South-Western - Management  
Exploring New Ideas for Making Finances Clearer and Scandals Rarer
Topic Control
Key Words Effectiveness, financial control
News Story

A series of embarrassing news stories emanating from the nonprofit industry has prompted the Independent Sector, an industry group, to draft a new code of ethics for the nonprofit industry. What is different about it is that it includes measuring effectiveness; i.e., judging nonprofits not just by the traditional ethical standards, but by their results, like a business.

A London partnership called Access is beginning to test a global reporting system for nonprofits. Its goal is to create a system what will provide credible information about past performance, and predictions about future performance. The company believes that this open, reliable accounting will help increase global giving. The program provides a standard database in which to report on governance, finances, management systems, strategies and results of work. The Inter-American Foundation plans to use Access for more than 330 grant recipients supported by a network of 40 corporate foundations. It is believed that it will help them standardize how they measure results.

Questions
1.

Financial control in companies is always complex, and many managers struggle with things like financial ratios, cash flow, and capital budgets. It may be even harder for many in the nonprofit industry. Why do nonprofits have a harder time measuring results, financial or otherwise, than for-profit businesses?

2.

What is the purpose of Access? Search the Internet to see if you can find more information on this software, or a similar program. What are the benefits to nonprofits of using a program like this?

Source "Exploring New Ideas for Making Finances Clearer and Scandals Rarer," The New York Times November 17, 2003.
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