Not-for-profit ratios for financial resilience and internal accountability : a study of Australian international aid organisations

Not-for-profit (NFP) financial ratio research has focused primarily on organisational efficiency measurements for external stakeholders. Ratios that also capture information about stability, capacity (liquidity), gearing and sustainability, enable an assessment of financial resilience. They are thus valuable tools that can provide a framework of internal accountability between boards and management. The establishment of an Australian NFP regulator highlights the importance of NFP sustainability, and affirms the timeliness of this paper. We propose a suite of key financial ratios for use by NFP boards and management, and demonstrate its practical usefulness by applying the ratios to financial data from the 2009 reports of ACFID (Australian Council for International Development)-affiliated international aid organisations.

An examination of recent taxation amendments, corporate law reforms and Queensland legislative reforms affecting nonprofit organisations

There is a tax amendment bill which will be debated. The Government has promised to outline its plan for the reform of the taxation system sometime this year. The plans appear to go beyond the mere introduction of some sort of goods and services tax to reform of the whole taxation system including fiscal relations with the States. Not for profit organisations will find their taxation environment will change. Governments are reluctant to permit exemptions to a GST style arrangements. GST trade offs such as reduced income tax rates and abolishing indirect taxes are useless to nonprofit organisations, as many are already exempt from such imposts. Administrative changes to tax collections may also have an impact. If the government decides to make an individual PAYE taxpayer return optional in exchange for no or standard deductions, this may have an effect on fundraising. The FBT and salary packaging schemes that not for profit organisations use will be under intense scrutiny. A regionalisation of the ATO along the successful model of the ASC would see discrete areas such as not for profit exemptions being centralised in one regional office for the whole of Australia. For example the Tasmanian ASC Office has the responsibility for much work in respect of corporate charities and not for profit companies.

Charitable bequests a specific case of gift giving

Over the last 5 years, charities have acknowledged that bequests are a source of income with the potential for enormous growth. As the population ages the number of possible bequest donors will increase. Charities are implementing bequest campaigns to target the older donors, and the need for research is evident...

Nonprofit organisations and value added (GST) taxation

The subject of this paper is the changes in the taxation of non-profit organisations which seem to be more or less inherent in the value added taxes. The Australian federal Coalition's proposed goods and services tax will be part of the discussion.

Nonprofit organisations face a restructuring state : the case of local social services in the Hunter region of New South Wales

This paper is concerned with certain of the characteristics of local social services, and their role in a restructuring Australian welfare state. I am particularly concerned with the distinctive gender characteristics of these organisations, because in comparison with most other organisations they have a feminised quality. This partly mirrors women's traditional role of undertaking the major part of the caring labour of society. However, simultaneously work in these organisation deviates from more traditional patterns where employed women occupy subordinate positions. In many community organisations, women occupy leadership roles. The analysis here is concerned with the apparently paradoxical nature of these organisations in their capacity to entrench traditional gender roles and to challenge these by allowing women to fill management positions. It is also concerned to examine whether changes that have been occurring in the community services sector over the last two decades are likely to enhance women's general position in the society, or diminish the power exercised by women. The paper draws in a preliminary way on a study of local services in the Hunter Region of NSW undertaken in the latter half of 1992. These preliminary findings are set against the broader picture of developments in the contemporary welfare state.

"Money pouring out of its ears" : on the taxation of really profitable nonprofit organisations in Australia

Under current law Australia appears to be a tax haven for certain non-governmental institutions. Millions of ordinary business income may go untaxed and the deductibility for donations is unlimited - both are very generous tax measures in an international context. The basic problems of most Australian nonprofit organisations are not taxation; they are just that: nonprofit. Anybody interested in the non-governmental sector should be willing to face the question: What is an equitable tax treatment? The short-term tactic of ducking the question may not be the best or most beneficial long term strategy.

The application of financial ratios in analysing nonprofit organisations

Historically ratios have been used to assess the financial standing of profit organisations. It would be expected the role which such ratios play in analysing nonprofit organisations would be considerably different due to the lack of profit motive. Many traditional ratios are based on profitability as a benchmark. The nonprofit sector plays an important role in society yet to date there has been no research carried out on financial statement analysis for nonprofit organisations in Australia. This paper examines ratios of a group of nonprofit organisations and assesses the applicability of the traditional profit-based ratios to nonprofit organisations. Financial statements of a sample of charities registered in Queensland are analysed. The traditional profitability, liquidity and financial stability ratios are analysed and calculated wherever practicable and compared to the typical benchmarks used in profit analysis.

An analysis of the differences in audit processes used in the audit of nonprofit and profit organisations

Nonprofits constitute a large part of collective behaviour in society. Presently there is little formal research addressing the role of audits in nonprofit organisations. Before models can be developed for the production of nonprofit auditing information, it is necessary to examine the present conduct of nonprofit audits. The Australian Accounting Research Foundation - Legislation Review Board has released a position paper on the Association Incorporation Acts in Australia - the most frequently used legal form for nonprofit organisations. The Board is addressing the issue of financial statement reporting including audit. This is coinciding with the investigations resulting from the collapse of the National Safety Council (Victorian Division), (NSC). The NSC, a nonprofit organisation formed as a company limited by guarantee, is in liquidation and the auditors are being sued for damages resulting from their alleged failure to perform their duties adequately.

Gifts, the law and functional rationalism

This paper examines the legal facilitation (or rather lack of facilitation) of gifts. The emerging western political ideology of welfare is based on the premise that nonprofit organisations are to play a far greater role in the delivery of welfare services. This role will be enabled in part by increased gifts. The ideology has not addressed the fundamental hostility of the law to the facilitation of gifts. The nature of the legal obstruction of such gifts is compared to equivalent commercial transactions, the reasons given for this obstruction are analysed and the appropriateness of such nonfacilitation is challenged. A state that does not alter the legal hostility to gifts may find that organisations do not attain their expected role in the changing welfare state.

Impact of the introduction of machine gaming in Queensland on minor and major bingo

Material for this paper comes from as report commissioned by the Department of Family Services, Aboriginal and Islander Affairs. The report is the result of a multi strategy research project designed to assess the impact of gaming machines on the fundraising capacity of charitable and community organisations in Queensland. The study was conducted during the 1993 calendar year. The first Queensland gaming machine was commissioned on the 11 February, 1992 at 11.30 am in Brisbane at the Kedron Wavell Services Club. Eighteen more clubs followed that week. Six months later there were gaming machines in 335 clubs, and 250 hotels and taverns, representing a state wide total of 7,974 machines in operation. The 10,000 gaming machine was commissioned on the 18 March, 1993 and the 1,000 operational gaming machine site was opened on 18th February, 1994.

Nonprofit organisations and public policy : exploring the research role of the Brotherhood of St Laurence

This paper begins to explore the role of the Brotherhood of St Laurence as a nonprofit welfare organisation and its influence on public policy in Australia. The Brotherhood's impact on Australian social policy has been evident through a range of actions: the production of research on relevant social issues; the preparation of submissions and position papers and involvement in consultations with governments on social policy; and the personal influence of many of the charismatic (mostly) men who have led the organisation throughout its history. This paper highlights the Brotherhood’s research aspect and speculates upon the impact of its considerable research contribution. The Brotherhood has been involved in service delivery through a range of often innovative programs throughout its history, but the organisation's involvement in research and advocacy has rendered it unique in comparison to any other nonprofit welfare organisation in Australia. This paper finds that different kinds of research can be utilised in different ways; by studying the output of the Brotherhood it will explore and highlight how knowledge utilisation takes place. [Introduction]