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C
ckzraymond
January 14, 2026
Question

Non-profit restricted funds - best way to handle

  • January 14, 2026
  • 1 reply
  • 80 views

I recently created my first non-profit.  I watched a lot of videos at the before setting it up and decided to use classes for my three main reporting buckets for the 990: Fundraising, Programs, and Administration.  This is working fine; however, I'm not using them for my deposits because those categories only make sense for expenses, but now I'm not sure that is correct.

 

The other issue is restricted funds, which I only have one of them so far.  After my research I planned to use Projects in QB Online to track restricted funds, but am now second guessing that because I read it's best to use classes.  The other option for restricted funds (to track both income and expenses) is to create subaccounts to the bank account for each one.  Which of these options would be the easiest/cleanest for someone just starting out to use going forward?  I don't expect to have too many restricted funds, but of course you never know.  

 

Also, if you believe I should use classes for restricted funds, I guess it's not too late to change that.  However, I understand there is a limit of only 40 classes in QB Online Plus and I didn't want to reach the limit and have problems in the future.  

Thank you for any insight on these issues!

    1 reply

    W
    wesleymcole
    New Member
    August 8, 2026

    You’re right to hesitate before using Classes for individual restricted funds. Since you’re already using Classes for functional reporting across Programs, Administration, and Fundraising, reusing them for grants can make reporting difficult and eventually run into class limits.

    A common approach is to keep Classes for functional expenses and use Projects, Customers/sub-customers, or Locations for individual grants. Separate bank accounts usually aren’t necessary unless the funds must actually be held separately.

    I ran into this same reporting gap while working with nonprofits, so I built GrantLink. It connects to QuickBooks Online and lets each grant use the QBO structure that already fits the organization, including Classes, Customers, Projects, or Locations. It then tracks grant income, expenses, budgets, restrictions, and remaining balances without requiring you to reorganize QuickBooks. It is read-only by default.

    Full disclosure, I’m the founder, but this is exactly the problem GrantLink was designed to solve: https://grantlink.app/

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