Negotiating for survival: Balancing mission and money

Abstract

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.

Public services and charities: Accounting, accountability and governance at a time of change

“…This both highlights the influence of socio-economic factors on the evolution of PMSs, and the power of salient external stakeholders to divert focus from what might be seen as key mission objectives within the organisation (and by the general public). Similar funding pressures were examined in much smaller organisations in Scotland (Henderson & Lambert, 2018). Again the influence of funders was evidenced, along with the susceptibility to mission drift in the budget-constrained environment, as was the influence of key funders on the evolution of the PMSs.…”

A conceptual model of accountants' communication inside not-for-profit organisations

“…NFPs' resource constraints are a continual challenge (Irvine, 2010;Valentinov, 2010) as they face a more diffuse and complex political environment than businesses. Donors' expectations and government scrutiny of NFPs' tax-exempt status, along with funders' requirements, add to operational challenges (Henderson & Lambert, 2018;Renz & Herman, 2016). When contrasting FPs and NFPs, it has been found that NFPs exhibit greater diversity in the services offered, their missions, consumers and stakeholders (Beck, et al, 2008).…”

Chief financial officers’ perceptions of their roles inside nonprofit organizations

“…They offer a greater diversity of services at prices often below market values (Beck, Lengnick‐Hall, & Lengnick‐Hall, 2008). Nonprofits often rely on donations and grants to supplement their revenue while they simultaneously face pressure to prioritize finances over mission due to public sector austerity measures (Henderson & Lambert, 2018). The aforementioned nonprofits’ characteristics exacerbate the financial constraints under which they operate.…”