in
charitable institutions
Author
:
Karin Snijder
Date
:
June 2010
Organization
:
University of Groningen
Specialization
:
Organizational & Management Control
Abstract
This thesis concerns financial performance in charitable institutions. Charitable institutions are nonprofit organizations which serve a multitude of constituencies and whose goals and needs are heterogeneous. Financial resources are acquired by means of fundraising. To measure whether an institution is competent in generating funds and whether it uses its financial resources appropriate, a model is developed in which ratios for efficiency and effectiveness are included. Also, a regulation perspective is added to the model to include rules and guidelines to which charitable institutions need to comply.
Financial reports of 11 Dutch charitable institutions are discussed to measure and evaluate financial performance based on the developed model. Correlation analysis is performed which shows several significant correlations. The correlations that meet expectations are the significant positive correlation between an efficiency measure and an effectiveness measure and the significant positive correlation between an efficiency measure and the increase in contributions in the same year. Interpreting the results is difficult because there is a lack of comparative material from previous research, therefore the 11 institutions are compared to each other. Future research should focus on more extensive analysis of the performance measures.
Preface
This thesis is the result of many months of work. I started writing my thesis in 2008. And after taking a one-year break, now I have finally finished my thesis and I am graduating. It has been written as a finalizing assignment to obtain the degree of Master of Science in Business Administration at the University of Groningen.
The university provides students who study Business Administration a high degree of freedom in choosing a subject for their thesis. I have always had an interest in the nonprofit sector, because the primary focus is not on making profit. Therefore I decided to choose a subject that is focused on organizations that belong to this sector.
Performance is something that applies to all kinds of organizations. Financial performance is important for organizations to ensure continued existence. It is not measured easily in every organization. I find it interesting to explore how nonprofit organizations deal with measuring financial performance while there are no clear yardsticks. Nonprofit organizations contain different groups that have different characteristics. By choosing one of these groups, it became easier to draw conclusions based on the research that holds for all of the organizations. And because the spending of financial resources of charitable institutions is often up for discussion, I decided to focus on charitable institutions.
Writing a thesis is primarily an individual task. However, completing a thesis is not. I could not have finalized this thesis without the feedback and support from many people. First of all I would like to thank my supervisor dhr. Huijgen for helping me and providing me with feedback. Furthermore, I would like to thank my family and friends for their motivating words when I needed them and their support along the way. And of course for providing the necessary distraction between work and study: thank you!
Table of contents
Abstract I
Preface II
Table of contents III
1. Introduction p. 1
2. What are the main aspects that distinguish charitable institutions from profit
organizations? p. 4
2.1 Definitions
2.2 Differences and similarities 2.3 Conclusion
3. Which performance indicators are useful to evaluate financial performance? p. 9
3.1 Measuring performance 3.2 Balanced scorecard 3.3 Ratio analysis 3.4 Developing a model 3.5 Conclusion
4. What legal conditions and constraints characterize the financial reporting? p. 14
4.1 IASB & FASB
4.2 National rules and guidelines 4.3 The requirements of the CBF 4.4 Criticism on the CBF 4.5 Conclusion
5. What is an appropriate model for measuring performance of fundraising in
6. How well is the financial performance of Dutch charitable institutions? p. 22
6.1 Charitable institutions 6.2 Results
6.3 Interpreting the results 6.4 Correlation analysis 6.5 Discussing the results 6.6 Conclusion
7. Is there a relationship between financial performance and the amount of
raised funds? p. 30
7.1 Research method 7.2 Results
7.3 Discussing the results 7.4 Conclusion
8. Conclusion p. 38
8.1 Conclusions 8.2 Research question
8.3 Recommendations & shortcomings
Literature p. 42
Appendices p. 45
Appendix 1 - Absolute values of variables for descriptive analysis
1.
