Evaluation of Reporting and Performance of Charities and Societies in Ethiopia

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Addis Ababa University


For the purpose of this paper, Charities and Societies in Ethiopia mean humanitarian private organization, using its own resources, not profit making and participating to fulfill government efforts with a view to eliminate poverty. There are 1630 registered Charities and Societies in Ethiopia as of May 31, 2010. The major intervention areas of CSs in Ethiopia are; general health, education, agriculture, water and sanitation, child development, HIV/AIDS, and others focused on child and women rights. Evidence compiled by NBE shows that the global resources mobilized by the voluntary sector are immense and this has benefited the country’s economy significantly. Between 2004 and first-half of 2008 the total of NGO transfers amounted to US$1.78 billion. The annual break-down of this is greater than earnings from the export of coffee (NBE 2007; 2008). Financial statements prepared by CSs serve as a means to communicate with funding agents, government and other stakeholders. In preparing basic financial statements, CSs in Ethiopia use both generally accepted accounting principles (GAAP) and international financial reporting system (IFRS)/IAS. US GAAP is highly applicable and there is a tendency to use IFRS/IAS in the future. Most CSs in Ethiopia keep records of non- exchange transactions, prepare the three basic financial statements prescribed by FASB, and the statements are continuously validated by independent body. Performance evaluation is undertaken based on major areas; financial management, income independence, board governance, program cost, output and outcome measure, and effective use of volunteer service. For most organizations, a higher percentage of resources spent on program services than on management and fundraising is considered a positive performance indicator. According to the research result most CSs in Ethiopia demonstrate above average performance



Charities and Societies in Ethiopia