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MIP Fund Accounting

Not Just Nice to Have, But Absolutely Essential: Grant Management Best Practices

By | Accounting, Accounting Software, MIP Fund Accounting, Nonprofit | No Comments

There are three things you absolutely must do (and do right!) if you manage grant funds. Nonprofits that rely upon grant funding should have best practices and good software in place to help manage grant funds and activities. Without these in place, you run the risk of compliance issues that range from an expensive mistake to losing your nonprofit status. Let’s take a look at the three things you must do to properly manage grant funds and talk about efficient ways to ensure compliance.

Grant Funds Differ from Donations

woman standing in front of table with several information boards behind it. Grant Management

Not all funds are created equal. Although both grant funds and donations may come to your nonprofit, these funds come with different stipulations, and as such, must be treated differently.

Grant funds differ from general donations in several important ways, and those differences shape how nonprofits must manage them. Grants are typically restricted, meaning the money must be spent exactly as the funder specifies: on certain activities, within certain time frames, and under specific rules.

Donations, on the other hand, are often unrestricted, allowing organizations to use them for whatever best supports the mission, from salaries and rent to emergencies or overhead. Because of this, restricted grant dollars require careful tracking, documentation, and reporting, while unrestricted donations offer flexibility.

Grants also come with formal agreements, including contracts, budgets, reporting obligations, compliance requirements, and sometimes audit rights. A typical donation rarely involves more than a thank‑you letter and a tax receipt. This means grants create legal and financial responsibilities, whereas donations primarily create stewardship responsibilities. Grants require detailed reporting—financial statements, outcome data, narrative updates, and proof that spending aligns with the approved budget. Donations simply require acknowledgment and relationship-building through updates or annual summaries.

Finally, grants often prohibit certain expenses, such as food, lobbying, capital purchases, or indirect costs above a set rate, while donations generally allow any mission-supporting use. In short, grant compliance is about staying within strict boundaries, while donations give nonprofits room to maneuver.

Three Grant Fund Management Best Practices

  1. Track every restricted dollar in true fund accounting
  2. Keep one compliance calendar for every funder deadline
  3. Connect grant spending to program outcomes before the report is due

Given these key differences between grants and donations, it comes as no surprise that managing grants comes with a specific set of guidelines, too. These include tracking every restricted dollar in true fund accounting, keeping a compliance calendar, and connecting grant spending to program outcomes. Please note that there are more best practices when it comes to grants – we’re just covering three of them. If you’d like to learn more, AlignMint offers a longer guide with other best practices to note.

1.   Tracking Restricted Dollars in True Fund Accounting

Because grants are restricted dollars, they must be used towards the specific program associated with the grant. You need to know, at all times, exactly how much you’ve spent and how much remains. To do this, you must use true fund accounting. True fund accounting tracks dollars against a specific fund rather than in general categories. Each grant is treated like a mini budget or “fund.”

Why this matters: If you can’t provide an accurate report to funders about how their money was spent, not only are you at risk of losing funding, you are also at grave risk of losing both the funder’s trust and the public’s trust. Grants are awarded based upon specific criteria, and the money must be put towards a stated purpose. True fund accounting enables both your organization and the grantor to see exactly how the funds were used and for what purpose, giving clarity and insight into how well they met their stated purpose.

2. Maintain a Fund Compliance Calendar

Grant compliance often involves multiple time-sensitive tasks. To ensure you maintain compliance, it is vital to keep a calendar of key dates for specific grants.

Every grant has deadlines: reports, site visits, audits, reimbursement requests, renewal dates, data submissions. Instead of tracking these in scattered emails, spreadsheets, or staff memory, you maintain a single shared calendar.

This calendar should include:

  • Due dates
  • Required documents
  • Who is responsible
  • Reminders well before deadlines

Why it matters: You worked hard to secure the grant. A simple slip up, like failing to submit the required documents on time to maintain it, may be all it takes to lose it. A calendar is the simplest way to track everything that matters to maintain grant compliance.

