Trust in our sector and civil society space are under attack. So how, as operations staff, can we best defend our organizations and our sector? By doing what we do best – ensuring we do high quality work and then reporting on that work with full transparency and accountability to all our stakeholders. This requires standards.
And yet unlike the private and public sectors, the non-profit sector has no international accounting standards. Instead the trillions of dollars that get spent by our sector get reported on in all sorts of ways in different countries, creating complexity, confusion, duplication waste and sometimes fraud in international grant-making. This undermines transparency, accountability and trust in our sector.
We, as a global community of non-profit professionals, have been working with many partners for nearly 10 years to make the case for international accounting standards in the non-profit sector. We started this campaign with a call to Stand up for Standards in the Charity Finance Yearbook of 2011.
This led in 2012 to a meeting with representatives of the International Accounting Standards Board (IASB) and the International Public Sector Accounting Standards Board (IPSASB), together with senior members of three leading UK professional accounting bodies and the Charity Commission.
In 2014, CAAB, which is a joint platform of the UK and Ireland’s accounting bodies, funded independent research into the need for international accounting standards for not for profit organisations (NPOs). This found that 72% of 605 respondents involved in NPO reporting in 179 countries agreed that, “It would be useful to have international standards for NPO accounting.”
This research persuaded the IASB to consider extending its remit to cover non-profit accounting in 2015. However, despite receiving more responses than ever before to a public consultation on this matter, the IASB decided against this at that time. Crucially, the IASB’s Trustees did state that they support the need for transparent financial reporting requirements for nonprofit organizations. They therefore decided that the IASB should be involved in any initiatives or working groups regarding financial reporting standards for the NFP sector and contribute as necessary. We’d like to remember the 162 non-profit organizations that supported our campaign back in 2015, many of who wrote letters to the IASB, and therefore helped secure this commitment by the IASB. We’ve included the names of all those organizations at the end of this article to say thank you and acknowledge their vital support. We hope these NGOs will now engage in developing the new guidance.
We are extremely grateful for the leadership shown by CIPFA in working with the International Forum of Accounting Standard Setters (IFASS) to create a non-profit working group to take on this opportunity provided by the IASB. This led, in 2017, to the launch of an international not-for-profit reporting platform on CIPFA’s website.
Since 2017, Humentum and CIPFA have been working to attract support from the funding community for the IFASS non-profit working group to develop much more robust and rigorous guidance on financial reporting for the non-profit sector, which requires extensive engagement and consensus building between accounting standard setters from many countries and other stakeholders especially funders, governments, regulators and non-profit organisations.
We are therefore thrilled that two of the world’s largest funders of the non-profit sector globally have agreed to be founding funders for this initiative: The Ford Foundation and the Open Society Foundations. Humentum has been working with these foundations for some years to help them grapple with the complexity, variability and sometimes questionable quality of their grantees’ audited financial statements. Ford and OSF are leading by example, backing an initiative that will solve a key pain point in a way that will benefit all international grant-makers. You can hear from John Bernstein, COO at Ford Foundation, about why they are backing the initiative.
Ford and OSF are the founding funders for this initiative, but we will need the support of many more funders if we are to achieve our ambition of developing the guidance needed over the next 5 years. If you are a funder who might be interested in making a contribution to this project, or can introduce us to a funder that might, please contact our Project Director Samantha Musoke, at sam.musoke@humentum.org, or contact me on Linked-in.
We were so excited to launch this project in the heart of our Humentum community at our conference attended by over 1000 non-profit professionals in Washington DC on July 11, 2019. The press release is available here.
The future guidance that will be developed over the next 5 years will only be as good as the engagement we get from all key stakeholders across the world in its development. We are working to ensure this will be as inclusive as possible and will be organizing events and roundtables in many countries over the course of the project. We also need to recruit members of Practitioner Working groups. To find out more and register to engage and receive updates please visit our project page NOW! Be part of our journey to a more transparent, accountable and trusted sector. Our sector needs you!