Introduction
Every year numerous volunteers collect money for charitable institutions. Many people donate money, sometimes without knowledge about the mission or objectives of the charitable institution or what their money will be spent on. An example is the tsunami in 2004 in Southeast Asia. People donated money without detailed knowledge about the use of the money. Afterwards it appeared that part of the funds were not spent. Therefore people became reluctant to donate money to charitable institutions. People who donate money are concerned with how their money is spent but also with the way an institution communicates about fundraising. Fortunately, there are several organizations in the Netherlands who supervise fundraising of charitable institutions. These organizations have drawn up rules and regulations to which charitable institutions have to comply to receive a seal of approval. This seal indicates that the charitable institution is inspected on a regular basis and that it spends a sufficient part of donations on the stated objectives. When people donate money to charitable institutions, they at least want to know how their money is spent and whether the charitable institution has enough financial resources to maintain continued existence. It means that measuring financial performance is necessary.
However, financial performance of charitable institutions is difficult to measure which is shown by drawing a comparison between profit organizations, nonprofit organizations and charitable institutions.
The financial objective of a nonprofit organization is to have a small excess of revenues over expenses. This small excess is needed for financing working capital (Anthony, 1995). The revenues of a charitable institution are primarily acquired by means of fundraising. Fundraising is important for an institution to attract members and supporters who donate money which is used for fulfilling the mission and the stated objectives. There is no immediate return on the investment (Speckbacher, 2008) and therefore people are only willing to donate if they think their money is used appropriately. While in profit organizations the bottom line of the income statement is important, in nonprofit organizations (including charitable institutions) there is no clear yardstick against which performance can be measured (Micheli & Kennerly, 2005).
In recent years research into the way of measuring performance in nonprofit organizations surged. Researchers tested different models and found indicators for measuring performance in nonprofit organizations. Often models that are used in profit organizations were slightly adjusted to make them appropriate for nonprofit organizations, for example the balanced scorecard (Speckbacher, 2003). Sometimes new models were developed by integrating several existing models already applied in nonprofit organizations (Landry et al., 2000). The focus in this thesis is on charitable institutions. I will examine whether models that are appropriate for nonprofit organizations in general can also be applied in charitable institutions. My research question is;
What is an appropriate method for measuring financial performance in charitable institutions?
with improving the quality of financial reporting for private organizations. Their executive board, the “Raad voor de Jaarverslaggeving”(RJ), provides recommendations about financial reporting practice. Once a year it publishes a new edition of guidelines for preparing annual reports. For charitable institutions, the most important guideline is RJ650 which concerns fundraising. This guideline is prepared in cooperation with the “Centraal Bureau
Fondsenwerving” (CBF). This institution has drawn up regulation to which charitable institutions
have to comply in order to receive a seal of approval. This indicates that the institution is being inspected on a regular basis with regard to management, expenditures, fundraising and reporting. The application of RJ650 is included in the regulation of the CBF. Compliance to this guideline is an important condition for receiving the seal of approval.
2.
What are the main aspects that distinguish charitable institutions from
profit organizations and nonprofit organizations?
Most organizations in society are profit organizations. Although there are several definitions of a profit organization, one recurring aspect is that its main goal is to make profit. In recent years, more and more nonprofit organizations are established. Their primary goal is anything other than making profit (Merchant & van der Stede, 2007, p.781). Throughout the years many studies have been conducted regarding profit organizations and nonprofit organizations. In these studies several definitions for profit and nonprofit organizations are used and these definitions will be explored. Nonprofit organizations include charitable institutions which have specific characteristics. A definition of charitable institutions will also be presented.
After defining the three types of organizations, the similarities and differences between profit organizations, nonprofit organizations and charitable institutions will be discussed. The differences relate to general aspects, for example the goals of the organization, but also to more specific aspects, for example acquiring financial resources.
2.1 Definitions
Organizations can be divided into two sectors: the public sector and the private sector. The private sector contains organizations aiming to make profit: the profit organizations. The public sector is more diverse and can be divided into different groups. Religious organizations, governmental organizations and charitable institutions are examples of organizations in the public sector.
that profit organizations use equal measures for assessment and delegation. Financial variables are used for measuring performance and managers decide how to guide the organization in the aimed direction. Merchant & van der Stede (2007, p.781) find one of the main characteristics of profit organizations is that they have an outside equity interest. This is related to the first characteristic of Speckbacher (2003) that owners provide capital which an organization needs and in return for that investment the owners have the right to manage the organization in the chosen direction.
