Social accounting for nonprofits: Two models

After giving an overview of the development of social accounting, this article presents two models of social accounting for nonprofits: the community social return on investment model and the expanded value‐added statement. The discussion focuses on the process for establishing a comparative market value for nonmarket social outputs. The authors discuss these models and the comparative market value in relation to social accounting, an academic field that has evolved as part of a critique of financial accounting, especially its failure to analyze the impact of the organization on society and the natural environment. For the most part, scholars have not related social accounting to nonprofits. This article attempts to draw nonprofits into the field of social accounting. Both models address the social impact of nonprofits by including social inputs and outputs that accounting statements normally exclude.     

Economic evaluation of drug court: methodology, results, and policy implications

The purpose of this study was to conduct a cost-benefit analysis of three Drug Court programs in Kentucky for two groups of Drug Court participants: program graduates and program terminators. The economic benefits of the Drug Court programs were estimated relative to a comparison group of individuals who were assessed for the Drug Court programs, but did not enter the programs. This study highlights important factors in estimating the costs and the economic benefits of a Drug Court program. Results indicated that, particularly for graduates, Drug Court involvement was associated with reductions in incarceration, mental health services, and legal costs, as well as increases in earnings and child support payments. Net benefits and benefit–cost ratios for each program are presented and policy implications are discussed.     

Accounting for the value of volunteer contributions

There is a need for an accounting paradigm that properly illustrates the value that nonprofits generate. Much of that value comes from volunteer contributions, which are significant but for the most part are not included in financial accounting statements, even though our research indicates that they account for almost a third of the value added by these organizations. This article reports the results of two studies related to measuring volunteer value in the accounting of nonprofits and then draws some policy implications from the research. The first study, a survey of 156 nonprofits in Canada, found that although about one‐third of the sample kept records of volunteer hours, only 3 percent included a value for them in their accounting statements. The second study, of nonprofit accountants, found that they did not feel that financial accounting statements properly represented the contribution of their organizations. A series of policy recommendations are presented, including suggestions for revising the regulations of accounting bodies for imputing volunteer value and creating accounting statements that better represent the contribution of nonprofits.     

Register data in the evaluation and program planning of addiction treatment programs: Using Sweden as an example

Data from large-scale registers is often underutilized when evaluating addiction treatment programs. Since many programs collect register data regarding clients and interventions, there is a potential to make greater use of such records for program evaluation. The purpose of this article is to discuss the value of using large-scale registers in the evaluation and program planning of addiction treatment systems and programs. Sweden is used as an example of a country where register data is both available and is starting to be used in national evaluation and program planning efforts.The article focuses on possibilities, limitations and practicalities when using large-scale register data to conduct evaluations and program planning of addiction treatment programs. Main conclusions are that using register data for evaluation provides large amounts of data at low cost, limitations associated to the use of register data may be handled statistically, register data can answer important questions in planning of addiction treatment programs, and more accurate measures are needed to account for the diversity of client populations.     

Evaluation and Evaluative Rigor in the Nonprofit Sector

Nonprofit organizations are under more pressure than ever to provide “rigorous” evidence of program impact. However, as expectations for rigorous evidence rise, many nonprofits struggle with challenges that inhibit evaluation. Recognizing these trends and tensions, this study identifies catalysts and obstacles to evaluation activity and the correlates of evaluative rigor among US nonprofits based on a national survey of registered public charities (n = 311). Results reveal that the most important catalysts to evaluation include the desire to improve program effectiveness and legitimacy, while the most important obstacles include insufficient time and money. Moreover, regression analysis finds that evaluation appears to be most rigorous when (1) evaluation is a priority, (2) a supportive organizational culture exists, (3) management requires evaluation, (4) evaluation is not primarily motivated by personal interest, and (5) evaluation is likely to reveal success. Overall, intrinsically motivated evaluation appears to be more rigorous than externally mandated evaluation, suggesting that stakeholders should work to help capacitate receptive nonprofits to improve evaluative rigor instead of imposing external requirements.     

