Non- profit organizations (NPO’S) represent a sector whose social, economic and financial importance is increasing all the time.
On the social level, the importance of NPOs steams from the wide variety of services they render to the public. In effect, these services have become one of the fundamental features for modern society encompassing health, education, the arts of culture, consumer protection, and many other sectors, all of which affect the well-being of society as a whole. In fact, their relevance to society has become so widespread that there are very few citizens who have not been involved, at one time or another, with one or more of these NPOs, either as recipients of the services, or as donors, employees, volunteers, and the like.
The economic importance of the non-profit organizations in both Canada and the United States is considerable. NPOs represent a large part of the GNP. Furthermore, the proportion of the contribution made by the NPOs to the GNP has been increasing continuously over the last 30 years. Moreover, NPOs represent a sector in the area of economics where employment opportunities are the most constant, primarily because this sector has very high requirements in terms of manpower.
However, from the standpoint of accountability and financial reporting these NGOs present a considerable challenge. The specific problems associated with these two aspects of the management of NGOs call for urgent action on the part of the accounting profession.
Factors contributing to these problems include the following:
- an absence of criteria by which the benefits rendered by NPO s may be reported and measured
- the wide variation and lack of standardisation in accounting methods used by NPOs
- finally, the lack, in many NPOs, of experienced administrators who are familiar with modern management techniques.
Performance Measurement and Reporting in Non-profit organizations: Is There an Alternative to the traditional Accounting Model?
Thomas H. Beechy, DBA, CPA, professor, Associate Dean Academic, York University
Setting Accounting standards for Non profit Organizations
John Denman, CA, Director, Accounting standards, Canadian Institute of Chartered Accounting
Issues and Challenges Facing the Hospital Sector and their Relation to Performance Reporting and Accountability
Brian McFarlane , FCGA, President and Chief Executive Officer, Doctors Hospital Toronto; Chairman of the Board, Ontario Hospital Association
Performance Measurement, reporting, Accountability and the CICA proposals: A University Perspective
Joseph Lloyd-Jones, CGA, PhD, Assistant vice Rector, University of Ottawa