The purpose of nonprofit organizations is anything other than making profit (Merchant & van der Stede, 2007). Many studies are conducted concerning nonprofit organizations (Anheier, 2000; Herman & Renz, 1999; Kaplan, 2001 for example); however all studies use a different definition. Therefore it is necessary to formulate a definition of nonprofit organizations and include important characteristics. A definition can be formulated on different bases according to Anheier & Salomon (1997). The four definitions they discuss are the legal definition, the financial definition, the functional definition and the structural-operational definition. Anheier & Salomon prefer the structural-operational definition. This definition uses key characteristics which all nonprofit organizations have in common: they are institutionalized to some extent, they do not distribute profit, they are self-controlling and participation is voluntary. Although the definition captures the essence of nonprofit organizations, these aspects also relate to some profit organizations. Furthermore, the problem with these definitions is that they, to some extent, relate to nonprofit organizations but not to all nonprofit organizations (Anheier, 2000) which is the essence of a definition. This means a more general definition needs to be formulated. Speckbacher (2003) states: “nonprofit organizations are built around a mission, which is hard to measure and they serve a multitude of constituencies whose goals and needs are heterogeneous” (p.268). This definition is rather broad, but captures the essential characteristics that define a nonprofit organization.
Charitable institutions are a specific type of nonprofit organizations. Guidelines are formulated regarding the activities of charitable institutions. One of these guidelines is regulation prepared by the Dutch organization Centraal Bureau Fondsenwerving (CBF). Their definition for a charitable institution is a legal definition:
acquired by means of fundraising for which it turns to society” (Reglement en Bijlagen
CBF-Keur, 2007).
The restriction of this definition is that it is based on Dutch law. In every country there are different laws and to formulate a definition, it is important that it is applicable to all organizations, and not organizations in one country. However, the emphasis of this definition is on the charitable, cultural or scientific goal and on fundraising. Compliance with Dutch law is less important here. A more general definition is that of Anheier & Salomon (1997). They define a charitable institution as “a group of people who join together voluntarily for some common or shared purpose and interact in a spirit of mutuality” (p.32). This definition lacks however the financial aspect, more specific the process of fundraising. This fundraising is important to acquire the financial resources needed to accomplish the shared purpose.
2.2 Differences and similarities
An important difference between profit and nonprofit organizations is the goal of the organization. A profit organization aims at making profit, while achieving financial success is not the primary objective for a nonprofit organization (Kaplan, 2001, p.360). The purpose of a nonprofit organization is usually distracted from the mission which is based on the needs of the constituencies. Success of an organization can be measured by the extent the objectives are accomplished. Therefore success of a profit organization is measured by the amount of profit or the increase in stock price. Success of a nonprofit organization is more difficult to define and should therefore be measured by how effective and efficient the organization meets the needs of their constituencies (Kaplan, 2001, p.353).
Another difference is related to output measurement. The output of profit organizations is easy to measure and is generally the amount of sales. Nonprofit organizations primarily provide services which cannot always be quantified because of the lack of the price-mechanism.
Profit and nonprofit organizations also differ with regard to ownership and reporting. Nonprofit organizations do not have to report to owners, as profit organizations do. Nonprofit organizations report to a multitude of constituencies. Therefore, nonprofit organizations have to comply to much more rules and laws (Merchant & van der Stede, 2007).
closely than profit organizations, where performance is often easier to measure and monitor (Anheier, 2000, p.6).
Nonprofit organizations include charitable institutions. An important difference between nonprofit organizations and charitable institutions concerns fundraising. Charitable institutions acquire their financial resources by means of fundraising. People must be willing to donate money to a charitable institution, although there is no immediate return for the people who donate (Groot & van Helden, 2007). Sometimes a nonprofit organization raises funds for a specific project but this does not immediately mean it is a charitable institution. This makes it difficult to separate nonprofit organizations from charitable institutions. In general, the lack of immediate return for people who donate money is seen as the most important difference between nonprofit organizations and charitable institutions.
