Re: why public accounting is important

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On Tuesday 08 April 2003 08:44, Steve Hutton wrote:
> In article <[email protected]>, Aaron J. Seigo 
wrote:
> > to say all organizations that are not for profit should be financially
> > transparent to the point of opening their books for all to see is an over
> > simplification and a bit naive.
>
> Certainly there are degrees of organizational transparancy, both
> financial and operatational.  There are shades of gray between
> no information at all and "opening their books for all to see", no?

couldn't agree more =)

> Indeed there are many possible strategies with regard to openness
> in organizations that are financed through donations.  An interesting
> question is how does such an organization measure its success?  My
> primary measurement would be how much money it can put to use for
> its cause, while still maintaining the highest level of organizational
> integrity.

not just how much money, since it's easy to spend volumes of cash, but the 
resulting benefits of those spent monies. an organization may spend more 
money on itself and less directly on its cause, but in doing so increase the 
effectiveness of each dollar spent for its cause. and vice versa. results are 
everything.

and when an organization is not producing results, then it needs to be 
reinvented, rethought or abandoned. that does not automatically mean 
financial transparency, though it also may very well exactly that. 

> Now my question is which openness strategy will lead to the highest
> level of success by this measurement?  Obtaining small donations up
> front, and following policies aimed to protect the interests of
> those initial donors?  Or perhaps structuring the organization so
> that it contiues to attract donors in the future?

perhaps both... really depends on which organization we're talking about. if 
it is a Microsoft funded "benchmarking" company or a political "think tank" 
the best bet may be pandering quietly to its primary/only benefactor. if the 
organization is a populace movement, it should probably market itself to the 
public. in either case, this probably has more to do with marketing what it 
is and has been doing than with publishing bank statements, which was the 
original point of conversation.

> It might be interesting to see which of these strategies is more
> widely used and which tends to be more successful amongst the
> general business community.

a good first step would be to court the general business community ;-) 
sometimes an organization is demonized for being opaquely evil when it is 
simply suffering from a spate of inneffectiveness brought on by <insert 
reason here> and that that is what should be remedied. if that remedy is 
making the bank statements public, by all means do so! if that remedy is to 
perform publicly visible acts of goodness, by all means do so! if that remedy 
is to ally more closely with industry influencers, by all means do so!

hmm.. you know, i have this strange feeling that we're all talking about a 
particular organization, witout doing so specifically... if that feeling of 
mine is accurate, then i'd like to suggest that there may indeed be measures 
underway to identify and rectify outstanding issues.

- -- 
Aaron J. Seigo
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