Is Your Not for Profit Reporting It’s Full Value Proposition?

By Jeff Curiel, CPA, Manager, Audit & Other Assurance Services Group and Amanda Meko, CPA, Partner, Team Leader of the Not-for-Profit Services Group

“How do we create value?” This question is often asked when analyzing an Organization’s impact. As CPAs, it is oftentimes too easy to focus solely on numbers, without considering other factors that contribute to the long-term sustainability of an Organization. So, we must ask ourselves, do we see the full picture? Do we understand how our Organization creates value?

If you’ve been to any Accounting or Auditing update within the past year, you’ve likely heard about Integrated Reporting. Some believe that a change in the reporting and analysis of entities is necessary as our ability to gather and dissect data increases. This new approach offers a different way of observing an organization, to analyze the environment and assess how value is created. While still encompassing the financial performance of the Organization, we also dive into the non-financial capital of the Organization. More discussion and analysis is performed on items such as the external and internal environment; Organizational governance, developing a strong employee base, and a SWOT analysis (just to name a few). To gather a more intuitive understanding of your Organization, the Integrated Reporting model stresses the importance of understanding these factors.

To comprehend the position of an Organization, one must also consider the other capital resources. In no other manner do we consider the importance of the Board of Directors, or the CEO, or how key employees are developed and retained. This is what makes the framework of integrated reporting so exciting, it creates the opportunity to analyze more than finances. This is the opportunity to provide stakeholders additional information that they believe to be valuable (e.g. green initiatives). A great example of this is the report created by Coca-Cola, which not only discusses these non-financial factors, but also presents the report in a unique electronic format. (http://integratedreport.coca-colahellenic.com).

The exercise in preparing an Integrated Report is not without its difficulties. Initially, it takes a collaborative effort from management to gather and assess the necessary information. However, this could offer a more unique way of sharing information about your Organization and how you create value for your constituents. If you would like to learn more about this concept and the process for going about it, please contact Jeff Curiel at jcuriel@greenwaltcpas.com or Amanda Meko at ameko@greenwaltcpas.com.