How organizational characteristics affect the adaptive tactics used by human service nonprofit managers confronting financial uncertainty

The way that nonprofits respond to funding uncertainty is crucial to their ability to meet goals and position themselves for future success. This article investigates how structural, managerial, and financial characteristics affect the adaptive tactics used by human service nonprofits during times of financial stress. These tactics include adding new programs, reducing programs or staff, expanding or starting joint programs, pursuing earned income, and expanding advocacy involvement. Using longitudinal data on human service nonprofits collected on either side of the 2002–2003 economic downtown, we find that larger size provides organizations with a unique ability to choose among different adaptive tactics, as larger size was significantly predictive of adding new programs, reducing programs, expanding advocacy, and pursuing earned income. Strategic planning was positively associated with innovative tactics such as starting joint programs or pursuing earned income. Financial stress or declines in an organization's major funding source led to cutbacks, as expected, but managers who foresaw these challenges were able to respond proactively by adding programs or starting joint programs. However, managers with more training did not respond much differently than did other managers, and organizational age and use of performance management tools had no effect in guiding organizational responses to financial uncertainty.     

Accounting for Social Value in Nonprofits and For‐Profits

The authors argue that social value can serve as a bridge between the nonprofit and for‐profit sectors. They further propose that social value is not simply an abstract concept but can be measured by applying social accounting methods. The authors argue that nonprofits are founded on a social mission but that traditional accounting approaches do not properly assess their social products. They illustrate the centrality of social value, both to nonprofits and for‐profits, in two ways: (1) a discussion of for‐profit firms that behave much like nonprofits and (2) an application of the social accounting model. The authors discuss two types of firms: (1) for‐profits whose shares are held in a trust and therefore operate much like corporations without shareholdersor like nonprofits and (2) for‐profits whose owners do not exercise the rights associated with their property. They then apply a social accounting model to nonprofit employment training programs to illustrate how the inclusion of social variables changes the assessment of an organization's value. They conclude with a discussion of a social accountability framework that embraces both nonprofits and for‐profits.     

Unintended? The effects of adoption of the Sarbanes‐Oxley Act on nonprofit organizations

This article investigates the benefits and costs to nonprofit organizations emanating from the adoption of the Sarbanes‐Oxley Act (2002). The act was intended to stem financial malfeasance in the for‐profit sector; nevertheless the article finds that about half the surveyed nonprofits adopted provisions of the act and experienced effects in proportion to the level of adoption. About one in four of the nonprofits attributed benefits of better financial controls and reduced risk of accounting fraud to the adoption of the Sarbanes‐Oxley Act. More than one‐third of the nonprofit organizations reported increased fees for external audit, and about 15 percent cited “reallocation of resources from program to administrative expenses.” This article discusses the unintended positive and negative effects of public policy on nonprofit organizations.     

Creating positive change in community organizations: A case for rediscovering Lewin

As nonprofits, especially those with a community mission, pursue developmental goals, they may benefit from various planning and analytical tools. This article explores an application of Kurt Lewin's planned change model to an assessment and revisioning process undertaken by a community‐based organization, indicating the ongoing usefulness of Lewin's work in the nonprofit sector. Using a case study approach, we examined the actions embarked on by the organization to address decreased funding and client losses. The Lewin model is overlaid to illustrate its value in structuring organizational decision making and development. The model is a three‐step process of unfreezing from old practices, moving and changing the organization into new directions based on formally identified needs, and refreezing into more effective organizational modes. When combined with other standard practices such as strategic planning, Lewin's model provides a practical and theoretically insightful tool for nonprofits wishing to refine their missions and programs and engage in successful organizational change.     

