One thing many nonprofits struggle with is tracking restricted vs. unrestricted funds correctly. When donations come in with specific donor instructions like “for the youth program” or “for equipment only” those dollars must be tracked separately. Mismanaging this doesn’t just create bookkeeping headaches; it can affect audits, grant eligibility, and a nonprofit’s public trust. Yet it’s one of the most common areas where organizations make mistakes without realizing it.
In your experience, which part of nonprofit financial tracking do you think gets overlooked the most?