Monday, 21 February 2011

Making Financial Reports Fundraising Friendly

Charity Accountants:  Have you ever watched potential donors read the financial statements of a charity?  Even sophisticated readers can be puzzled by things like fund accounting ("What do all these different columns mean?"), how endowments are treated ("What are all these transfers?"), or finding the answers to basic questions ("How much of the money raised goes to administration?")

It's a difficult task to stay up to date with the changing accounting rules for charities, disclosing financial results in a way that ties the revenues and expenses directly into the charity's mission and getting everything done in time for the audit.

But it's worth the struggle.  As I look back at all my accounting training, I can't remember devoting a single hour to making financial information easier to read, yet in these days of funding cuts in the charitable sector and increasing direct donor involvement, making the financial story understandable has never been more important. Imagine that each donation has a flag attached to it and the donor of that money needs to know exactly how the donation helps the charity achieve the donor's mission, as well as where the money actually went.

So, as you struggle to get the year end completed and start to think about how the audited statements should look, take a look at what Queen's University is doing about Voluntary Sector Financial Reporting Excellence.  Maybe you should consider entering it this year!