Funding story: Social auditing

A report from the Social Audit Network says funders want social accounting to become a more widespread practice.

Social auditing, which enables organisations to measure their performance in non-financial terms, has become a fairly widespread tool for voluntary sector organisations in the UK. A recent report from the Social Audit Network makes the case for social auditing and accounting to become a common way of presenting information to funders (Third Sector, 25 June).

Co-written by John Pearce and Alan Kay, Really Telling Accounts is based on evidence drawn from funders in Scotland and the north of England. Many said they were in favour of a new, mutually agreed form of reporting - partly because they wanted as much information as possible and resources for getting that information were increasingly under threat.

"People cannot always afford to pay for external evaluations," says Kay. "They would like an organisation to be responsibly collecting information into social accounts that can be independently audited and examined by the funder."

The resource issue is even more acute for grant recipients. Reporting back to funders can take up a disproportionate amount of time and resources, particularly for smaller organisations. "If you have multiple funders, you end up using a huge amount of time reporting in different ways," says Kay.

Kay stresses that social auditing is not the same as evaluation: "Evaluations often disempower, because they are done using people from outside. Social accounting puts an organisation in charge of its own reporting, using its own criteria."

The report says it is important to maintain that independence and prevent social accounting from becoming funder or investor-driven.

It also says that funding social auditing would be easier if the practice were to be made compulsory, because funders cannot query unavoidable costs.

"It's extraordinary that organisations that have a social purpose as their goal do not keep a constant and internal track on how they are performing against their objectives," says Kay.

Getting social accounting built into the funder relationship would be a step towards changing that.

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