Inbox: Greater transparency in NFP reporting

Compared to listed companies, twice as many not for profit organisations in New Zealand have asked their stakeholders what they would like to see in their financial statements. This was one of the main findings from recently released survey on not for profit organisations undertaken by chartered accountants and business advisers Grant Thornton New Zealand.
Mark Hucklesby, Grant Thornton’s national technical director, said: “If not for profit organisations fail to provide level of transparency that meets their donor expectations it has the potential to significantly affect future contributions.”
Hucklesby also signalled that there is immense competition in securing the donor dollar so organisations need to succinctly and accurately demonstrate where the funds they have raised are being spent.
He was commenting on the findings of the Grant Thornton 2011 Not for Profit survey, which canvassed 243 organisations.
The majority of respondents – 82 percent – thought that there was growing need for greater transparency given the integrated reporting initiatives that are starting to take hold around the world.
Hucklesby said financial statements and non-financial reporting provided the road map to all results of an organisation.
“We were encouraged to see that 26 percent of respondents surveyed claimed that their organisation had asked its readers the types of information they wished to see reported on. Contrast this with recently completed survey where only 13 percent indicated that they had asked their stakeholders what information they would like to see.”
Hucklesby said the size and complexity of many not for profit organisations was often under-estimated. Market data compiled by Grant Thornton earlier this year indicated that the 100 largest organisations in the not for profit sector, 46 of which are registered charities, now currently account for more than $2.5 billion of turnover each year. That’s an average of $25 million each, which might also explain why twice as many not for profit organisations have asked their stakeholders what they would like to see in contrast to for-profit organisations. M