20 Questions - Canadian Institute of Chartered Accountants

Appendix 1 y continued zMany not-for-profits are quite entrepreneurial – this is increasingly the case asgovernment support is reduced or matched to funds raised or earned by theorganizations. Like companies, they use business techniques to improve theirmarketing, service delivery and customer service. On the other hand, businessesare becoming aware of the importance of stakeholders other than shareholdersand recognizing the value of practicing social responsibility.The accounting rules for not-for-profits are, for the most part, similar to thosefor businesses. The differences are mostly related to the treatment of restrictedand unrestricted funds which correspond to surplus in corporations. Any organizationneeds to have access to financially literate individuals who understandthe specific accounting requirements of the field in which they operate.Not-for-profit organizations generally have a little tolerance for deviationsfrom budgets and low indebtedness on the balance sheet as compared to manycorporations.All organizations need ways to measure success. Although only corporations usemeasures related to shareholder value (earnings per share, return on investment,dividend yield, share price, etc.), both they and not-for-profits use many othermeasurements – both financial and non-financial.24