With community organisations concentrating less on the bottom line than commercial businesses, traditional financial accounting methods may not always be the best way for such enterprises to track how they are going and plan for the future. An easy to understand guide by the University of Newcastle’s Centre for Urban and Regional Studies helps community groups set up the accounting methods most suited to their goals.
Social accounting is about applying the basic principles of accounting in social aspects of economics, so that these community-based organisations can measure how they are doing – whether they are meeting their aims and tracking what they have achieved over time. It sets up the processes that best meet the requirements of the organisation without detracting from the values and objectives of the group.
In 2010 Associate Professor Jenny Cameron, together with third year Development Studies students Carly Gardner and Jessica Veenhuyzen, put together a guide to social accounting for community organisations and enterprises, using Beanstalk Organic Food Cooperative and Fig Tree Community Garden as examples. The guide explains social accounting and its importance, based on the three main steps of planning, accounting and reporting and auditing.
These two organisations provide different perspectives. Beanstalk is more structured with five key stakeholders needing to be taken into account – farmers, fee-paying members, volunteers, a paid coordinator and the Committee of Management. Fig Tree’s set up is less formal, focussing on the values of organic growth, sharing, community building, education and fun. The guide highlights how social accounting provides different tools to each organisation to best correspond with the intentions of the group.
For Beanstalk treasurer, Dave Morley, social accounting complements the goals of the organisation. “Our constitution is about getting involved in the community, and fostering and promoting organic food,” he says. “We look for a means of ensuring time and money is being spent on the ethics surrounding the beliefs of the organisation. It’s not just about keeping afloat ourselves, but also about seeing what we can do within Beanstalk and also out in the community.”
For community organisations considering social accounting to track how they are going, Social Accounting: A Practical Guide for Small Community Organisations and Enterprises is available online.