3. Connect Grant Spending to Program Outcomes

This one should be obvious, but you’d be surprised at how often it is overlooked: before spending one penny of a grant, ensure that you’ve mapped specific program outcomes to every dollar you intend to spend.

Nonprofits who skip this step often scramble at the last minute to connect the dots, and that’s a shame. There’s no need for a “funding fire drill” when preplanning and preparation can prepare you for success.

Grants are performance-based. Funders want to see that dollars produced results. By establishing goals before spending grant funds, you’ll be able to regularly compare what you’ve presented, the outcomes you’ve achieved, and what you’ve promised in the grant. And, doing this throughout the grant period (rather than at the last minute) helps you catch any gaps early. For example, spending may be on track, but outcomes are lagging. If you’re tracking it in real time, you’re able to see this gap early and take steps to close it. You can also adjust activities before reporting and produce better reports.

Why this matters: Funders care about impact. When you can clearly show how money turned into outcomes, you strengthen your credibility and future funding chances.

New to True Fund Accounting? Welter Consulting Can Help

To manage grants effectively, organizations need to know exactly how much of each award has been spent and how much remains at any given moment. Because grant dollars are typically restricted for specific purposes, true fund accounting is essential. This means treating each grant as its own mini‑budget rather than lumping all revenue together. Solutions like MIP Fund Accounting, Araize FastFund, and Sage Intacct are designed specifically for nonprofits and provide the structure needed to track restricted dollars accurately, prevent overspending or underspending, and ensure every expense is charged to the correct grant. With this level of clarity, organizations can quickly answer funder questions, stay compliant, and maintain the trust that future funding depends on.

There are many grant management software platforms available that help nonprofits strengthen these best practices, streamline grant tracking, and simplify reporting. If you’d like guidance on choosing the right tools for your organization’s needs, Welter Consulting can help you evaluate options and get you connected with the solutions that fit your structure, size, and goals.

Welter Consulting

Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact us for more information.

Managing the Unpredictability of Nonprofit Budgets: The Right Software Makes a Big Difference

By | Budget, MIP Fund Accounting, Nonprofit | No Comments

Budgeting is tricky. At best, you get close to an accurate forecast. At worst, you’re wildly off. Corporations adjust budgets all the time. So do nonprofits. In fact, nonprofits have a tougher time budgeting because of the uncertainties surrounding their work and their finances.

Budgeting Can Be Tricky

Nonprofits are founded on a cause and a mission. While some do sell products or services, they do not rely solely on sales to support the budget. Most rely on donations, grants, and endowments to continue their mission, and that’s where budgeting gets dicey.

person sitting at desk in front of several computer monitors and pointing at one of them

Look, even companies get their budgets wrong. They can’t predict catastrophic weather conditions that ruin crops; geopolitical events that shut down shipping; or sudden quality issues that threaten their whole supply chain. Nonprofits face different uncertainties. Donors who once flocked to the cause find another cause to support. An economic downturn leaves once-generous givers unable to open their pocketbooks and donate, even if their hearts remain open to the cause. Grants can dry up. Federal funds can cease if Congress halts the money or diverts it elsewhere. Costs escalate.

Given all of these uncertainties, how in the world is your organization expected to budget with any sense of accuracy? Here’s where the right software can make a big difference. With the right software, past patterns can be tracked, analyzed, and used to predict the future. And while no software has an accurate crystal ball, the right platform can help with budgeting as well as analyzing best- and worst-case scenarios.

Plan for the Worst, Hope for the Best: Scenario Planning

You’re probably doing scenario planning all the time—you just don’t know it. It’s when you take an umbrella along “just in case” on your afternoon walk because a few clouds are on the horizon and the weather app predicts a 30% chance of rain. There’s a chance, so you plan for the worst by taking the umbrella along but hope for the best by keeping it rolled up and tucked under your arm.

The same goes for budgeting. Many organizations forget scenario planning when it comes to budgeting and instead believe that the budget they developed for the upcoming year is accurate. It may be, but more likely, unforeseen events will occur that tilt the budget higher (better results from fundraising events) or lower (the rent just increased).

