The impetus for prioritising money over mission in charities is increasingly pertinent as public sector austerity progresses in the UK. Mid size charities-who are heavily reliant on grant funding-have experienced proportionately greater challenges to austerity than larger entities. A substantial part of accountability efforts in mid size charities are directed towards funders, where funder imposed frameworks and measures may direct charity attention away from social mission towards funder needs, causing mission drift. Four charity case studies, and grant funder interviews were conducted to investigate how charities can pursue social mission in a challenging funding environment. This paper shows that charities can protect social mission despite high dependence on grant funding, but also provides evidence of susceptibility to mission drift in cases where the balance between money and mission changes. Charity accounting systems display pertinent funder influence. A resource dependence perspective is utilised to highlight the complexity in assessing dependence of charities in a challenging environment and demonstrates the extent of funder influence in accounting and performance systems in these charities. However, charities employ strategies to cope with external requirements enabling them to retain mission focus.

In this paper we assess the different contributions to public sector accounting research in recent decades. We draw on Burrell and Morgan’s (1985) framework to study two distinct aspects of public sector accounting: first, the Private Finance Initiative/public-Private Partnerships (PFI/PPP); and second, budgets in public sector institutions. While PFI/PPP is a recent phenomenon, budgeting in the public sector is often regarded as the fundamental element of financial managemeni in public services. This paper explores whether there are differences in motivation in research in these different aspects of public sector accounting.