Cost Accounting Practices The Urban Institute Cost Accounting Practices Center on Nonprofits and Philanthropy Tom Pollak ARNOVA Annual Conference November 2002 Montreal Canada

Research Questions Do nonprofits have the technical and accounting infrastructure to meet both their internal and external reporting needs? Internal – track fundraising costs & efficiency, overall and by tactic External – Audit and Form 990 requirements Does the infrastructure make a difference? The Urban Institute Center on Nonprofits and Philanthropy

Three Elements for Tracking Activities Labor Other costs – invoices, bills Revenue The Urban Institute Center on Nonprofits and Philanthropy

Number of Respondents by Major Category

Number of Fundraising Tactics by Budget Size

Accounting Systems Source: Urban Institute, Financial Reporting Survey, 2002 (n=490)

Use Software to Track Fundraising Revenue?

Were your financial statements audited by an Independent CPA last year?

Form 990 completed by auditor?

Track Fundraising Revenue by Fundraising Method? p < .07

DELETE ---Number of Fundraising Tactics by Budget Size

Use Software to Track Fundraising Revenue?

Use Software to Track Fundraising Revenue?

Invoices or bills coded by functional expense category?

Track staff time by functional expense category for each payroll period?

Track expenses by fundraising method?

Track staff time by fundraising method?

Conclusions Internal use External reporting Does more elaborate revenue tracking make a difference? Do more refined cost accounting procedures make a difference? Further research: Quantitative performance measures Perceptions of costs and benefits External reporting Technology and accounting resources are widely available and distributed The Urban Institute Center on Nonprofits and Philanthropy