by John Covaleski

New York - Accountants with small nonprofit organization clients are getting new software arrows for the business quivers.

Intuit Inc., developer of low-end accounting software giant QuickBooks, plans to launch a nonprofit version of that product in mid-May. Meanwhile, Best Software, developer of the No. 2 low-end accounting software, Peachtree, in April released a kit that adds key nonprofit industry capabilities to its Peachtree Complete 2003 product.

The market of small nonprofit organizations is gigantic.

Some 235,000 filers of 990 tax forms required from public charities reported less than $1 million in annual revenue, and another 500,000 to 560,000 public charities have less than the $25,000 annual revenue required to file a 990, according to Guidestar, a Williamsburg, Va., affiliate of Philanthropic Research Inc.

The number of accountants with small nonprofit clients may be equally staggering: Intuit estimates that 86 percent of all of its QuickBooks customers use an accountant. The American Institute of CPAs reported 936 attendees at its 2002 nonprofit industry conference, although it did not estimate how many of its members provide services to nonprofits.

The new products could make Best and Intuit more important to small nonprofits and their accountants. Even without industry-specific products, the two vendors already command a lion’s share of the nonprofit market: Intuit has some 185,000 nonprofit users across all of its products, while Best last year reported having some 40,000 to 50,000 nonprofits among a base of 1.2 million registered users of Peachtree products. The products are part of Best’s small business division.

Most of the rest of the low-end market is apparently splintered among a handful of vendors with products designed specifically for small nonprofits, such as Executive Data Systems of Marietta, Ga., and Araize Inc. of Cary, N.C.

Nonprofit industry developers that primarily target larger nonprofits also have fairly large numbers of smaller customers. For example, Charleston, S.C.- based Blackbaud, developer of fund accounting and fundraising software products, last year said that about 15 to 20 percent of its clients have budgets of less than $1 million.

While both products are too new to have been subjected to side-by-side reviews, Intuit’s nonprofit version has significantly more nonprofit features than the Peachtree kit.

They include an industry-specific chart of accounts with the ability to track assets in compliance with the Governmental Accounting Standards Board; the ability to categorize financial information required for 990 tax reporting; grant and donation management; the ability to customize letters to donors; and budget tracking for projects such as fundraising events.

The product, available for QuickBooks’ Premier 2003 and Enterprise product lines, also eliminates the need to re-key data, as well as several other inefficiencies that nonprofits experience on generic QuickBooks editions. “The idea has been to find pain points that our customers are experiencing and to eliminate that pain,” said QuickBooks new products/vertical solutions general manager Peter Karpas.

Peachtree’s nonprofit kit enables Peachtree Complete users to accomplish key tasks germane to the nonprofit industry, such as tracking donations and budgeting. It features what Best calls an “industry-specific” chart of accounts and the ability to customize financial statements to meet nonprofit industry requirements.

The kit also includes a manual to help users better utilize existing Peachtree features that apply to nonprofits, such as the product’s built-in Crystal Reports report writer.

Best is also expected to release a full nonprofit edition of Peachtree later this year. However, the company has not officially announced plans to do so.

The company has, however, announced plans for manufacturing and distribution versions of Peachtree. It also launched Peachtree kits for those verticals.

Peachtree’s nonprofit kit bundled with Peachtree Complete 2003 costs $499.95 for a single-user version and $899.95 for multiple-users. The unbundled kit costs $200.

Prices for new purchases of Intuit’s nonprofit versions are $499.95 for one-user editions of Premier, $1,499.95 for five-user editions of Premier, and $3,500 for a 10-user license of Enterprise with a year of technical support. Upgrades at reduced prices are available for owners of generic versions of Premier 2003 and Enterprise.

For both vendors, the low-end moves culminate industry strategies begun when they each bought developers of higher-end nonprofit-specific software. Intuit acquired the former American Fundware last year and made it the cornerstone of its new public sector group, while Best in 2001 acquired the former Micro Information Products and has made it the base of its nonprofit and government division.

Best will keep the nonprofit versions of Peachtree in its small business division. The nonprofit versions of QuickBooks will apparently remain in the QuickBooks group, rather than migrate over to Intuit’s public sector group.

Best expects that the nonprofit versions of Peachtree will serve as a base for nonprofits to migrate to MIP’s product, including an “Intro” product it released in 2001 specifically for smaller nonprofits.

That product is more robust and has more capabilities than any Peachtree versions, but it is also priced much higher, at a base of $1,295.

For Intuit, the nonprofit products are part of a wider vertical industry strategy for QuickBooks. Intuit, which already has construction and accounting industry versions of QuickBooks, will launch a health care industry version at the same time it launches the nonprofit edition.

Intuit officials said that they plan to add more vertical editions.

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access