Scenario planning enables you to put into practice both best and worst-case scenarios so that you have a budget ready no matter what happens. This enables you to think ahead, for example, should costs rise and funds dry up. What activities can be cut? How will you continue to pay for essentials such as salaries, rent, and insurance if major grants are discontinued or federal funding ceases? By thinking through each scenario, you have an action plan in place and can course-correct as the year progresses.

The same may hold true for surplus years. Should additional funds flow into the organization, you’ll have a best-case scenario ready to go. Either way, no matter what the future holds for you, you will be ready for it.

Diversify Funding Sources

Many nonprofits rely on federal and state funds, such as grants, to support their programs. Relying solely on these funds is risky. You cannot predict, for example, when such funds will be discontinued or reduced. A new administration or competing interests may result in a grant or funding source being completely shut off, in which case, if you don’t have additional income streams, your organization could face serious difficulties.

Additionally, even if funds are still earmarked for your organization, payment delays could seriously hurt your cash flow. It’s never a good idea to put all your eggs in one basket. Even if you feel that a grant is secure, you cannot be certain of it. Diversifying income streams is a smart idea for all businesses, including nonprofits.

Managing Restricted and Unrestricted Funds Carefully

Restricted funds are earmarked for specific program or activity lines, while unrestricted funds can be used for any expense. Nonprofits must have policies in place governing the use of both types of funding. Unfortunately, unrestricted funds are often in short supply. What then?

Some organizations have written guidelines allowing borrowing from restricted funds. Clear, unambiguous repayment terms must accompany such borrowing; you cannot shuffle money back and forth at will. Another idea is to build fundraising campaigns solely around shoring up your unrestricted funds. Such campaigns emphasize how the organization fulfills its mission so that donors understand why unrestricted funds are needed. And continually educating the public about how your organization manages its unrestricted funds, by being transparent in reporting your organization’s financial reports, is essential to generating goodwill and building trust with donors.

The Right Software Makes Budgeting Easier

So how do organizations run best- and worst-case scenarios and manage restricted and unrestricted funds carefully? With spreadsheets?

You know what we’re going to say—spreadsheets are not the answer. Sure, they’re easy and accessible, but as your organization grows, they become unwieldy. It gets harder and harder to manage them, the chance of mistakes through simple keying errors grows, and it’s almost impossible to get good reports and data visualizations from them.

Instead of spreadsheets, smart nonprofits use nonprofit accounting software to build and manage budgets, run reports, and gain visibility into their financial position to ensure they have a solid foundation.

MIP Fund Accounting offers a great solution for nonprofits seeking a true fund accounting platform. Unlike small-business accounting software, MIP Fund Accounting is designed for nonprofits. It tracks expenses and revenues by program line, helps you build solid reports for your board and constituents, and enables you to track the metrics that matter.

We’ve also found a great solution for nonprofits in Martus, a data reporting platform that works with MIP Fund Accounting to produce outstanding reports. When you need to build trust with donors and constituents, nothing beats good reporting on your activities. Martus with MIP Cloud enables you to build better budgets, generate reports, and improve planning thanks to its seamless integration and robust interface. Separately, MIP and Martus are great platforms. Together? A powerhouse budgeting and reporting solution.

The Future Is Unpredictable. Your Software Doesn’t Have to Be.

The future has always been uncertain. However, you can smooth out some of the uncertainty with the right software. It won’t solve all your budgeting problems, but it will give you the facts you need to make better decisions and build a better future for your organization.

Welter Consulting

Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact us for more information.

The Washington Cares Fund: Making Long Term Care Affordable

By | Accounting, MIP Fund Accounting, Nonprofit | No Comments

Organizations located in Washington state have another benefit they can offer to their employees: the WA Cares fund. This fund, created and managed by the state itself, provides long-term care options to all residents in the state. Residents contribute to the fund while they are working and can access the benefits if they meet certain criteria for long-term care needs.

