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International financial management standards for NGOs
Mango’s key strategic goal for the period 2013-2016 is to lead the development of internationally recognised not-for-profit (NFP) financial management standards. This will be vital in achieving our vision - a world where everyone can be confident that NGOs are making the most of their money.
The case for standards
Like Cinderella, overshadowed by her two larger sisters, the NFP sector is increasingly stepping into the limelight to tackle the world’s most complex social and environmental problems. But it is also attracting the occasional glare of public scandal and concern about corruption.
And yet, despite involving millions of organisations and $trillions of funds, our sector (unlike the corporate and public sectors) has no international financial reporting standards, or accepted financial management quality standards.
As part of our long-standing campaign, we advocated that there should be an international financial reporting standard for not-for profit organisations. This led to a key study by the CCAB, a partnership of key accounting bodies in the UK and Ireland (Mango was on the technical steering group). The study acknowledged that:
“Charities and other non-governmental organisations (NGOs) increasingly work internationally with grants from government funding their development and relief activities, while private donors and international foundations are increasingly taking a global approach to their work. As a result, charities and other NGOs face a multiplicity of international grant regimes, often made more complex by the lack of an agreed approach to financial planning
The same study included an international survey, which found that:
“72% of respondents expressed agreement with [the statement that] ‘it would be useful to have international standards for NPO accounting’”
Increasing trust and reducing waste
International standards in financial management of grant funds would:
- provide better assurance for donors - and build the trust needed so that a higher proportion of funding is channelled directly to local and national NGOs
- simplify financial reporting and stop the waste of resources caused by the lack of harmonisation between donor requirements - this leads to multiple audits and assurance visits, and a high administrative burden for grant recipients.
URGENT: Help us to show donors, NGOs and standard-setting bodies that non-profit accounting standards are needed - add your voice to our supporters list! Want to get up to speed on the campaign so far? Learn more here.