Expense Management for Nonprofits 2026: Grant Tracking

Why expense management is harder for nonprofits than any other org type

Ramp

Expensify

Concur

Every for-profit company tracks expenses along two dimensions: who spent the money and which cost center it came from. That is simple enough that almost any software handles it. Nonprofits track expenses along three simultaneous dimensions at once: which funding source paid for it (restricted grant, unrestricted operating, endowment draw), which program it served for IRS Form 990 functional categorization, and who has the legal authority to approve it under board governance rules. Generic expense tools are not designed for this. They handle the first dimension reasonably well and largely ignore the other two.

This is not a minor inconvenience. It is a compliance liability. When a grant-funded expense gets coded to the wrong funding source, the consequence is not an accounting adjustment. The grantmaker can demand repayment of the misallocated amount, even if the underlying expense was legitimate. Federal grantors can trigger an audit under 2 CFR Part 200 (Uniform Guidance). Some foundations will not renew funding to an organization that has demonstrated weak internal controls. The stakes are categorically different from getting a cost center wrong on a corporate travel report.

There is also the board reimbursement problem, which most expense management listicles skip entirely. Board members have fiduciary duties that create a legal conflict when they submit expense reimbursements. A board member cannot vote to approve their own reimbursement. The authorizing resolution must appear in board minutes with conflict-of-interest disclosures documented. Software that routes a board member's reimbursement through a standard employee approval chain creates IRS private inurement exposure, particularly for organizations with Form 990 public charity status. Generic tools have no mechanism for this.

And then there are volunteers. Nonprofits routinely reimburse volunteers for mileage, supplies, and out-of-pocket costs. Volunteers have no employee record, no payroll ID, and no W-2 relationship with the organization. Reimbursing them through standard expense software usually requires creating a pseudo-employee account, which triggers payroll implications, or writing paper checks with no audit trail. Neither approach satisfies IRS accountable plan rules for tax-free reimbursement status.

The form 990 problem: why year-end reclassification is costing you days

IRS Form 990 Part IX requires nonprofits to report every expense line across three functional categories: program services (the work you do), management and general (overhead), and fundraising. The split is not optional and it is not a rounding exercise. Auditors, major donors, charity evaluators like Charity Navigator, and state regulators all scrutinize the ratio. A high management and general percentage relative to program services raises flags.

The problem is that most nonprofits are capturing expense data in tools that have no concept of these categories. At year-end, the finance director exports every transaction from Expensify or a generic card program, then manually assigns each line to one of the three 990 buckets in a spreadsheet. For an organization processing 200 or more expense reports per year, this is a multi-day project. It is also error-prone in ways that matter, because functional expense allocation is a known audit focus area.

The right solution is to map every expense category to its 990 functional category at the point of setup, not at year-end. When a staff member submits a mileage reimbursement for a site visit on a specific grant, the system should simultaneously record the grant code (fund dimension), the program the visit served (990 dimension), and route it to the correct approver (governance dimension). Aplos and Sage Intacct Nonprofit both do this natively. Ramp can be configured to approximate it with custom fields. Expensify cannot do it without a downstream manual process.

FASB ASU 2016-14 made this more complicated in 2018 by requiring nonprofits to report net assets in two classes rather than three: net assets with donor restrictions and net assets without donor restrictions. This means your expense tracking system must be able to tag every transaction against a specific restriction, not just a fund number, and confirm that spending is consistent with the donor's stated purpose. This is the restricted versus unrestricted separation that for-profit-designed tools have no native support for.

Top tools ranked: what each one actually gets right and wrong

Aplos is the strongest overall fit for small to mid-sized nonprofits, particularly those that are grant-dependent. It was built from the ground up for fund accounting, meaning restricted and unrestricted fund separation is not a workaround using class codes, it is native to the data model. Expenses carry fund tags from submission through to the general ledger. The 990 functional expense mapping is built into the chart of accounts setup. Pricing starts around $79 per month for the core accounting plan and scales based on features. The honest weakness is the expense submission interface. It is functional but it feels older than Ramp or Expensify, and mobile capture is less polished. For a grant-heavy organization where compliance accuracy matters more than app aesthetics, that trade-off is worth making.

