EDITORIAL - CAP's Quarterly Newsmag Philanthropy (Q1 April June 2017)

This issue of CAP's Quarterly Newsmag Philanthropy (Q1 April June 2017) had a Guest Editor. In the coming weeks we will post articles from the newsmagazine on this blog. We begin with the editorial. Stay connected for the articles to follow.  

Editor - Noshir Dadrawala

Financial reporting is fundamental to effectiveness and ensuring transparency and accountability. For an NGO it can be a critical communication tool with donors, beneficiaries and other stakeholders. More importantly it is important that the organization tells its financial story clearly, concisely and authentically. While financial statements do need to comply with the relevant Accounting Standards and other regulations, one also need to ensure that financial statements are an effective part of the NGO’s wider communication with all stakeholders! It should clearly and effectively provide a snapshot of the financial health of the organization.

The critical areas of concern are always judicious use of the funds. How much is spent on the actual program, how much on overheads and admin, how much on travel and the all important ‘cost per beneficiary’? But, does all this emerge clearly in the financial reports? More often than not, the answer is no! We tend to tuck certain incomes and expenses under ‘miscellaneous’ income or expenditure without justification or explanation. Sometimes we take refundable deposits which we rightly (under accounting standards) reflect as liability and not income. We do the same with certain grants. While all this is within the framework of law and financial accounting, who does the onus of providing clarity for all this fall upon? should grant makers insist on "receipt & payment" statements also along with "income &expenditure" statements. Maybe they should, unless NGOs pull up their socks and take these and other issues seriously.
In our view sound financial reporting is not just a statutory requirement but essential to financial fitness and long term sustainability.
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Editor - Meher Gandevia

Financial reporting could only be the topic of the newsmagazine because I was not editing it. Finance and me have an aversion as many do. However, as I get older and senior in this sector I realise not its importance but also its relevance. Last year when we had a changeover of staff and in the interim, I had to report for certain grants, I had no choice but to start understanding it & today I would urge every non-finance person to try to understand it with an open mind.

Our Highlight of last quarter was our successful second CAP Compliance-Complete Conference in the last quarter in March. What made me happy was to see 70 participants engaged through the day, but what made me happier was to see so many of them from the previous year back again this year. The only finance we had in that conference was adapting the number game of Housie to 50 favourite words of NGOs, a game well played & enjoyed.

The conference also felicitated our CAP compliance Complete Certificate achievers. After an entire year of working hard at their compliance documents and polices, it was a sigh of relief and sense of pride for all of them. As starts the new year, we start with our next 5 NGOs in the Compliance programme. We wish them perseverance to not give up, determination to do their best and of course all good wishes. 

The Compliance Certificate achievers with the CAP Team

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 Our guest editor Pradeep Mahtani is a Chartered Accountant. He was CEO at HelpYourNGO.com (Feb 2013-Apr 2017), a portal that shows standardised and comparable financials of 650 NGOs. Prior to that, he was a well recognised equity analyst with Citi, J.P. Morgan, Jardine Fleming and ASK-Raymond James.

Guest Editor - Pradeep Mahtani

“When Meher asked me to be Guest Editor and focus on the theme of Finance for this quarter’s issue, I wasn’t sure what it entailed. Frankly I wasn’t sure if I could pull it off.

Finance is certainly important for NGOs, but except for the large and well established ones, most struggle with it.

I analysed more than 600 Audit Reports at HelpYourNGO and in a vast majority of cases the Audit Reports gave rows of data that had to be sifted through, and categorised, to make them coherent. At the other end of the spectrum were NGOs that did not provide any financial data, not in the Annual Report, nor on their websites. Queries we sought, especially from the smaller NGOs, had to be clarified with their Auditors.

To achieve the aim of this issue to cover many aspects of our theme 'finance', we reached out to grantmakers, NGOs, and Intermediaries to get various perspectives. We are grateful to those who responded, and their insightful views. Some interesting aspects come to the fore – NGOs and Corporates need to speak the same language; Corporates should treat the relationship as an equal partnership, support NGOs in being more financially transparent, and connect with each other more to share their learnings.

I am grateful to Noshir and Meher for their constant support, and guidance in helping me plan, reach out, and edit this theme. It turned out to be a little more work than I thought, but it was fun. The enjoyable part was reading and editing the insights of the experts who sent in their contributions. We hope you enjoy reading the issue.“

Above is the editorial of the latest newsmgazine, If you have requested a print copy it has been posted to you. Alternately all copies are available on The CAP Website .