Financial Management in the Voluntary Sector: New Challenges

Financial Management in the Voluntary Sector: New Challenges

Financial Management in the Voluntary Sector: New Challenges

Financial Management in the Voluntary Sector: New Challenges


This work focuses on the distinctive aspects of financially managing the voluntary organization. While there are many similarities to the management of the private sector, in particular, financial management of small businesses, this book identities and explains the specialist aspects of charity finance.


The sponsored chartered accountancy publication Financial Reporting by Charities (Bird and Morgan-Jones 1981) can arguably be cited as the authoritative beginning of the modern era for charity accounting practices. As Professor Gambling and his colleagues state:

[it] … was the first systematic study of the charitable sector by accountants, certainly in recent years.

(Gambling et al. 1990, p. 8)

We would not disagree with this pronouncement. Prior to this first modern major research study into charity accounting there had been a number of charity accountant practitioners who had published on issues pertaining to the specialist nature of charity accounts. Most notable are Manley (1977, 1979), Fenton (1980) and Sams (1978). In the United States, thirty years before the Bird research, there was the defining work of Vatter (1947). Vatter's published doctoral thesis had laid out the principles of fund accounting upon which modern charity accounting and the SORP is now based. Bird's work, however, ranks as important for three reasons. It is the first milestone in the development of modern charity accounting in the United Kingdom as it leads directly to the first Charity Statement of Recommended Practice (SORP). Second, the work is in the finest tradition of academic research in being critical of the subject matter it looked at. Third, a follow-up study (Bird 1986) was based upon empirical research, which has enabled the study to be replicated and tested to see if the findings are still applicable (Williams and Palmer 1998). What is particularly interesting is the timing of the report. In the introduction to their 1981 discussion paper the authors state:

the whole area of private non-profit organisations seems to have been neglected by accounting researchers by comparison with business.

(Bird and Morgan-Jones 1981) . . .

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