Resources For Accountability and Financial Management in the Voluntary Sector

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Introduction

Canada's voluntary sector, comprising over 180,000 charities and non-profit organizations, plays an important role in making Canada a more caring and prosperous country. The sector is enormously broad and diverse, including organizations working on education, health, arts, faith, sports, social justice and the environment. In 2000, charities and non-profit organizations received five billion dollars in private sector donations to invest in their respective issues.

Building on a long history of working together, the Voluntary Sector Initiative (VSI) is a joint process between the voluntary sector and the Government of Canada. The long-term objectives of the VSI are to strengthen the voluntary sector's capacity to meet the challenges of the future and to enhance the relationship between the sector and the federal government and their ability to serve Canadians. The VSI focuses on several key areas, including developing an Accord, information management/information technology (IM/IT), public awareness, voluntarism, financing, capacity and regulatory issues affecting the voluntary sector.

In recent years, voluntary sector organizations have become increasingly aware of the importance of accountability and sound financial management (i.e., being able to demonstrate wise use of resources). Voluntary sector organizations, through their boards of directors, are accountable to many in their communities including funders, clients, members, volunteers, staff, government, donors and the general public. Organizations are facing increasing demands for accountability, while their available resources for providing programs and services have been reduced. The voluntary sector as a whole must govern itself carefully and account to stakeholders for money raised and spent, for results achieved, and for expectations met or not met.

As part of the VSI's commitments in the area of capacity building, this inventory was designed to identify resources, including links to Web sites, for information to enhance accountability (see Appendix 1: Inventory of Resources to Enhance Accountability) and to advance financial knowledge and voluntary sector management skills (see Appendix 2: Inventory of Financial Training and Voluntary Sector Management Assistance Resources). This document also provides an overview of accountability and financial management issues of interest to the voluntary sector.

This overview guide is primarily intended for medium-sized organizations with some accounting support. However, some of the tools and resources in the inventory will be helpful to all organizations. Many organizations already have effective practices in place, and will not need to make any changes. For some, particularly very small organizations or those that operate without boards, the overview modules may not be applicable. Smaller, grassroots organizations with no dedicated accounting staff will have different resource needs in these areas. For more information, see Appendix 1.

Every effort by voluntary sector organizations to enhance accountability will further improve their ability to provide services, strengthen credibility, maintain public confidence and build relations with stakeholders. In turn, these organizations will be better able to respond to the challenges in their communities.

While this guide provides a brief overview of current trends, examines ways to enhance accountability, and reviews financial management basics, it is intended primarily as a preamble to the extensive resource inventories which follow the modules. It is not intended to be self-contained in any way or provide full training on these topics.

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