Social accounting provides greater picture of an organization's value
Framework expands environmental and sustainability accounting
Tuesday January 27, 2009 -- Jennifer Higgs
Dr. Laurie Mook, OISE/University of Toronto Social Economy Centre director, says it's important for non-profit organizations to start thinking beyond traditional accounting and consider the resources and added value they bring to the community.
"Sometimes what happens when you don't put a value on something is it is perceived to be valueless or not having a value," Mook told Axiom News.
Traditional accounting income statements show how money is spent, and when only looking at the dollars coming in, there is a loss of capturing the value that is created. She says organizations need to flip this around, and look at the value that is being created and the difference being made in the community.
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| Laurie Mook |
Social accounting, a fairly new practice, provides a workable framework that considers a broader range of factors than just conventional accounting.
"This is a broad term that includes a variety of alternative accounting models, including expanded value-added accounting, environmental accounting and sustainability accounting," says Mook.
There are varying definitions of social accounting, but they share the common features of expanding the ways and criteria of looking at an organization in relation to its surrounding environment. Stakeholder engagement may be emphasized, and both quantitative and qualitative information is included.
"Although most commonly social accounting reports are supplemental, there are increasing calls to integrate the economic, social and environmental information in one report," says Mook. "This is important to show the interrelationship of these factors and place the social and environmental impact in context with the economic."
Social accounting has an expanded value-added statement that makes visible the organization's volunteer contributions. Volunteers wouldn't be at an organization unless they believed in what you were doing, says Mook.
"It's another way of showing the strengths your organization brings to the local community."
Non-profit organizations need to think of themselves as creators of value as opposed to using up resources, she says.
Mook was a member of a panel discussion on the implications of measurement for non-profit at the recent Symposium on Measuring the Impact of Doing Good at the University of Toronto's Rotman School of Management.
Visit the Social Economy Centre's website at www.socialeconomy.utoronto.ca for more information.
Related Stories:
Non-profit organization leaders engage in evaluation dialogue
Upcoming Rotman event tackles measuring the impact of doing good
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