Ramp has made a genuine push into nonprofit positioning over the last two years. Its card-based spend controls are genuinely useful: you can restrict a card to specific merchant categories, set per-transaction limits, and require a receipt plus a fund code at the point of swipe rather than hoping the cardholder remembers to add it later. Ramp integrates with QuickBooks Online, Sage Intacct, and NetSuite, and you can create custom fields for grant codes and 990 categories. The nonprofit pricing is $0 per month for the core platform (they make money on interchange), which matters for budget-constrained organizations. The gaps: Ramp has no native board-member conflict-of-interest routing, no volunteer reimbursement payee type, and its 990 functional mapping depends on how carefully you configure custom fields rather than being built into the product logic.

Expensify works well for nonprofits with simple operations, unrestricted budgets, and fewer than 10 staff submitting expenses. For a small advocacy organization or a local arts group that receives mostly unrestricted operating grants, Expensify's receipt scanning, approval workflows, and direct deposit reimbursement are genuinely good. The problem starts when grant complexity increases. Expensify has no native fund-level or grant-level coding at the point of capture. All restricted fund tracking must happen in the downstream accounting system after the fact. Auditors flag this as a control gap because there is no point-in-time verification that the person submitting the expense knew which grant they were charging. Pricing starts at $5 per user per month on the Collect plan.

QuickBooks Online Nonprofit Edition with a class-per-grant structure is the most common workaround among small nonprofit finance directors. The approach is to assign each active grant a QB class code, then require that every expense entry include the class. It allows fund tracking and supports 990 reporting through QB's nonprofit reports. The problem is that QuickBooks classes are a reporting tool, not an enforcement mechanism. Nothing in QuickBooks prevents someone from submitting an expense with the wrong class or no class. Above eight concurrent grants, the class list becomes unwieldy to manage and even harder to explain to program staff. Pricing for QuickBooks Online Plus (which supports class tracking) starts around $90 per month.

Sage Intacct Nonprofit is the enterprise standard. It has native fund accounting, native 990 schedule generation, multi-dimensional transaction coding (you can tag a single transaction with a grant, a program, a location, and a 990 functional category simultaneously), and the most complete federal grant compliance reporting available in a mid-market accounting platform. Paired with Ramp for card-based spend, it closes the point-of-capture gap that accounting-only tools leave open. The honest barrier is cost. Sage Intacct is typically $400 to $800 per month or more depending on user count and modules, and implementation requires a certified partner. For organizations above $5M in annual budget with complex federal grants, that cost is justified. For anyone smaller, it is not.

Concur and Certify both show up in nonprofit finance director discussions but neither has nonprofit-specific features worth the price premium. They are enterprise corporate travel and expense tools that happen to be used by some large hospital systems and university foundations. If your organization is already deep in an SAP ecosystem, Concur makes sense. Otherwise, there are better-fit options at lower cost.

What generic tools miss: the two scenarios most likely to trigger IRS scrutiny

Board member reimbursements are the highest-risk scenario in nonprofit expense management, and almost no expense software handles them correctly. The IRS private inurement prohibition means that no part of a nonprofit's net earnings can inure to the benefit of any insider, including board members. Reimbursements are exempt from this rule only when they follow a documented accountable plan: the expense must have a valid business purpose, must be substantiated with receipts, and must be approved by a disinterested party who is not the board member being reimbursed. The approval must be documented in board minutes.

Generic expense tools route reimbursements through a manager hierarchy. Board members typically sit at or near the top of that hierarchy. In tools like Expensify or Ramp configured for standard corporate use, there is no mechanism to route a board member's reimbursement to a different board member for approval, document the conflict-of-interest waiver, or generate a minutes-ready record of the disinterested vote. Organizations that use these tools for board reimbursements are creating a documentation gap that an IRS examiner will notice during a 990 review.

