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subscriptions and fees, revenue generated through provision of goods and services and donations in kind, including significant contributions by volunteers. The Australian Government is a

significant contributor to the Not for Profit sector. Many Not for Profits receive grants and other funds to provide services to the community on behalf of government agencies. In addition, a range of Commonwealth and state/territory tax concessions contribute significantly towards financing Not for Profit activities. Some tax concessions such as Public

Benevolent Institution concessions (forecast at $1.6 billion for 2017-18) and Deductible Gift Recipient deductions (forecast at $1.2 billion for 2017-18) are more easily quantifiable whilst other concessions such as income tax exemptions are more difficult to quantify because many Not for Profits do not submit tax returns. Ultimately, Not for Profit tax concessions reflect tax revenue foregone from the public purse and governments require a level of accountability and transparency from Not for Profits that demonstrate appropriate use of public funds. The demand for information from

Not for Profits does not stop with funding providers, other stakeholders such as beneficiaries, creditors, employees and volunteers will all have different information needs from Not for profits they have an interest in. Although financial reports provide

valuable information on the financial performance and position of a Not for Profit, what has become evident is that the information demands from stakeholders go beyond the financial numbers. Many stakeholders want more information about what is actually happening to the money a Not for Profit generates. The AASB’s ongoing project Reporting

of Service Performance Information aims to develop an accounting standard that will deal with the perceived information gap between what Not for Profits currently report and what stakeholders want. The proposals seek to establish principles for

the reporting of both quantitative and qualitative information that are premised on non-financial performance indicators. The AASB project is based on the

assumption that non financial performance information is valuable to stakeholders in Not for Profits. The project seeks to develop measures that demonstrate non-financial inputs, outputs and outcomes of a Not for Profit, along with how efficiently and effectively a Not for Profit has applied its resources. There are however some significant

challenges in measuring performance. Whilst some measures such as inputs and outputs might be easier to measure, outcomes, effectiveness and efficiency can prove more challenging concepts. Examples of practical challenges include the level of detail stakeholders need. Some stakeholders may be interested in performance measures relating to a specific program, others may be interested in performance measures relating to the entire organisation. Another challenge relates to

quantifying volunteer services, particularly in instances where the organisation does not have systems to capture such information. Some outcomes are more easily quantifiable than others. For example, a hospital might be able to quantify how many patients were successfully treated and discharged for a particular ailment, whilst an art gallery might find it more difficult to measure how many people enjoyed the artworks on display and the possible effect a visit to the gallery had. In many cases, qualitative description

of the activities of a Not for Profit will be required to complement quantitative non- financial measures, so that a more complete picture of how well a Not for Profit has performed can be provided. In developing criteria for performance

information, there needs to be recognition of the cost vs benefit of implementing such requirements across the Not for Profit sector. Larger Not for Profits with sufficient resources may be able to implement the necessary information systems to capture and present performance information.

The majority of the Australian Not for Profit sector is made up of very small organisations, which are unlikely to possess the necessary resources to capture and provide such information. Whilst the evolution of reporting

by Not for Profits points to performance reporting, there are more questions than answers at present on the right metrics. However, it is clear that stakeholders in Not for Profits are not just interested in financial information contained in statutory financial reports, they want information on other performance measures too. Standard setters and others with

involvement in the Not for Profit sector will have to continue engaging with users of the information to better establish their needs, which should inform the development of the requirements and guidance for the preparation and presentation of information that is relevant, reliable and useful to Not for Profit stakeholders.

CPA Australia is one of the world’s largest accounting bodies with a membership of more than 150,000 finance, accounting and business professionals in 121 countries across the globe.



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