April 3, 2003 | Read Time: 1 minute
What Counts: Social Accounting for Nonprofits and Cooperatives
by Jack Quarter, Laurie Mook, and Betty Jane Richmond
Standard accounting statements fail to show one of the most important features of nonprofit organizations—the help they provide others, write Jack Quarter, Laurie Mook, and Betty Jane Richmond, of the Ontario Institute for Studies in Education at the University of Toronto.
The authors argue that charities sell themselves short by presenting budgets that show nothing more than revenue and expenses. As a result, they say, nonprofit organizations portray themselves as “users of resources” rather than “creators of value.” They recommend that charities adopt accounting statements that calculate, wherever possible, the value of the services they provide and use that information to educate donors about their efficiency.
The authors also argue that accounting statements should include an estimate of the value of the work volunteers do for charities. They cite a study by the John Hopkins Comparative Nonprofit Sector Project, in Baltimore, showing that volunteers in the United States and 21 other countries contribute the labor equivalent of more than 10.6 million full-time paid workers annually.
The book offers formulas nonprofit organizations can use to calculate the value of their services and of their volunteers’ work. The authors show charity directors how to use that data to write adapted versions of income statements, balance sheets, and value-added statements. The book includes sample accounting tables from several nonprofit organizations.
Publisher: Prentice Hall, Upper Saddle River, N.J. 07458; http://www.prenhall.com; 240 pages; $38.67; I.S.B.N. 0-13-046305-1.