Performance management is important for charitable institutions too. The definition of a charitable institution comprises a common or shared purpose. However it is difficult to translate this purpose into measurable characteristics and to explore if money is well spent.
While financial management in profit organizations is the management of expenses and revenues for profit maximization, in nonprofit organizations (including charitable institutions) it concerns cost controlling. In chapter 3 financial performance will be discussed extensively.
2.3 Conclusion
The aim of this chapter was to explore the differences between profit organizations, nonprofit organizations and charitable institutions. First, definitions were formulated. A profit organization distinguishes itself by purpose and ownership. The purpose is making profit and the organization has one or more shareholders whose interests are the leading initiative in managing the organization. A nonprofit organization is built around a mission. This mission serves a multitude of constituencies whose goals and needs are heterogeneous and accomplishing the mission is difficult to measure. A charitable institution is a specific type of a nonprofit organization. In addition to the characteristics of a nonprofit organization, supporting the charitable, cultural or scientific goal and the process of fundraising define the charitable institution.
3.
Which performance indicators are useful to evaluate financial
performance?
In this chapter performance measurement will be discussed. There are different kinds of performance which will be examined here by evaluating different models for measuring performance that have been used in practice. In this thesis the focus is on charitable institutions, therefore all models are evaluated on being appropriate for charitable institutions.
In the previous chapter was explained that acquiring financial resources is one of the key elements that distinguishes charitable institutions from nonprofit organizations. Therefore financial performance will be explored in more detail. The goal of this chapter is to discuss several performance indicators and see if they can be applied to charitable institutions.
3.1 Measuring performance
Measuring the performance of an organization can be interpreted in different ways. One assumption is that measuring performance for charitable institutions is distinct from profit and nonprofit organizations and requires a different performance measurement model (Anheier, 2000).
Studies have been conducted about the application of financial performance models in nonprofit organizations in general (Abraham, 2006; Brooks, 2004; Krishnan et al, 2006 for example). And research has been conducted in charitable institutions apart from financial performance (Beattie & Jones, 1994; Bowman, 2004 for example). Often, performance measurement models are transferred from the private sector and adjusted for nonprofit organizations. The question is whether the complexity of charitable institutions with their multiple constituencies is appropriate for applying an existing model. Anheier (2000) states that charitable institutions can be seen as complex organizations which require a multi-faceted, flexible approach. Therefore transferring models from the private sector would be too simplistic.
Several approaches are in use for measuring performance. The balanced scorecard (BSC) (Kaplan, 2001; Speckbacher, 2003; Atkinson, Kaplan & Young, 2004) for example, is an approach which comprises financial and nonfinancial measures. Another approach is activity-based costing which relates resource expenses to activities activity-based on how much of these expenses are required or used to perform an activity (Atkinson, Kaplan & Young, 2004, p.127). A third approach that is often used is economic value added. This approach is appropriate for evaluating ongoing investments. It uses accounting income on which adjustments are made for example for research and development costs (Atkinson, Kaplan & Young, 2004, p.497). An approach that is used particularly in manufacturing organizations is total-life-cycle costing. As a product moves along the value chain, it accumulates costs. All these costs together are the total-life-cycle-costs (Atkinson, Kaplan & Young, 2004, p.286). Another approach is accounting based performance which comprises residual and ratio measures (Merchant & van der Stede, 2007, p.440). One advantage of these measures is that they are diverse and can easily be measured. The balanced scorecard and ratio analysis (Ritchie & Kolodinsky, 2003) will be discussed in more detail.
3.2 Balanced scorecard
and the mission is placed at the top of the BSC. The four perspectives are maintained, but their position in the model is changed.
Is the BSC an appropriate model for measuring financial performance in charitable institutions? The financial perspective in the BSC is related to the customer perspective. In a charitable institution the role of the customer is not clear: is it the donor who provides financial resources or is it the group that receives the service the institution provides (Kaplan, 2001, p.360-361)? Often, the financial and customer perspective are put in parallel in the BSC.
