Funds and Programs

Funds and programs are how NP Ledger organizes your money by purpose. Funds track where money can be spent. Programs track what mission area it supports. Together, they give your board, donors, and auditors a clear picture of how resources are allocated.

Think of funds like labeled envelopes for your nonprofit's money:

• General Fund — money with no restrictions. You can spend it on anything the organization needs.
• Restricted Fund — money a donor gave for a specific purpose (like "youth programs" or "building renovation"). You must spend it on that purpose. Restrictions can be by purpose, by time, or both.
• Board-Designated Fund — money the board set aside for something specific. It's technically unrestricted, but the board has decided to reserve it.
• In-Kind Contributions Fund — tracks non-cash donations like donated supplies, equipment, or professional services.
• Pass-Through Fund — money you collect on behalf of another organization and forward to them. This is recorded as a liability, not revenue, because the money isn't yours.

Programs are your mission areas — the different things your nonprofit does. For example, a youth services organization might have programs called "After School Tutoring," "Summer Camp," and "Family Support."

Projects live inside programs and represent specific initiatives or grants within a program area. You manage both from the Programs page in the sidebar under Accounting.

Funds and programs affect how your transactions are recorded and reported:

• Every transaction in NP Ledger is tagged to a fund. This determines which "envelope" the money comes from or goes to.
• Every expense can be tagged to a program and optionally a project. This determines which mission area bears the cost.
• Reports break down revenue and expenses by fund and program. Your Activities report shows restricted vs. unrestricted totals. Your Program Report shows spending by mission area.
• 990 Tax Filing Part III pulls from your program data to describe what your organization accomplished.
• Donation routing rules use funds to automatically assign incoming donations to the right category.

A community food bank might set up:

Funds: - General Fund (unrestricted) — for operating expenses like rent and utilities - Food Distribution Fund (restricted, purpose) — donor-restricted money for purchasing food - Building Fund (restricted, purpose) — money for the planned kitchen renovation

Programs: - Food Distribution — the core mission of providing meals - Community Education — nutrition workshops and cooking classes - Administration — overhead and management

When a $1,000 donation comes in designated for food distribution, it goes to the Food Distribution Fund. When the food bank buys groceries for $500, that expense is tagged to the Food Distribution program and paid from the Food Distribution Fund.

• Setting up NP Ledger for the first time — you start with one General Fund and one default program. Add more as your needs grow.
• A donor restricts a gift — create a restricted fund with a name that describes the restriction.
• Your board designates reserves — create a board-designated fund to track internally earmarked money.
• You apply for a grant — create a project under the relevant program to track grant spending against the award amount.
• Preparing for an audit or Form 990 — accurate fund and program tagging is essential for compliance reporting.

Common Confusion

"Do I need multiple funds?" Not right away. Many small nonprofits operate with just a General Fund for months or even years. Add restricted funds only when donors designate gifts for specific purposes. Start simple.

"What's the difference between a fund and a program?" A fund tracks the source and restrictions on money. A program tracks the mission area where money is spent. The same dollar can come from the General Fund and be spent on the Food Distribution program.

Default Fund on Projects

When you create or edit a project, the form has an optional Default Fund field. If most transactions for that project will hit the same fund (for example, all "Capital Campaign" project entries belong in the Building Fund), set the default once on the project. From then on, picking the project on a transaction-entry form auto-fills the Fund field. The default never overrides a value you've already typed — if you change the fund manually, your pick is preserved even if you re-pick the project.

Leave the field blank if a project's transactions legitimately span multiple funds.

Accountant note: Funds map to the net asset classes required by ASU 2016-14 (FASB ASC 958): with donor restrictions and without donor restrictions. Board-designated funds are technically "without donor restrictions" but are separately disclosed. Programs map to functional expense classifications required by ASC 958-720-45 for the Statement of Functional Expenses.