NOT-FOR-PROFIT organisations have been told they should improve reporting standards to meet the needs of donors and funding providers.
A review by the Institute of Chartered Accountants in Australia concluded that the not-for-profit sector needed to adopt a reporting framework that better reflected its activities.
“Our detailed review of 22 reports highlights that NFPs can use their annual and financial reports to better effect,” ICAA spokesperson Stewart Leslie said.
“As it becomes more competitive for the donor and funding dollar, NFPs need to tell their story more effectively.”
The ICAA has drawn up a checklist to help NFPs achieve more informative and transparent reporting.
“Reports need to explain what the NFP is trying to do, how it is going about it, whether it has achieved its objectives during the year and its plans for the future.”
The checklist proposed that NFPs include an outline of their objectives rather than simply including their mission statement.
It also proposed a greater use of statistical information, including key performance indicators to measure the effectiveness of their activities.
Specific KPIs could include the cost of fundraising as a percentage of income, the cost of services provided as a percentage of total costs, the number of staff employed and the number of hours contributed by volunteers.
Mr Leslie said NFPs should also provide more information on their organisational structure and decision-making processes.
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