Financial indicators are not very important in the BSC for charitable institutions, but they can provide information of certain trade-offs (Spekbacher, 2003). The cost of a specific operation for example shows potential donors information about the trade-off between different uses of the financial resources donors provide, so they can decide whether their money is well spent. Therefore, fundraising efficiency is an important aspect to consider. Ritchie and Kolodinsky (2003) define fundraising efficiency as relating outputs in terms of expenditures to stated projects to inputs in terms of contributions.
In general the BSC is an appropriate measure for performance in charitable institutions, but it is less appropriate for measuring financial performance. In the BSC, the focus is primarily on the nonfinancial measures and the position of the mission. Although the outline of the model is useful, its content is less appropriate here.
3.3 Ratio analysis
• total revenues divided by total expenses (fiscal performance)
• direct public support divided by fundraising expenses (fundraising efficiency) • total revenues divided by fundraising expenses (fundraising efficiency) • total contributions divided by total expenses (public support)
• total contributions divided by total revenues (public support) • direct public support divided by total assets (public support)
In this research total contributions are the revenues of fundraising and include direct public support.
Public support is an indicator of an organization’s ability to generate revenues. This involves direct support by means of donating money and indirect support by contributing to actions performed by a third party.
There are some objections against applying these financial ratios in my study. First, the research was conducted on IRS data. This is an agency in the United States that collects taxes. Because tax laws in the United States are different than tax laws in the Netherlands, this could lead to different outcomes. Another objection relates to transferring applied ratios from one charitable institution to another. The research was conducted in universities that raise funds. In the Netherlands, universities do not raise funds on a large scale and therefore they are not typical charitable institutions. If there is doubt about transferring financial ratios from one institution to another because the researched institutions differ a lot, than it is possible to ascribe a certain weight to each of the three categories, when it appears not sufficient attention is given to one of the three categories (Ritchie & Kolodinsky, 2003, p.377).
3.4 Developing a model
It is clear that in an approach for measuring financial performance in charitable institutions the primary objective should be fulfilling the mission. This is what a charitable institution aims to achieve in the long-term. Financial resources are needed and fundraising is used to acquire financial resources. People who donate money want to know how well their money is spent. Therefore, important aspects are fundraising efficiency and effectiveness.
• total contributions divided by money spent on stated projects (R1)
This ratio gives information about the fraction of money spent on projects of the charitable institution that is derived from raised funds.
Effectiveness is whether the organization achieves its objectives (Landry et al, 2000, p.22-23). One of the long-term objectives is fulfilling the mission of the institution. In order to achieve the long-term objectives, short-term objectives are formulated. One short-term objective is acquiring financial resources by means of fundraising. This is measured by the ratios for public support as used by Ritchie & Kolodinsky (2003). Public support is described as an indicator of an organization’s ability to generate revenues from external parties. Wooten et al (2003) conducted research into performance measurement by religious organizations. They examined internal accounting controls and management controls. A few aspects that were important in this respect, are complying with contributors’ desires and encouraging donor support. The latter aspect coincides with public support as Ritchie & Kolodinsky (2003) defined it. This leads to the following two ratios for measuring effectiveness;
• total contributions divided by fundraising expenses (R3) • total contributions divided by total revenues (R4)
The first ratio gives information about how well an institution performs in generating revenues by relating total contributions to fundraising expenses. The second ratio shows which part of total revenues is received by means of contributions and therefore if fundraising leads to an important source of income.
3.5 Conclusion
The goal of this chapter was to discuss several indicators which measure financial performance in charitable institutions. Often, the focus of measuring performance in charitable institutions is on nonfinancial measures, but in my thesis I concentrate on financial measures.
4.
What legal conditions and constraints characterize the financial
reporting?
In the previous chapter ratios for measuring performance were discussed, based on existing literature. In this chapter, a regulation perspective is added. Both national and international organizations will be explored which set up reporting rules and regulation to which private and public organizations have to comply. In the Netherlands, the Stichting voor de Jaarverslaggeving is an institution that prepares standards for financial reporting. Their executive board is the Raad
voor de Jaarverslaggeving (RJ). Another institution that is especially important for charitable
institutions is the Centraal Bureau Fondsenwerving (CBF). The CBF draws up rules and regulations to which charitable institutions have to comply to receive a seal of approval. This process will be explained in this chapter as well as the rights and obligations of the CBF.
