Blackbaud Financial Edge NXT®

Financial Edge NXT uses a segmented chart of accounts to help maintain the consistency of your data. A segmented chart of accounts associates certain parts of your account string together and prevents associations of those that should not be linked. Learn more about a segmented chart of accounts.

Subfund accounting is a hierarchical structure within your general ledger that allows you to carry the revenue, expense, and equity related to a restricted fund. Valuable for endowments, grants, contracts, and agency funds, subfund accounting makes tracking the granular details of how funds were spent easier so you can ensure compliance and donor intent better than with traditional accounting systems. In addition to improving the clarity of your restricted revenue accounting, subfund records also help track programs and special projects funded by that restricted revenue. Using a record for each subfund allows you to track qualitative data, such as spending guidelines, key dates, and contact information, along with the detailed financial data.

While nonprofit and for-profit organizations share some foundational accounting principles, they diverge significantly in approach and purpose. Nonprofits emphasize accountability, fund segregation, and mission-driven financial transparency, whereas for-profits focus on unified systems and profitability for owners and shareholders.

Nonprofit organizations typically use a fund accounting system, which segregates financial resources into separate funds, each dedicated to specific purposes or programs. This separation allows nonprofits to track the financial performance and accountability of each fund independently. By contrast, for-profit businesses typically use a single accounting system to record all financial transactions, regardless of their purpose. Unlike nonprofit fund accounting, there is usually no need to separate funds for different purposes, as the primary goal of a business is to generate profits for its owners or shareholders.