Volunteer reimbursements are the second high-risk scenario. Under IRS rules, reimbursements to volunteers for out-of-pocket expenses are tax-free to the volunteer only if the organization has an accountable plan in place and the volunteer provides adequate substantiation. Without a formal submission and approval workflow, organizations often pay volunteers from petty cash or write checks with no documentation, which can convert a tax-free reimbursement into taxable compensation. If the volunteer is also a contractor or vendor, the documentation requirements multiply. None of the generic expense tools have a volunteer payee type that creates the right submission and documentation workflow without requiring an employee record.

Multi-grant cost allocation is a third scenario worth flagging. When a single staff trip or supply purchase must be split across three active grants with different allowable cost rules and different reporting deadlines, generic tools either force a single fund code or require a manual journal entry after the fact. Federal grant audits under Uniform Guidance (2 CFR 200) treat improper cost allocation as a finding. Multiple findings across audits can affect your ability to receive future federal awards. The ability to split a single expense line across multiple grants at point of submission, with each grant line carrying its own allowable cost validation, is a feature that only purpose-built nonprofit accounting platforms provide natively.

Red flags to watch for when evaluating any expense tool

No grant-level tagging at point of capture. If the tool requires staff to submit expenses first and then tag them to a grant in the accounting system later, you have a control gap. The person who knows why an expense was incurred and which grant it serves is the person submitting the report. Requiring a grant code at submission is not burdensome if the tool makes it easy. It is burdensome only when it is an afterthought.

No separation between approval roles and payee roles. A tool that lets any admin approve any expense, including their own, is not appropriate for a board-governed organization. Ask specifically during demos: can we prevent a user from approving their own submissions? Can we route specific approvals to a designated reviewer rather than the submitter's manager? If the answer requires a workaround, that is a red flag.

990 reporting requires a spreadsheet export. If the vendor's answer to 'how do we prepare our functional expense schedule for Form 990 Part IX' involves any manual step outside the tool, the tool is not reducing your compliance risk. It is just moving the risk downstream.

Volunteer submissions require an employee record. Ask directly. If the vendor says you need to create an employee account for volunteers, or that volunteer reimbursements need to go through payroll, the tool was not designed for nonprofits regardless of what the marketing says.

No audit trail on approval overrides. The IRS does not care that your process was right in theory. They care what the records show. Any expense tool you use should log every approval action, every edit, and every override with a timestamp and user ID that cannot be altered after the fact. This is table stakes for any organization subject to a single audit under Uniform Guidance.

Recommendations by organization size and complexity

Small nonprofits under $500K annual budget with mostly unrestricted funding: Expensify on the Collect plan at $5 per user per month is a reasonable starting point. Use QuickBooks Online Nonprofit Edition as your accounting system with one class per major program area. Keep grant tracking in a separate spreadsheet until your grant portfolio grows. The manual reconciliation burden is manageable when grant complexity is low.

Mid-sized nonprofits between $500K and $5M with two to eight active grants: Aplos is the right call. The native fund accounting and 990 functional mapping reduce your audit risk more than any UX advantage from Ramp or Expensify. Add Ramp corporate cards if you have significant card-based spend and configure Ramp's custom fields to pass grant codes to Aplos on import. Budget roughly $150 to $250 per month for the combination. Build a separate board reimbursement policy document that routes board member receipts to the board treasurer or a designated disinterested board member for approval outside the software, and document that process in your board minutes.

Larger nonprofits above $5M with federal grants or complex multi-grant environments: Sage Intacct Nonprofit is the right long-term accounting platform. Pair it with Ramp for corporate cards, configure Ramp to require grant codes at swipe, and use Sage Intacct's expense management module or Concur for reimbursements if you need enterprise-level travel policy enforcement. Budget for a certified Sage Intacct implementation partner. The implementation cost is real but the reduction in audit risk and year-end close time pays back within one fiscal year at this scale.

For every size: document your board reimbursement policy as a standalone board resolution before any software evaluation. Make the disinterested-approver requirement explicit in writing and reference it in your conflict-of-interest policy. Whatever software you choose, the board reimbursement workflow will require a policy layer on top of the technology. No software currently on the market handles this correctly out of the box. The organizations that get this right treat it as a process design problem first and a software configuration problem second.

