CPA Canada offers guidance to help not-for-profit directors operate a social enterprise
TORONTO, Oct. 20, 2014 /CNW/ - Charities and not-for-profits organizations (NFPs) can turn to a new publication from the Chartered Professional Accountants of Canada (CPA Canada) for guidance if they are considering or already conducting activities through a social enterprise.
20 Questions Directors of Not-for-Profits Should Ask About Social Enterprise identifies key concepts in the burgeoning sector. The term "social enterprise" encompasses a wide range of meanings but the basic requirement is that the organization, operation, activity or program must have a socially beneficial purpose that is achieved through commercial or business like-activities.
Often, the intention is to generate sustainable revenue to avoid needing to rely entirely on traditional sources of philanthropic funding such as government grants and public donations.
The CPA Canada publication gives directors a better understanding of the questions they face in establishing, running and, if required, ultimately exiting a social enterprise.
"Directors need to know that with possibilities come significant challenges," stresses Gigi Dawe, a principal with CPA Canada focusing on corporate oversight and governance. "The experience of many board members in the not-for-profit world may only partially prepare them for the unique balancing of priorities and stakeholder interests that arises in the social enterprise context."
Authored by Andrew Valentine, LLB and partner, Miller Thomson LLP, the publication notes that historically, there has been a high failure rate associated with social enterprises.
"Therefore, it is important for the board to perform appropriate due diligence," explains Valentine. "Considerations such as determining operational goals and priorities, funding requirements and sources, a business plan and budget, and a control structure are all vital to establishing a financially sustainable organization."
Some of the issues addressed in the CPA Canada publication include measuring success, the qualifications and skills desired in social enterprise board members and the pros and cons of having paid or volunteer staff.
20 Questions Directors of Not-for-Profits Should Ask About Social Enterprise is available for download at cpacanada.ca/socialenterprise.
About CPA Canada
Canada's accounting profession is uniting under a new single designation, Chartered Professional Accountant (CPA). The profession's national body, Chartered Professional Accountants of Canada (CPA Canada), represents and supports more than 190,000 members across the country. CPAs are valued for their financial and tax expertise, strategic thinking, business insight, management skills and leadership. CPA Canada has consolidated the operations of three national accounting bodies: The Canadian Institute of Chartered Accountants, the Certified General Accountants of Canada and The Society of Management Accountants of Canada. CPA Canada conducts research into current and emerging business issues and supports the setting of accounting, auditing and assurance standards for business, not-for-profit organizations and government. It also issues guidance on control and governance, publishes professional literature and develops certification and continuing education programs.
SOURCE: CPA Canada
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