Glossary / Fund Accounting
What is Fund Accounting?
An accounting system that tracks resources by fund (restricted, temporarily restricted, unrestricted) rather than by profit.
Simple definition
An accounting system that tracks resources by fund (restricted, temporarily restricted, unrestricted) rather than by profit. The standard for nonprofit financial management. Ensures donor restrictions are honored and compliance requirements are met. Alignmint includes true fund accounting with 38+ fund balances.
Why it matters for your nonprofit
Nonprofits must show where money came from and where it went by purpose—not just whether the checkbook balances.
How it shows up in daily work
Each program, grant, and campaign gets its own fund. Deposits, checks, and card charges carry a fund code so statements roll up correctly for the board and Form 990.
Common mistakes
- Using a for-profit chart of accounts with classes instead of true nonprofit funds.
- Letting development and finance use different labels for the same restricted gift.
- Closing the year before all inter-fund transfers are reconciled.
How Alignmint helps
Alignmint ties fund accounting, donor records, and reporting in one place so terms like Fund Accounting show up correctly in your books—not only in a policy memo.
FAQ
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Questions about your books?
Schedule a free walkthrough. We will help you see fund balances, donor history, and reporting in one system.