Methods of financial statement analysis for non-governmental organisations
2019
Zdanovskis, K., Latvia Univ. of Life Sciences and Technologies, Jelgava (Latvia) | Pilvere, I., Latvia Univ. of Life Sciences and Technologies, Jelgava (Latvia)
Public participation is needed for nongovernmental organisations (NGO) to function and exist, as the public plays the role of investors by supporting the NGOs financially and thereby providing a quorum needed for the organisation to operate and make decisions. NGOs provide services for defending public interests, and the NGOs members carefully assess their gains from involvement or participation continuation in public organisations, just as if choosing a good or service for consumption. The level of society activity in NGOs sector is low in Latvia comparing with the Western world. To increase it, it is required to contribute to the public’s trust and NGOs transparency. Organisational performance analysis is one of the ways how to provide members with information on performance and funding use, as the members of NGOs wish to be sure that their membership fees and other financial support are effectively used to achieve their goals and defend the interests of their members. The research aims to analyse financial analysis methods used in the NGO sector. The research tasks were set: 1) to analyse the substance of financial analysis of NGO, and 2) to identify shortcomings for a comprehensive analysis of NGO. The research has found that as public participation in NGOs increases, it becomes increasingly important to provide financial transparency in the NGO sector in order to contribute to the public’s trust in the NGOs and make it possible to verify the consistency of funding use with the organisation’s goals and performance.
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