Not everyone agrees with the standards, guidelines and the seal of approval. Some critics argue that if standards for financial reporting are implemented, nonprofit accounting will take a step backwards because the quality of the standards is too low (Anthony, 1995). The criticism will be explored in this chapter as well.
4.1 IASB & FASB
There are different institutions that operate internationally with regard to setting up rules and regulations. Two institutions are the International Accounting Standards Board (IASB), and the Financial Accounting Standards Board (FASB). Both establish standards of financial accounting and reporting on which several constituencies rely for financial information to be credible and transparent. Worldwide, over hundred countries require the use of the standards or are converging with them.
Another institution is the International Public Sector Accounting Standards (IPSAS). This institution aims at improving the quality of financial information in the public sector. Therefore it introduced a standardized system of accounting specifically for the public sector to make it easier to assess and compare public institutions from different countries.
4.2 National rules and guidelines
In the Netherlands institutions have to comply to the law in which rules are drawn up for financial reporting, for example the deadline that is fixed for preparing the financial statements (Artikel 2:285 BW). There is an institution in the Netherlands which is focused on the financial reporting of organizations and institutions which are not covered by the standards of the IASB and the FASB; the Stichting voor de Jaarverslaggeving. The foundation is a cooperation between several Dutch organizations that have an interest in financial reporting. The executive board of the foundation is the Raad voor de Jaarverslaggeving. The board draws up guidelines and gives advice about reporting. However, these guidelines are not binding. The guidelines are published yearly in what is called the Richtlijnen voor de Jaarverslaggeving. One of these guidelines relates specifically to institutions that acquire their resources by means of fundraising (RJ650:
Fondsenwervende instellingen). Charitable institutions are covered by this guideline and most
institutions comply to the guideline when they prepare their financial statements. RJ650 is discussed in more detail and the focus is on the aspects that relate to fundraising. The information that needs to be included in the financial report of charitable institutions according to RJ650 is:
• the projects a charitable institution spends money on; • the amount of raised funds that is spent on each project;
• the total contributions that are acquired by means of fundraising; • the amount of total revenues spent on goals stated beforehand;
• an explanation if the raised money is actually spent on the goals stated during the process of fundraising so that donors do not feel misinformed;
• the ratio between expenses and total revenues of fundraising;
• the amount of money that is kept as reserves and the additions and reductions to the reserves;
4.3 The requirements of the CBF
The CBF draws up rules and regulations for charitable institutions and their fundraising. The aim is to improve the raising and use of money and to make sure this process is carried out in a responsible way (guideline CBF, 2007). The CBF issues a seal of approval which charitable institutions will receive if they comply to the rules and regulations of the CBF. Part of it is compliance with RJ650. Before receiving a seal of approval an institution has to exist for at least three years. After that period the institution must enroll for an application and the CBF examines if an institution complies to all rules and regulations. If so, it will receive a seal of approval for a period of three years. The seal of approval indicates that the institution is being supervised with regard to management, expenditures, fundraising and reporting.
The CBF defines fundraising as raising money which is acquired voluntarily and for which no compensation is expected (guideline CBF, 2007). The financial report of the institution must include the amount of revenues spent on projects of the charitable institution and the amount of revenues spent on fundraising. There must be a well-balanced distribution between these two amounts. The expenses may not exceed 25% of the revenues calculated as an average of three years (25%-rule). This requirement is also incorporated in a ratio for measuring effectiveness which was discussed in chapter 3.
Furthermore, the annual report must contain information about management and administrative expenses as well as information about the reserves that are held. Keeping a certain amount of reserves is only permitted in limited situations and this permission needs to be granted beforehand. If the reserves increase significantly because of special circumstances, the reasons need to be explained. The reserves that are used for covering short-term risk to maintain continued existence, may not exceed 1,5 times the annual costs of the working organization. This includes the cost of personnel, the cost of housing, administrative costs and costs made for fundraising.