One final point on switching costs. Nonprofit chart of accounts and grant code structures are harder to migrate than corporate cost centers because they are tied to donor agreements, grant award documents, and historical 990 filings. Before committing to any platform, ask the vendor specifically how they handle migration of historical grant data and whether your fund structure from the old system maps cleanly to their data model. A failed migration mid-grant-year is a compliance event, not just an IT problem.

See our best expense management software roundup for how these tools stack up outside the nonprofit-specific requirements covered here.

Frequently asked questions

What does Aplos cost, and what does it actually solve? Aplos starts around $79/month for the Lite plan, with Core at $129/month and custom pricing above that; organizations with $250K+ in annual revenue often land in customized plans starting near $229/month. It rates 4.5/5 on Capterra from 187 reviews. The core value is native fund accounting and built-in Form 990 functional-expense reports, so restricted and unrestricted funds are separated at the data level rather than bolted on with class codes [Capterra, verified 2026-07-20].

Is Ramp free for nonprofits? The core Ramp platform is $0/month, it earns revenue from card interchange rather than subscriptions, which matters for budget-constrained organizations. The catch is Ramp requires a $25,000 minimum balance in a US business checking account, a real barrier for smaller nonprofits [Ramp.com, 2025].

Does Ramp integrate with nonprofit accounting software? Yes. Ramp has a direct integration with Aplos (available to Aplos customers on a Core or Advanced subscription) that syncs approved expense transactions with fund or program tags attached, and also connects to QuickBooks Online, Sage Intacct, and NetSuite [Aplos Academy, Ramp blog, 2025].

Can Expensify handle grant-level expense tracking? Not natively. Expensify (Collect plan starts at $5/user/month) works well for nonprofits with simple, mostly unrestricted operations and fewer than 10 staff submitting expenses. Once grant complexity increases, all fund-level coding has to happen downstream in the accounting system, which auditors flag as a control gap because there is no point-in-time verification of which grant an expense was meant to charge.

What is the biggest expense-management mistake nonprofits make? Routing board member reimbursements through a standard employee approval hierarchy. IRS private inurement rules require a disinterested board member, not the person's usual manager, to approve their reimbursement, with the approval documented in board minutes. Almost no off-the-shelf expense tool has a workflow for this; it has to be built as a policy layer on top of whatever software you choose.

What should a mid-sized nonprofit budget for expense software? For an organization between $500K and $5M with two to eight active grants, a realistic combination is Aplos plus Ramp corporate cards, budgeted at roughly $150 to $250 per month total. Organizations above $5M with federal grants typically need Sage Intacct Nonprofit, which runs $400 to $800+ per month plus certified-partner implementation costs. Many hospitals and clinics are themselves nonprofit entities, our expense management for healthcare organizations guide covers the additional compliance layer that comes with that sector.

Is Ramp actually free for a 501(c)(3)? Yes, Ramp offers its full platform, cards, expense capture, bill pay, and reporting, free to verified 501(c)(3) organizations, earning revenue only from card interchange. The catch is the same $25,000 minimum balance requirement that applies to Ramp's for-profit customers, and the workflow assumes corporate-card spend rather than out-of-pocket reimbursement, which is less natural for volunteer-heavy organizations.

Is there a tool built specifically for grant-level tagging rather than fund accounting generally? Fyle, at $6.99/user/month, has strong project and cost-center tagging aimed at exactly this: custom fields for grant names, program areas, and funding sources applied at submission, syncing into QuickBooks Online, Xero, or Sage Intacct with project and class coding intact. It is worth a look for organizations that want grant-level tagging without adopting a full fund-accounting platform like Aplos or Sage Intacct.

What is the simplest workaround for volunteer reimbursements? Expensify allows non-employees to submit expenses by email without a full account: the volunteer emails receipts to [email protected] with a note on business purpose, and the expense appears in the account for approval and payment. It is not elegant, but it avoids creating a payroll-linked pseudo-employee record for occasional volunteer reimbursements. Remember that reimbursements only stay tax-free to the volunteer if they are made within 60 days of the expense (with any excess advance returned within 120 days) under IRS accountable plan rules.