Accountability and Social Accounting for Social and Non-Profit Organizations: Volume 17

Cover of Accountability and Social Accounting for Social and Non-Profit Organizations

Table of contents

(19 chapters)

Part I: Introduction


Within the accounting discipline and its literature, attention to the role of social and non-profit organizations has been growing, particularly with respect to issues of accountability and social accounting. In response, the aim of this introductory article is to present the background for the book by highlighting (i) the relevance and rise of the non-profit sector worldwide, (ii) the limitations of the conventional accounting framework when applied/transposed to NPOs and (iii) the ‘social accounting project’ for NPOs. The article presents analysis and critique based on a literature review of the accountability framework for NPOs. After presenting key worldwide statistics regarding the growing non-profit sector, the article points out the skepticism regarding the adoption of traditional accounting principles and frameworks for NPOs. The article offers both an examination of how to improve the accounting system for NPOs and a discussion of the benefits emerging from the social and environmental accounting and reporting models. ‘The social accounting project’ for NPOs is presented as a pathway towards these innovative practices increasing organizational transparency. This article and the book overall provide new contributions to the research literature, fostering synergies among financial accounting and social accounting scholars engaging with the NPO subject area. Moreover it brings together studies from a range of disciplines, such as financial accounting, social accounting, economics, management, and third-sector studies. This cross-disciplinary approach offers a major contribution to our developing knowledge in this field.

Part II: The Non-Profit Sector


There is still no universal definition of the third sector in Europe, but it can be seen as including all types of non-governmental not-for-profit entities such as non-profit organizations, mutuals, cooperatives, social enterprises and foundations. This article attempts to make sense of the current shifting conceptualization of the third sector in Europe. It is based on short country summaries of the images and concepts of the third sector in 13 European countries by EMES Network’s members, first presented in 2008 (Defourny and Pestoff, 2008; nine of them were recently revised and are found in the appendix to this article.). The perception and development of the third sector in Europe is closely related to the other major social governance institutions/mechanisms, like the market, state and community and through the third sector’s interaction with them. Moreover, many third sector organizations (TSOs) overlap with these other social institutions, resulting in varying degrees of hybridity and internal tensions experienced by them. TSOs can generate resources from their activities on the market, by providing services in partnership with the state and/or by promoting the interests of a given community or group. The country overviews document a growing professionalization of TSOs in most countries and a growing dependency of public funds to provide services. This has important theoretical and practical implications for orienting the articles included in this book. Thus, it can provide a key for better understanding the discussion and analysis in the remainder of this volume.


This article has two objectives: to clarify the organizational and managerial differences between social entrepreneurship and social enterprises and to investigate the role of social enterprises and their impacts on the welfare systems of European countries. The authors describe social entrepreneurship as a trend across all forms of enterprises and social enterprise as the institutionalization of a new typology that is distinguished by specific features from its inception. By relying on a theoretical analysis, the article supports the interpretation of social enterprise as an innovative institutional tool that can have a role in supporting growth and welfare. The essential features of social enterprise, which justify their competitiveness vis-à-vis public and for-profit organizations in the production and delivery of general-interest services, are thoroughly investigated. The article sheds light on the contribution of social enterprises to reforming and democratizing the traditional European welfare systems, which – since the 1980s – have revealed their inability to distribute welfare services inclusively and cope with the growing phenomena of poverty and inequalities.

Part III: Accounting and Accountabilities for the Non-Profit Sector


To examine metrics used for performance measurement, analysis, and decision-making by insurance cooperatives.

Design and approach

A documentary review and semi-structured interviews of three large insurance cooperatives form the basis of the study.


The analysis suggests insurance co-operatives metrics are consistent with investor-owned companies. These measures do not recognize the cooperative principles and values which consistent the formative basis of these insurance co-operatives.

Practical implications

The insurance co-operatives under examination do not engage in a comparison to other insurance co-operatives; rather comparisons are made against investor-owned companies. As this analysis is used in decision-making and strategy formulation, guiding the direction of the co-operatives the questions must be raised: does the co-operative difference exist in the insurance sector and how (and what) performance analysis tools are used to assess their performance?


There is a paucity of research in the area of metrics and analytics of co-operatives. As such this article expands the academic scope of examination of co-operatives in the context of financial and accounting operations. Additionally, it adds to the ongoing discussion in the academy focused on the nature of co-operatives and the nature of the co-operative difference.


This study addresses the effects of the accounting reclassification of members’ shares in Spanish cooperatives motivated by the new accounting standards. The study reports the results of semi-structured in-depth interviews with experts. The accounting reclassification from equity to liability of members’ shares has effects even if there is no actual material change in terms of the members’ shares. Thus cooperatives are incentivised to modify their statutes in order to retain their equity accounting classification, even when this modification is not desired. The evidence is obtained from qualitative methods and a generalization using quantitative methods would be interesting if data were available. The present study provides a starting-point for further research into the use of lending technologies in the financing of cooperatives and the use of accounting information in granting bank finance to cooperatives, thereby contributing to the study of the use of accounting information by capital providers. There is very little literature on the effects of equity-liability accounting reclassification motivated by a change in an accounting standard. The study takes advantage of the recent accounting standard change in Spain which may be considered as a ‘natural experiment’ and contributes to the literature on the effects of accounting standards.

Part IV: Social Accounting for the Non-Profit Sector


By contributing to the burgeoning debate regarding “for what” nonprofit organizations should be accountable, this article aims to develop and present an Integrated Accountability Model (IAM) that considers three dimensions of accountability.


After highlighting the limits of conventional accounting for NPOs and reframing the role of profit within them, the article presents a complete literature review on “to whom” and “for what” NPOs have to be accountable while further developing the IAM of integrated accountability.