4.4 Criticism on the CBF
The CBF experiences criticism. Practice has shown that the seal of approval of the CBF is primarily received by large charitable institutions because of the fixed costs of the application for acquiring the seal of approval (Zeekant, 2008). Furthermore, critics argue that the CBF-seal of approval is focused on decreasing costs with their 25%-rule instead of improving transparency by showing in which way money acquired by the fundraising process is spent.
Another problem of the CBF seal of approval according to critics is that the rules and regulations are drawn up and approved by one and the same party causing possible conflicts of interest (Zeekant, 2008). Lastly, some requirements of receiving the seal of approval are not clear and quantified. In the rules and regulations of the CBF it is stated that an institution should focus on an optimal spending of the acquired funds. But what does optimal mean?
A new seal of approval is developed by an other organization; Keurmerk Goede Doelen. This seal primarily focuses on the way the money is spent and the goal accomplishment of charitable institutions. Because enrolling for an application takes little time and money, it is relatively easy to receive and keep the seal of approval (also for smaller charitable institutions) and therefore it increases fundraising transparency for charitable institutions.
Although there are some differences in the approach towards granting a seal of approval, both organizations include compliance to RJ650. When more organizations focus on drawing up rules and regulation more confusion will arise about choosing an organization for applying for a seal of approval. Either way, a charitable institution can always apply for a seal of approval, the rules to which they need to comply differ slightly between the Keurmerk Goede Doelen and the CBF-seal of approval.
4.5 Conclusion
In this chapter the legal conditions and constraints are explored regarding the financial reporting of charitable institutions. Rules and regulations are drawn up by several institutions. Dutch law comprises rules to which institutions have to comply. In the Netherlands the Raad voor de
Jaarverslaggeving is the most important organization regarding the regulation of financial
potential donors. Recently, a new seal of approval was introduced by a second organization: the
Keurmerk Goede Doelen. However, because of the experience and the familiarity of the CBF for
5.
What is an appropriate model for measuring performance of
fundraising in charitable institutions?
After reviewing the literature, a model is developed which is used for measuring performance of fundraising of Dutch charitable institutions. Every aspect is explained and ratios are applied where possible.
Figure 1: Model of measuring financial performance in charitable institutions
• Mission: The financial short-term objectives of the institution.
The institutions’ short-term goals are important as well as where they spend their money on. Therefore the projects that are decided on beforehand are included in measuring performance.
• Fundraising efficiency: How well does the institution utilize its financial resources? This is measured by means of the ratios discussed in chapters 3 and 4;
- total contributions divided by money spent on stated projects (R1)
- reserve for continuing existence divided by the annual cost of the working organization (R2)
Fundraising efficiency
How well does the institution utilize its financial resources?
Fundraising effectiveness
How well does the institution generate revenues by means of
fundraising?
Fundraising reporting
Rules and regulation to which an institution needs to comply.
Mission
These ratios explain the relationship between the revenues and expenses of fundraising and the money that is spent on projects of a charitable institution. If ratio 1 equals 1, all the money that is received by means of fundraising is spent on projects.
Ratio 2 is used for evaluating the efficiency of fundraising and is a requirement that is drawn up by the CBF. The CBF states that this ratio may not exceed 1,5.
• Fundraising effectiveness: How well does the institution generate revenues by means of
fundraising?
This is measured by means of the ratios discussed in chapter 3; - total contributions divided by fundraising expenses (R3) - total contributions divided by total revenues (R4)
Ratio 3 measures how well an institution performs in generating revenues by relating total contributions to fundraising expenses. Ratio 4 helps to evaluate the fundraising qualities of an institution: are the revenues from fundraising a primary source of income?
If ratio 3 exceeds 1 it indicates that there is more money received from fundraising than is spent on fundraising. One of the characteristics of a charitable institution is that its financial resources are acquired by means of fundraising (Reglement en Bijlagen CBF-keur, 2007). This means that the goal of an institution is to receive as much funds as possible and indicates that the higher the outcome of ratio 4 the higher the effectiveness.
