In pursuit of the UN’s Sustainable Goals, international donors are channeling unprecedented amounts of money through local organizations.
While programs are being funded and progress is being made, too often the smaller partners fail to satisfy their donor’s accounting requirements – requirements that are necessary to fulfill a donor’s fiduciary responsibility.
Without clear and accurate financial reports from their small partners, donors hesitate to disburse the larger funds necessary to scale up activities. Thus, there are times when small partners may lose their funding entirely.
Currently each donor has a different ‘system’ of accounting and financial reporting that they require from their small grassroots partners. They are often ad-hoc and incomplete because traditional accounting is just too onerous to teach to small partners.
This situation places an unfair burden on community organizations, who have multiple donors (sequentially or simultaneously) and are too often asked to comply with these differing, incomplete systems.
A PROMISING SOLUTION
What would the adoption of a single simplified accounting system mean to both donors and small community organizations?
- If donors agreed to a single simplified accounting and reporting system, and taught it to their small partners, their partners could implement this system for each subsequent donor.
- Continued use of the system would build institutional capacity to accurately and transparently account for donor funds.
- Trust would increase and with it a greater likelihood that programs could be scaled up.
- The acceptance of a single system by donors would allow for economies of scale – efficiencies in the widespread training on, and adoption of, the system.
- In-person trainings could be supported and supplemented by instructional videos, live webinars, on-line forums and a ‘help line.’
- Community organizations, all using the same system, could participate in peer-to-peer support, both in person and possibly on-line.
- A worldwide community of practitioners would be established.