The integrated accountability model developed in this article proposes three categories of NPO accountability: (i) the economic and financial dimension or the capability/ability to be economically sustainable in the long term; (ii) the mission-related dimension or the raison d’être of an NPO, that is, the purpose for which the NPO has been set up, its mission; and (iii) the social-related dimension or the relationship with the stakeholders, that is the impact of NPO activities on its stakeholders in terms of the social contract between them.


Broadly, this article makes a contribution to the literature on accountability for NPOs. In particular it sheds light on two points: the importance of separating the mission-related dimension from the social-related one and the potential to open avenues for expansion of the IAM model to for-profit organizations.


This article focuses on the lesser-used notion of stewardship and stewardship-ism. Stewardship is a concept that has inspired the activities of several organizations whose mission is to preserve, protect and maintain natural, social and economic assets for the benefit of stakeholders and communities. As observed by Contrafatto and Bebbington (2013), stewardship has some resonance with current policy agendas that attend to the issues related to sustainable development, corporate social responsibility and accountability. Most of the existing works on stewardship provide several perspectives with the focus being either on normative foundations of stewardship or on its organizational and managerial implications. In particular, the stewardship-related literature offers a range of conceptions and approaches ranking from a relatively narrow view of the resources, sources and time frame of stewardship to very broad specification. In this article, the management, organization and accounting literature is analysed to propose a map of current theorizing on stewardship. In particular, drawing on the methodological approach adopted by Lowndes (1996), four theoretical vignettes have been proposed to illustrate different variants and approaches in stewardship framework. Each vignette provides a set of conceptual constructs, ideas and views to understand stewardship and stewardship-inspired behaviour. The variety of approaches/perspectives on stewardship, as illustrated from the analysis undertaken in this article, provides an opportunity for deeper theory-based understanding of social and organizational dynamics. In particular, it is argued that the richness of perspectives, focus and levels of analysis could offer insights to conceptualize, see and make sense of some of the challenges that are posed by a desire for promoting transition towards more sustainable ways of organizing our society.


The purpose of this article is to develop a nonprofit integrated social accounting (NISA) model that takes into account the particular objectives of nonprofit organizations (achieving their mission and remaining viable as an organization), their specific characteristics (e.g., the engagement of volunteers), and their economic, social and environmental impacts. The conceptual framework includes defining social accounting, setting the boundaries of the reporting entity, identifying the objectives of nonprofit reporting, identifying the users of the accounts and their information needs, and considering the questions that have to be answered in order to know if the organization is achieving its goals. From the conceptual framework, the NISA model is developed, incorporating four elements: (1) economic and human resources; (2) economic, social and environmental value creation; (3) internal systems and processes; and (4) organizational learning, growth and innovation. Overall, the model provides a mechanism to address both functional and strategic accountability concerns of the organization, its effectiveness and efficiency, and to drive behavior through feedback and readjustment. In this way, accounting plays an important role in shaping the ‘reality’ of the organization.


This article analyzes the interplay between regulation and social and environmental reporting in northern Italian social enterprises. Specifically, it investigates how “non-accredited” social enterprises discharge voluntary accountability before and after the introduction of regulation making social and environmental reporting compulsory for “accredited-social enterprises.” By developing a content analysis on 170 stand-alone social and environmental reports, this article provides a longitudinal analysis of voluntary disclosures in a regulated context from 2006 (before regulation) to 2009 (after regulation). Based on the total number of disclosures and the average number of sentences per report, Italian “non-regulated” social enterprises showed increased voluntary disclosure on social and environmental matters from 2006 to 2009; however, when analyzing the average sentences per report, it emerges that the information contained in the stand-alone social and environmental reports decreased, especially disclosures related to “social-related issues.” This article looks beyond crude noncompliance analysis with legislation and analyzes if the regulation influences organizations’ voluntary disclosure. It analyzes all of the social and environmental disclosures provided by northern Italian “non-accredited” social enterprises before and after the introduction of regulation. The novelty of this article rests in the fact that it does not analyze the social and environmental disclosure of “legal social enterprises”; rather, it considers the whole voluntary disclosure context for “non-accredited” social enterprises in a regulated environment.


The purpose of this article is to analyze intellectual capital (IC) measurement, management, and reporting practices at organizational level, with the aim to address a relevant research question: are IC reports used as accountability or as image-building tools? The article presents a single in-depth case study of an Italian nonprofit organization (NPO) which has been measuring and reporting its IC for several years. The research project was conducted using an interpretative approach, by analyzing organizational IC reports in the light of a framework, derived from corporate social responsibility (CSR) and IC literature, able to provide researchers with useful insights to interpret the role played by IC report in the investigated organization. The lenses provided by the designed framework give researchers the opportunity to offer a skillful interpretation of the information provided by the IC report. From the analysis, it results that the investigated NPO use IC report more as a managerial rather than an accountability tool. Even though the use of a single case study provides in-depth and rich data, it also limits the generalizability of the observations to other companies. Moreover, the results obtained can be influenced by the model built and adopted to address the research question. The findings can support companies to enable IC reporting practices and readers to understand the orientation of the companies towards a reputation or an accountability approach by reading the IC report using the research model. The article fills a gap in the research of voluntary disclosure of NPOs from a different approach (i.e., to analyze IC reports to make evident the approach followed in disclosing IC information). So doing, the article contributes to narrowing the gap between IC theory and practice and offers new insights on the reasons why NPOs disclose IC.

Cover of Accountability and Social Accounting for Social and Non-Profit Organizations
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Advances in Public Interest Accounting
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Emerald Publishing Limited
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