Work‐life policies and programs: Comparing the responsiveness of nonprofit and for‐profit organizations

Analysis of the data from the 1998 Business Work‐Life Study, one of the first comprehensive studies of how U.S. organizations are responding to the work‐life needs of the nation's changing workforce, indicates that nonprofits with one hundred or more employees are more likely than for‐profits to offer particular types of work‐life policies and programs (such as extended leaves following birth or adoption) and to pay for at least some of the costs of health insurance for part‐time employees. In contrast, nonprofits are less likely to offer other work‐life supports (such as paid maternity leave). Despite the resource constraints that can restrict the compensation and benefits packages offered by some nonprofits, the overall scope of the work‐life initiatives established by nonprofits is similar to those initiatives at for‐profit organizations. Regression analyses find that although organizations' profit status does not explain variance in the scope of their work‐life initiatives, three of the variables measured by this study (indicators of workplace commitment to diversity and work‐life issues, percentage of women in executive positions, and the size of the workforce) do.     

Integrated Social Accounting for Nonprofits: A Case from Canada

Whereas social accounting has been strong in its critique of conventional accounting, to date it has not been as effective in developing accounting frameworks consistent with its principles. This is particularly true for nonprofit organizations. The costs of nonprofits can be easily measured; however, not captured by conventional accounting is the value of their nonmonetized resources such as volunteers. This paper argues that social accounting for nonprofits would benefit by creating accounting statements that combine the economic and social impact of an organization (referred to as an integrated approach). After discussing some historic examples of integrated social accounting, the paper presents a Canadian case study in which the value added by volunteers of a nonprofit organization is combined with its financial statements in an Expanded Value Added Statement. By combining social and economic information, a very different performance story of the organization emerges.     

Nonprofit social services in Moscow: Leadership and administrative issues

This article presents the findings of a study of nonprofit human services organizations in Moscow, Russia, in the early stages of development of the nonprofit sector. It addresses the following issues of relevance to social welfare in particular and nonprofits in general. First, what is the legal status of nonprofits? Second, what leadership and governance mechanisms have evolved? Third, how are resources, both financial and human, obtained? And, finally, how can Western consultants be useful in addressing the unique and specific needs of nonprofits in Russia as they bring their expertise into this setting?     

Analyzing free-text survey responses: An accessible strategy for developing patient-centered programs and program evaluation

Despite widespread availability of yoga in the Veterans Health Administration (VA), it remains unclear how to best evaluate yoga programs. This is particularly problematic for programs aimed at veterans with mental health concerns, as evaluation typically focuses narrowly upon mental health symptom severity, even though program participants may have other health-related priorities. We analyzed responses to free-text questions on 237 surveys completed by veterans with mental health concerns enrolled in a yoga program at six VA clinics in Louisiana to characterize veteran participants’ experiences with yoga. Qualitative analysis resulted in 15 domains reflecting veterans’ individual health-related values and priorities. We use results to illustrate the potential for analysis of free-text responses to reveal valuable insights into patient experiences, demonstrating how these data can inform patient-centered program evaluation. The approach we present is more accessible to those responsible for decision-making about local programs than conventional methods of analyzing qualitive evaluation data.     

Cause-related marketing,philanthropy, and the arts

Joint fundraising and promotional programs between businesses and nonprofits, often referred to as cause-related marketing, have been on the rise. During the 1980s, many large corporations initiated cause-related marketing programs. Less is known, however, about how widespread cause-related marketing has become among medium-size companies. In the study of 478 medium-size businesses reported here, one-fifth made contributions to nonprofits as part of cause-related marketing programs, and more were becoming interested, but many of the businesses were dissatisfied with the effect of their contributions to nonprofits. Satisfied business participants actively recommended nonprofits to other business owners and intended to increase their own contributions. The authors provide additional insights on business donor motivation through their application of the Seven Faces framework.     