We’d like to acknowledge and thank all the following organizations that joined our campaign in 2015 to secure support for developing the world’s first ever international financial reporting guidance for the non-profit sector:
ACCESS Development services
ADRA China
ADRA Pakistan
Adventist Development and Relief Agency Timor-Leste (ADRA Timor-Leste)
Adventist Development Relief Agency Sri Lanka (ADRA SriLanka)
AECP Niger
AFOH-UNOPS
Agency Coordinating Body for Afghan Relief and Development (ACBAR)
Alhammad Educational Society Sargodha Pakistan
ALIVE Medical Services
Alliance for Development Solutions
Anglican Aids Programme
ANMA-KENYA
ARAMA RWANDA
ASMEDI asbl
Association of Evangelicals of Liberia (AEL)
Assocation pour le developpement et la solidarite islamique
Asylum Access, Tanzania
Baptist Aid-BBCF
Bareebo
Bawinanga Aboriginal Corporation
Blue Diamond Society
BNWLA-Bangladesh National Women Lawyers Association
Breakthrough
British Council
Broederlijk Delen vzw (Belgium)
Caritas Banmaw
CENTRE D’APPUI PEDAGOGIQUE
Centre for Environment, Human Rights and Development
Center for Justice and Peace Studies (CJPS)
Charity Centre for Children and Youth Development
Chibuzor Human Resources Development Organization
Childfund Sri Lanka
Child Soldiers International
Child’s I Foundation
CHS Alliance
Coalition of Women Living with HIV/Aids (Cowla)
Community Development Agency
Compassion International
Concern Worldwide
Connect Network
CONSEIL NATIONAL DES ONG DE DEVELOPPEMENT DE LA RDC
Dambari Wildlife Trust
Deepti Bhuban
Development Workshop
DirectAid
Disabled Peoples Oganisations Denmark – DPOD
Elison Decision Support Services
Equal Education Fund
EUCORD
FECCLAHA
Felix Foundation
Fern
FNV
Forest Peoples Programme
Friends-International
Fundacion Manos de Amor
GF
Ghana Developing Communities Association
Global Aid Hand
Global Mass Community (Welfare Organization)
Global Media Foundation
GOD’S LOVE HOME
Grenoble School of Management
GROUPE D’APPUI AUX EXPLOITANTS DES RESSOURCES NATURELLES – RDC
HELPAGE INDIA
HelpAge International
HELVETAS Swiss Intercooperation Ethiopia
Hope Trust
Human Expectation
Human Resource and Social Information Centre (HURESIC)
HURESIC (Human Resource and Social Information Centre)
INITIATIVE FOR EDUCATION AND DEVELOPMENT
Integrated Regional Support Program (IRSP)
International Rescue Committee
InsideNGO
Jewel Health and Development Initiative (JEHDI- Nigeria)
Karopa Intergrated CBO
Kukumbi Mozambique
LIVELIHOOD DEVELOPMENT FOR HUMAN RIGHTS PROMOTION- SIERRA LEONE
Lungujja Community Health Caring Organisation
Manion Daniels
Marie Stopes Sierra Leone
Media Monitoring Project Zimbabwe
MEK Community Development
MHA MacIntyre Hudson
Molly’s Network
MSF Southern Africa
MU-JHU Care Ltd
Myanmar Red Cross Society
Nascent Solutions Inc.
National Election Observation Committee
National Service Learning Institute – Liberia
Near East Foundation
Ngo-Federatie
NhakaAfrikan Worldview Trust
OCAM National organization South Sudan
Open Society Foundations
Organization for Non-violence and Development
Oriental Women Organization
Oxfam Novib
Pacific Theological College
Pancaran Anugerah
Pastoralist Development Network of Kenya (PDNK)
Patient Helping Fund – Sudan
Pentecostal Mission Unlimited-PMU Liberia
Plan International
Prison Fellowship Zimbabwe
Queen Mary University of London
Queens World Network
RADDHO
Renew’N’Able Malawi
Rescue Heart Africa Foundation
Research Triangle Institue – International, LEAD Nigeria Project
RETRAK
Restless Development
Right To Play, Ghana
Rinda Ubuzima
RUJEWA INTEGRATED EFFORTS TO FIGHT POVERTY (RIEFP)
Save the Children International
SEARCH – Liberia
Send a Cow
Share An Opportunity Uganda
Siiqqee Women’s Development Association (SWDA)
SIL International
Social Welfare Advancement Committee (SWACO)
Somali Humanitarian and Development Action (SOHDA)
SOS Children’s Villages Nigeria
SOS Sahel Ethiopia
South Sudan Action Network On Small Arms (SSANSA)
S.T.R.A.W. Inc. Center for Young Women
Street child of Sierra Leone
Substance Abuse Research Association (SARA)
Sudan Open Learning Organization
TAYA
The Asia Foundation
The Children Support Organisation Mpigi
The Foundation for Civil Society
The Gardener Africa Foundation
THETA UGANDA
Transparency International Cambodia
Trócaire
United Mission to Nepal
VisAbility Limited
Vision Welfare Group
Vivekananda International Health Centre
Volta Educational Renaissance Foundation (VEReF)
Vredeseilanden VZW
War Child
WaterAid
Welthungerhilfe
Women Acting Together for Change (WATCH)
Women Against Violence and Exploitation in Society
Women LEAD
Women’s network for environmental sustainability
World Vision International
WSM Wereldsolidariteit -Solidarité Mondiale (Belgium)
WWF International
Youth Business International
Youth Empowernment Strategies In Developing Opportunities (YES I DO)
YUWA
ZOA