Keeping track of funds is a critical component of fiscal sponsorship. In fact, accounting is probably the most important part of what a fiscal sponsor does on behalf of its sponsored projects.
By definition, a fiscal sponsor is a nonprofit organization that provides fiduciary oversight, financial management, and other administrative services to help a project or program raise funds via the sponsor’s tax-exempt status. A fiscal sponsors' 501(c)(3) tax status relies on their ability to track and manage these funds accurately. Because of the benefits it offers, any kind of tax-exempt status it’s a hard thing to get - and an even harder thing to keep.
Failing an audit is always pretty high stakes, but for a fiscal sponsor its even higher risk because it puts lots of organizations at risk.
More than just protecting your tax status though, it’s important to think about financial stewardship of funds and proving to donors that you’re accountable and transparent with focusing funds on your mission (even if they don’t always know to ask). 92% of all fiscal sponsor cite Financial Services as their top service (fund receipts, bookkeeping, reporting, and oversight), more than any other category including fundraising and any other back office service.
Picking the right system can keep you proactively audit-ready, while also providing a valuable service to your community of sponsored leaders.
Background: What do most fiscal sponsors use?
The best data we have is the 2023 Field Scan by Social Impact Commons. It found that most sponsors are not using enterprise-level accounting systems:
QuickBooks: 51%
Sage Intacct: 12%
NetSuite: 8%
Source: Social Impact Commons 2023 Field Scan
It's important to consider this data by fiscal sponsor size. Most organizations with <$10M in expenses are on QuickBooks.
Above that, you start to see more enterprise systems (Sage, NetSuite) as organizations have more customized workflows. This makes sense, as the cost steps up from $170 per year to $10K+ per year. Plus, consultants to implement and customize your instance can create even greater costs.
Source: Social Impact Commons 2023 Field Scan
How should you make this decision for your organization?
Ultimately, this decision boils down to a few things for fiscal sponsors. Some questions to ask yourself before you get started:
Your staff
Do you have the right talent with the experience? Keep in mind that you will have staff turnover
Is there a good community of other users who can help you if you run into issues?
Your sponsored projects
How much you want to allow customization by project
Do you want to give your sponsored leaders access and/or visibility? How much is available? How much training do they need?
Your operations
How complicated is it to administer?
is it all-in-one?
Does it integrate with the other tools that you like to use
Are there meaningful automations that save your team time?
Key Features for fiscal sponsors:
Criteria
QuickBooks Online
Sage Intacct
NetSuite
Best for
Small to mid-size sponsors with under 50 projects
Mid-size to large sponsors ready for multi-entity reporting
Large enterprise sponsors with complex needs
Cost
🟢 ~$180/year
🟡 $5-10K/year minimum
🟡 Varies, but $10K+/year
Level of Complexity
🟢 As straightforward as it gets
🟡 Moderate learning curve
🔴 Experience required
Sponsor Fit (Model A / C)
Supports both A and C
Supports both A and C
Supports both A and C
Dimensionality (Projects, Grants, Funds)
🟡 Classes & locations
🟢 True multi-dimensional GL
🟢 Advanced segmentation
Permissions & Segregation
🟡 Basic roles only
🟢 Granular controls
🟢 Enterprise-grade permissions
Allocations & Shared Costs
🔴 Manual
🟢 Semi-automated
🟢 Advanced
Project Visibility
🔴 Not without another tool
🟡 Needs additional licenses
🟡 Needs additional licenses
Project Autonomy
🔴 Not without another tool
🟢 Semi-automated
🟢 Advanced
Integrations
🟢 Rich app ecosystem
🟢 Strong automation & API
🟢 Extensive ERP-level automation
Fund Accounting
🔴 Not built in
🟢 Strong fund controls
🟢 Full compliance suite
Restricted vs Unrestricted Fund Tracking
🔴 Not built in
🟡 Needs extra config
🟢 Complex, tied to configuration
Support Ecosystem
🟢 Huge user base
🟡 Nonprofit-savvy partners
🟡 Enterprise consultants
Pricing / Cost Comparison
All pricing is subject to change, and that usually means its going up.
The top 3 platforms offer nonprofit-specific packaging and pricing, however you may need to purchase through a partner to get those benefits.
Quickbooks Online can be purchased through Techsoup
NetSuite Social Impact Program: discounts might be available, but not publicly listed.
A caveat: No tool is pre-packaged for fiscal sponsors, who have a high degree of complex financial needs (e.g. fund accounting, permissions, and approvals) with a high number of potential users across the project portfolio. Commercial models between accounting platforms are more different than you’d expect. Some prefer user-based pricing, some are more module based, like you’ll pay more for a budgeting/planning tool. These can drive significant price increases and staff time cost down the line.
We also recommend thinking in terms of Total Cost of Ownership (TCO): which includes both the hard costs and soft costs of running an accounting system.
Soft Costs: indirect costs of your time and talent
Staff time to learn and maintain the system (higher for more complex systems)
Time spent fixing data errors or reconciling accounts
Communication inefficiencies between staff and sponsored leaders
Delays in audits or grant reimbursements
Extra work to generate insights
Manual workarounds
Staff turnover
Project onboarding and transition time
Our Picks
Fiscal Sponsors with <$10M in expenses: QuickBooks Online
Still the easiest starting point, but needs add-ons for fund and grant accounting. Check out ImpactGraph for an easy way to augment QBO with grant management and project visibility, without breaking the bank.
Huge community and active forums for support. Lots of people will be familiar from using it at other organizations
Best price/value, especially when purchased through TechSoup
Price predictability - less likelihood to get a surprise consultant bill
Fiscal Sponsors with >$10M in expenses: Sage Intacct
Nonprofit focus and large user base
Includes complex fiscal sponsor needs out of the box (like fund accounting)
Comparable price to NetSuite, in our experience
Community and a dedicated fiscal sponsor package
.png)
.png)
.png)