How Does the WA Cares Fund Work?

In 2019, Governor Inslee signed the LTSS Trust Act into law. Through this act, Washingtonians will begin contributing .58 cents out of every $100 earned into the WA Cares fund starting in 2022. By 2025, those eligible for benefits may tap into them for long term care needs.

Why the WA Cares Fund?

Only about 7.5 million Americans have long-term care insurance, but more than 52% of people age 65 and older are likely to need long-term care at some point in their lives. And, with costs exceeding $300,000 on average over the course of a person’s lifetime, the expenses can be devastating to older Americans.

Washington is now the first state to offer long-term care insurance at an affordable rate for residents who meet eligibility criteria.

What Nonprofit Employers Need to Know

Employers do not need to contribute to the new fund. They do, however, have to track employee hours and wages, and report them to the state. Starting January 1, 2022, you will be required to report employees’ wages and hours worked, as well as collect WA Cares premiums from your employees’ wages. This is the same as you do now for Paid Leave.

You will not need to file a report during any quarters in which your employees have no hours or wages to report.

Are there exemptions?

Employees who wish to be exempt from the WA Cares premium may apply for an exemption. It is their responsibility to apply and to provide you with proof that their exemption was approved. Proof consists of a letter issued by the Employment Security Department (ESD). Once approved, exemptions are permanent, and employees cannot opt back in.

If you are notified that an employee has received approval for an exemption, you must keep a copy of the exemption letter on file and omit collecting the premium from the employee’s wages.

What if my organization offers long-term care insurance?

You may continue offering long-term care insurance to your employees, but it is up to them (not you) whether they should apply for exemption from the WA Cares coverage. There is no organization-wide exemption, so you are still responsible for monitoring wages and hours worked and deducting the appropriate amount of premiums from employees’ wages and reporting them.

You can learn more at: wacaresfund.wa.gov

MIP Fund Accounting Can Help You Track WA Cares Fund Premiums

For nonprofits running MIP Fund Accounting, setting up tracking of the WA Cares premiums is identical to the setup in the system for tracking WA Paid Family and Medical Leave. The only difference is that the setup for WA Cares should deduct .58 cents per every $100 of wages.

Washington is now the first state to offer this important coverage to employees. It’s one more benefit you can use to attract great employees to your organization and to provide your employees with peace of mind for their futures.

Welter Consulting

Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact Welter Consulting at 206-605-3113 for more information.

MIP Fund Accounting 2019.3 Releases on September 19, 2019

By | MIP Fund Accounting | No Comments

Here’s what you need to know about the MIP Fund Accounting update, v2019.3.

This release contains high-quality updates, expanded reporting capabilities, more flexibility and usability and a number of improvements within the Payroll module.
Improvements in the release:
  • Reports:
    • Financial Statements – Statement of Cash Flows – added the default format for the indirect method
    • Financial Statements – Statement of Activities – added option ‘Include Unposted Transactions’ in the report
    • Accounts Payable – Vendor Activity – added filter ‘Zero Activity’ to get vendors with no activity
  • Payroll:
    • Added additional columns for more flexibility in reporting within payroll module
  • Organization:
    • Data Integrity Checks – Removed exclusive access requirement and replaced with a system lock search (disallowed when posting or close-year is in progress)
  • Improved Help experience:
    • Changed Help to be accessible via the web, enabling us to provide documentation updates between releases
  • Enhanced audit trail:
    • Activities – Reconcile Cash Accounts - added logging to the Summary Organization Audit when an existing Reconciliation ID is deleted
  • Quality improvements across MIP
Microsoft Support Changes

Please note the MIP v19.3 workstation installation will take additional time due to Microsoft .Net 4.8 framework being required. If your machine already has .Net 4.8 installed or your IT professional installs .Net 4.8 prior to the MIP workstation installation, please disregard this message.

Windows Versions of MIP released after January 31, 2020 will no longer be supported on Windows 7 SP1.

Support trending topics:

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