Public Money & Management

PMM Theme: The Nonprofit Sector in a Fast-Changing World

Charities, nongovernmental organizations (NGOs) and nonprofit associations (together, hereafter, referred to merely as ‘nonprofits’) are pervasive in our society. The sector consists of an amalgam of organizations that are not-for-profit and driven by missions focused on delivering public benefit. It comprises a mixture of different groups, for example small general local charities, large well-known national charities, membership-based nonprofit associations, overseas development and aid organizations, universities, credit unions and trade unions (Bridgeland et al., 2009; Enjolras et al., 2018). They are (or at least should be) very different from either the private or the public sectors in terms of orientation, motivation, activities, sources of funding and contribution to the public good. Often, they are funded by individuals or organizations that receive no direct economic benefit from their financial support. They make distinctive and widely-recognized contributions to the public good by building social capital in civil society, often providing a foundation for ensuring social cohesiveness. As such, they are organizations to be valued, nurtured, protected and encouraged by the whole of society; by those who receive the benefit of their activities, by those who work or volunteer in these organizations, and by those who, in the spirit of altruism, seek to provide much-needed funds to generate positive change in society.

Regardless of their structure or size, from a societal viewpoint, it is generally expected that these organizations will both ‘do good’ (create positive change) and ‘be good’ (spend wisely, act ethically) (Hyndman, 2018). While these expectations hold, society continues to place trust in and support them; when such expectations don’t hold, trust is lost and damage results (Hind, 2011; Charity Commission, 2018 and 2024; Hyndman & McConville, 2018). Yet, despite their importance to the well-being of a civilized, cohesive and caring society, issues of trust, ethics, legitimacy and competency often emerge as barriers to the growth and development of individual organizations within the sector and, indeed, the sector as a whole (Farwell et al., 2019). Scandals, fraud, inappropriate governance arrangements, poor regulation, inadequate accountability and transparency, inefficiency, poor management practices, mission drift and the reading across to the sector of highly- questionable business practices, are examples of dangers that have the potential to undermine faith in the sector (Hyndman et al., 2021). In addition, the sector is fragile, with organizations (and parts of the sector) often being disproportionately affected by major changes in their environment, for example via adjustments to reporting and governance, rapidly emerging funding challenges, and national and international existential crises that increasingly appear to emerge and take hold with speed (McMullin & Raggo, 2020; Green et al., 2021; Plaisance, 2022; Lambert & Paterson, 2024).

Given this, this Public Money & Management (PMM) theme aims to provide a timely overview of issues (many of them emerging or changing) that impact on the future of the nonprofit sector and influence, among other things, its shape, size, performance, impact, accountability, governance and ability to raise funds. Often, necessary (or enforced) changes will require the sector to reflect on how organizations are asked (or encouraged) to operate, and how they interact with, and manage, relationships with key stakeholders. Consequent adjustments have the potential to influence the abilities of organizations within the sector to retain mission focus (and avoid mission drift), build and maintain resilience in the face of crises, create meaningful and understandable forms of accountability, and enhance (or possibly avoid undermining) key stakeholder trust and confidence.

We invite the offer of empirical and theoretical contributions using a wide variety of research perspectives and approaches, and particularly encourage papers that reflect on the academic/practice interface. Additionally, it is anticipated that this PMM theme will include inputs from a range of non-academic sector specialists, particularly regulators, representatives of umbrella groups linked to important segments of the nonprofit sector, and other key commentators. This will facilitate an enriched pragmatic debate and discussion of the challenges that the sector faces and likely strategies that will be useful in moving forward.

Topics suitable for this PMM theme include, but are not limited to:

• The increasing need to build capacity and resilience in order to respond quickly and appropriately to crises.
• Modifications to (and logic regarding) changing legislation, regulation and formal accountability mechanisms.
• The use and development of technologies to deliver services, measure impact and manage communication channels.
• The co-production of services (and/or contracting for service provision) with government, other nonprofits or businesses.
• Accounting for, and accountability to, volunteers.
• The continuing effects of austerity and cost-of-living emergencies.
• Sustainability and nonprofits.
• Shifting public perceptions (and expectations) regarding appropriate ethics, values and behaviours.
• The impact (both positive and negative) of new performance-reporting frameworks.
• Pressures, and results of pressures, to become more business-like.
• Risk identification and risk management in the sector.
• Planning for crisis, including appropriate reserves policies.
• Fundraising strategies and their ethical appropriateness.
• Shifting governance structures within the sector.

(contact Guest Editors for reference list)

About the Guest Editors

Noel Hyndman: Professor Emeritus, Queen's University Belfast, UK; Honorary Professor, Durham University, UK

Noel was Professor of Management Accounting (and Director of the Centre for Not-for-profit and Public-sector Research) at Queen’s University in Belfast between 2002 and 2020, having previously held a chair at the University of Ulster. He also held visiting professorships at the University of Ottawa in Canada and the University of Sydney in Australia. A Fellow of the Chartered Institute of Management Accountants, he was awarded a PhD for his research in financial reporting by charities. Since 2006, Noel has been a member of the Charity Statement of Recommended Practice (SORP) Committee that has a major input to the setting of accounting and reporting requirements for UK and Irish charities. In addition, he was a Non-executive Director of the Northern Ireland Audit Office and Chair of its Audit and Risk Assurance Committee between 2019 and 2022. He was awarded the British Accounting & Finance Association’s (BAFA’s) 2023 Life-time Achievement Award. His main research interests have centred on performance measurement, performance reporting, management accounting and accounting change in charities, public-sector organizations and not-for-profit organizations. He has an array of publications and has acted as editor (and been on the editorial boards) of a number of journals, and, as well as currently being a board member of Public Money & Management, he is also Associate Editor of both Financial Accountability & Management and Abacus.

Mariannunziata Liguori: Professor, Durham University, UK

Mariannunziata Liguori is Professor of Management Accounting and co-director of the International Centre of Public Accountability at Durham University Business School, where she moved after having worked at Queen’s University Belfast. She was awarded a PhD by Bocconi University in Milan, where she previously worked. Mariannunziata is Chair of the BAFA’s Public Services and Charities SIG and editorial board member of the Accounting, Auditing & Accountability Journal, Financial Accountability & Management and the Journal of Public Budgeting, Accounting & Financial Management. Her main research interests centre around accounting change and performance measurement in public-sector and non-profit organizations. She has published in a number of leading journals in the field of public-sector and charity accounting, such as Accounting, Auditing & Accountability Journal, Financial Accountability & Management, and Nonprofit and Voluntary Sector Quarterly.