MADD situation shows charities have many stakeholders

Recently, the findings from an investigation by the Toronto Star into charities have been released in the paper and they are not good for many charities, primarily MADD (Mothers Against Drunk Driving) Canada.

The Star found that the charity spends only about 19 cents for every donor dollar on programs designed to help victims of drunk driving and educate the public. This contradicts the information provided to potential donors, which claims MADD spends nearly 84 cents of every dollar on those programs.

Not surprisingly, there has been a substantial uproar amongst donors in light of these revelations, and the situation illustrates clearly just how many stakeholders there are for non-profit, charitable organizations like MADD.

Public companies have many users of their financial statements – both current (finite in number) and potential (pretty much infinite) investors and creditors. They are subject to intense scrutiny and pressure to meet earnings expectations. High profile charities are subject to the same pressures, but naturally with a focus on charitable works performed, rather than net income.

This is relevant to me because next week I’m going to be planning and conducting an audit of a new charity client of ours, and it ratchets up the pressure on my ability to plan a thorough yet efficient set of procedures to gain adequate assurance on the financial statement areas.

It’s exciting at the same time though to be involved in some way with an organization that is doing good in the world.