If fund accounting were a screenplay, the working title would be "Sarbanes-Oxley Meets the Baby Boomers." It is a curious time for charitable organizations, because they are faced not only with the prospect of enormous growth in endowments and contributions, but with demands for greater accountability and compliance measures to help manage that growth.An estimated $10 trillion will pass from the Baby Boom generation into charitable organizations from now until 2050. Intersecting this increase in giving is a nation with a growing obsession for accountability. In the wake of the stock market bust, the energy scandals, the Internet scandals and a recession, people want an unparalleled level of transparency in every aspect of accounting.
What this means for charitable organizations and the accountants who assist them isn't just that they may face greater regulation in the future, though the industry has already seen new requirements from the Financial and Governmental Accounting Standards Boards for more complete disclosure. More important is that this wave of accountability will force changes within organizations - adding higher compliance costs, and demanding more attention to internal controls. It will likewise drive a demand for better decision support and analytical software. And it will alter the ratio of pass-through dollars to costs.
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