Examples of sports-based youth development programs

The authors provide examples of sports-based youth development programs and offer information about program mission and vision, program design and content, evaluation results, and program sustainability. The four sports-based youth development programs presented are Harlem RBI, Tenacity, Snowsports Outreach Society, and Hoops & Leaders Basketball Camp. These programs serve diverse audiences with diverse missions, but all are focused on using sports to develop life skills and facilitate learning. Harlem RBI serves boys and girls ages seven to eighteen living in East Harlem. The program combines baseball, academic, and enrichment programs with the overall goal that participants who enter the program as vulnerable children graduate as resilient young adults. Tenacity, a nonprofit organization with headquarters in Boston, uses tennis to attract and retain students who particiate in a high-quality academic support and physical fitness program. The mission of Snowsports Outreach Society, based in Vail, Colorado, is building character in at-risk and underprivileged youth to develop their decision-making ability for healthy and successful life experiences. Hoops & Leaders Basketball Camp is a youth mentoring and leadership development program that offers summer camp experiences to improve the lives of at-risk urban youth in New York City. It uses the game of basketball to provide youth with caring mentors, develop leadership skills, and offer exposure to different educational and career paths.     

Reporting Volunteer Labour at the Organizational Level: A Study of Canadian Nonprofits

Volunteer contributions in the production of services are an important resource internationally. However, few countries include volunteer contributions in their national accounts, even though many encourage their populations to engage in volunteering. At the organizational level, many nonprofit organizations using volunteers often limit their input to a footnote in annual reports acknowledging their contribution; few estimate their value in financial terms. As a result, their financial accounts lack information upon which to base decisions affecting the organizations and the communities they serve. Additional information is required to assess the impact of volunteers in individual nonprofits as well as the sector as a whole. This study focuses on Canada, one of the few countries that include volunteers in the national accounts, to examine to what extent nonprofit organizations estimate a financial value for these contributions and include this in their financial statements. This paper reports the results of an online survey of 661 nonprofits from across Canada. In order to understand why some organizations keep records for volunteer contributions and quantify them, two sets of explanatory factors are explored: organizational characteristics and the attitude of the executive director. We find larger organizations were more likely to engage in record keeping and estimating volunteer value, as were organizations with a relatively large group of volunteers and volunteer programs. The attitude of the executive director is important in determining which organizations engage in these practices.     

The Decision-Making Context and Its Impact on Local Human Service Nonprofits

One significant factor affecting an organization's functioning is the decisions made by other organizations that are important to it. We examine decision-making in three local human service delivery nonprofits, focusing on the level (local versus national) of the actors making decisions as well as the degree of horizontal or vertical coordination among decision makers. The findings show that the decision-making context affects nonprofit structure and operations and suggest that providers may have to make significant trade-offs as they seek to restructure in response to policy changes such as devolution.     

Cultivating Compassion for Self and Others: A School-Based Pilot Study for Peer-Nominated Caring Adolescents

Many have called for school-based student programs that teach skills related to self-care and caring for others. Here, such a program for peer-nominated adolescents was developed and piloted virtually at one high school during the COVID-19 pandemic. Results of a longitudinal, quasi-experimental evaluation of the program showed high-quality program implementation and promising program impacts. Effect sizes indicated moderate to large program impacts on improvements in adolescents' self-compassion, sense of interdependence, and perspective-taking, and female adolescents' interoceptive awareness, compared to controls. No group differences in compassion for others were found. The need for more research on programs that help adolescents balance compassion for the self and for others is discussed.     

Determinants of the recovery of financially distressed nonprofits

Financial ratios are traditionally used to predict and diagnose financial vulnerability; this is helpful, but leaves unanswered how the vulnerable nonprofit should prioritize this information in order to survive. Using panel data, this empirical study observes the financial behaviors of distressed nonprofits for 4‐year periods where the first 2 years are financially vulnerable. Two definitions of vulnerability are tested: when liabilities exceed assets (insolvency) and when net assets shrink by more than 25% annually (financial disruption). In determining which nonprofits recover during the final 2 years, we find that the type of vulnerability impacts which financial indicators a nonprofit should target, and that common tactics such as improving profitability may be counterproductive. Finally, we do not find evidence for liabilities of newness or smallness in the statistical analysis.