommend making a specific fundraising event a sub-class under Fundraising rather than a Job. You should use Jobs for grants though. Establish the granting agency as a customer and list each individual grant from them as a Job. If they are multi-year, you should also set them as a sub-class under Temporarily Restricted funds, which is where you book the revenue. As you spend down the grant, you transfer the funds to your operating fund.
Are you using Premier Nonprofit or Pro? The online version is similar to Pro, but I usually recommend Premier Nonprofit for nonprofits because it's got some really useful reports and Word templates not found in the other versions. If Pro works fine for you, than Online will as well. But there's a monthly subscription fee, so you may find that it's more expensive in the long run.
Let me know if there's anything else we can help you with!
This article is provided for informational purposes and is not intended to be construed as legal, accounting, or other professional advice. For further information, please consult appropriate professional advice from your attorney and certified public accountant.
Written by +Ruth Perryman, CMA, CFE, CFM, MBA
Ruth is the president of The QB Specialists, an Intuit Premier Reseller that offers huge savings and expert advice on QuickBooks POS and QuickBooks Enterprise. She is an Advanced Certified QuickBooks ProAdvisor and a member of Intuit’s Trainer/Writer Network. She is also certified in QuickBooks POS and QuickBooks Enterprise and has provided expert QuickBooks help to thousands of businesses all over the world since 1996.
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Ruth,
I am working to set up the books of a non profit company and trying to teach myself quickbooks at the same time. The company is required to send 10% of all donations to their “headquartered affiliate”. Is there a way for me to set up the payable when I create the invoices and collect payment from the donee? Should I set it up as a sales tax perhaps. Thank you.
But if I set it up as a sales tax to create a payable through the invoice, I will actually never collect the sales tax because it is really already collected in the donation?
Hi Lori,
You can’t use sales tax because it’ll increase the balance on the invoice so it’s higher than the payment.
Personally, I’d just use the Profit & Loss report to determine how much to send the headquartered affiliate.
If you really want to track it on the invoice, you’ll need to create two items – one with a positive amount, the other with a negative amount – so the invoice total still matches the payment.
One should be mapped to a current liability account – it’ll have the positive amount. The other will probably be mapped to an expense account – it’ll have the negative amount. The balance in the current liability account is what’s owed to the headquartered affiliate.
Ruth
I’ve just taken over as Financial manager at my church. I’ve had a crash course in learning Quick Book Pro 2009. What I want to do is set up donors in Quick books. The above explanation is helpful, but in essence members of our congregation pay their tithe and I want to record this in Quick Books. We are currently using excel to record the individual donations, but believe Quick Books would be more efficient to use. I know that I go to Customer > Enter Sales Receipt. Once I pull up the receipt I just need a little clarity of inputting information that is needed.
1. Customer job = Donor
2. Class = Contribution type (in this case ‘tithe’ would be the type)
3. Item = ???? (I need help here) When I click on this the New Item screen comes up. Need help filling out this screen.
Hi Sonja,
The item would be the contribution type, in this case tithe. You don’t need to use classes unless you want to track the profitability of departments or regions.
Ruth
Thank you for responding to my question. I have set up the contributors as customers. When I look at All Transactions for a particular donor, it says under Account, ‘Undeposited Funds’. Is it suppose to say this.
Hi Sonja,
If you are depositing your invoice payments and sales receipts to undeposited funds, yes. And unless you deposit each payment separately at the bank, you should be depositing them to undeposited funds. It’s the only way to group multiple payments into one deposit.
Ruth
Hi Gloria,
Thank you for helping us all. I have a question please.
I have non profit quickbooks. I work for a school. We receive state grants (scholarships) that have to cover tuition of students that are on financial aid. I do not know how to record the scholarships. I think I have to record an income transaction then an expense to show that it is used for a specific student. Would you please give me the step by step procedures to record them. Do I have to record both transcation for every scholarship please?
Thanks a lot.
Happy Thanksgiving.
Fouzia
Hi Fouzia,
First, you should check with your tax professional for specific guidance about which GL accounts to book these grants to.
But I’d create a job under each student’s customer record for each payment source so you can apply the payment to the student’s account. If you’re using invoices to record the full tuition due on invoices, use Customers > Receive Payment to apply the payment to the invoice. If not, use a sales receipt.
Ruth
we combine donations by assigning a class/general ledger code where a subtotal is generated by a donation software product. It takes time to input indiv donations into donation software and generate a report subtotalling by general ledger account codes. Can we separate the two operations? that is, can we take the total of the cash/check receipts and enter a deposit for purposes of updating our bank balance and then enter the subtotal general ledger account amounts at a later time? Will this cause a duplicate entry as it relates to our financial position?
Hi Gloria,
You can enter the deposit without breaking out the accounts, but you’ll have to enter at least one account because QuickBooks needs to balance. You can’t increase cash without also affecting another account. I’d use a revenue account called something like “uncategorized revenue”.
When you’re ready to enter the accounts, you can use a journal entry with a credit for each G/L account and a debit to the “uncategorized revenue” account.
Ruth
I have used QuickBooks for my businesses, but now I am trying to learn the nonprofit QuickBooks for a homeless
ministry. I have not been able to find an easy way to print out itemized statements for the year for each Customer.
I also need to make corrections in my customers. Such as having them under two different names and needing to merge them together, or needing to correct the spelling of a name. I have not been able to figure these things out on my own. Please Help!!!!
Hi Marian,
Here’s our blog post abut how to create annual donor acknowledgement statements:
http://www.theqbspecialists.com/quickbooks-help/2009/07/09/how-to-prepare-year-end-donation-acknowledgement-statements-in-quickbooks/
You can edit your customers/donors by going to the Customer Center and double-clicking on the customer. To merge customers, change the name of the one you want to merge to the same exact name as the one you want to merge it into (I recommend a copy/paste). You’ll get a message that the customer already exists asking if you want to merge them.
This same trick works for mot list items (vendors, items and chart of accounts, etc.) as well.
Ruth