• Fundraising reporting: Rules and regulation to which an institution needs to comply. This aspect shows a legal perspective on the fundraising process. In chapter 4 rules and guidelines of RJ650 and the CBF were discussed which are included in the ratios that were established for measuring efficiency and effectiveness. This indicates that the CBF and the RJ endorse the importance of the aspects that will be measured. Fundraising reporting is not measured by a specific ratio but is included in measuring efficiency and effectiveness.
6.
How well is the financial performance of Dutch charitable institutions?
In this chapter 11 Dutch charitable institutions and their financial reports will be discussed. First the charitable institutions involved will be introduced. The focus is on institutions that support medical projects. This is a random choice, but it is important that all institutions are in the same sector for comparing reasons. The financial reports of 2005-2008 will be used and the model which is developed before is applied. At the end of the chapter a correlation analysis will be performed to find out if the used ratios correlate with each other.
6.1 Charitable institutions
There are 11 charitable institutions that will be explored in this chapter. All institutions focus on medical projects. These are:
• Nederlandse Brandwonden Stichting (BWS) • Nederlandse Hartstichting (HS)
• Stichting KWF Kankerbestrijding (KWF) • Maag Lever Darm Stichting (MLD) • Stichting ALS (ALS)
• Stichting Alzheimer Nederland (AZH) • Leprastichting (Lepra)
• Stichting Nationaal MS Fonds (MS) • Nierstichting Nederland (NiS)
• Stichting Fonds Psychische Gezondheid (PG) • Reumafonds (RF)
6.2 Results
The ratios for efficiency and effectiveness are calculated for the years 2005-2008 and the results will be discussed here. The table in appendix 1 shows the values of the key variables included in the analysis and appendix 2 shows the outcomes of the ratios for every individual year.
Table 1 shows the average outcomes over a period of 4 years.
R1 R2 R3 R4
PG 0,70 AZH 0,50 ALS 11,56 ALS 0,96 Lepra 0,72 ALS 0,93 MS 11,03 HS 0,91 BWS 0,89 MLD 0,94 KWF 6,26 MS 0,91 MLD 0,90 HS 1,42 PG 6,20 NiS 0,88 RF 1,02 MS 1,42 AZH 5,86 KWF 0,87 AZH 1,06 PG 1,43 Lepra 5,17 RF 0,87 NiS 1,09 RF 1,58 HS 5,07 AZH 0,83 ALS 1,15 KWF 2,00 NiS 4,63 MLD 0,71 HS 1,19 NiS 2,15 BWS 4,61 Lepra 0,64 KWF 1,24 Lepra 3,15 RF 4,46 BWS 0,62 MS 1,54 BWS 5,77 MLD 4,21 PG 0,55 Table 1: Average values of the efficiency and effectiveness ratios
Efficiency
The ratios that were used to measure efficiency will be discussed here separately.
Ratio 1 measures the fraction of money spent on projects that is derived from raised funds. If all raised funds are spent on projects it leads to an outcome of 1. When the outcome is above 1 the money that is raised is more than the money spent on projects and when the outcome is below 1 it indicates that the money that is raised is less than the money spent on projects. The results show that the Stichting Fonds Psychische Gezondheid has the lowest average value (0,70) and the Stichting Nationaal MS Fonds has the highest average value (1,54). There are 7 charitable institutions which have average values above 1.
Effectiveness
The results of the 2 ratios that were used for measuring effectiveness will be explained here. Ratio 3 measures the relationship between the contributions and the expenses of fundraising. If the outcome of the ratio exceeds 1 it indicates that more money is raised than is spent on fundraising. If the outcome is below 1 than there are more fundraising expenses than money raised by means of fundraising. In this case, there seems to be no right of existence of the institution. The results show that the Stichting ALS has the highest average value (11,56) and the
Maag Lever Darm Stichting has the lowest average value (4,21).
Ratio 4 measures the share of raised funds in total revenues. The outcome can only exceed 1 if there is a loss in other revenues, for example a negative return on investments. The more the ratio approaches 1 the larger the share of raised funds in total revenues. The results show that the
Stichting ALS has the highest average value (0,96) and the Stichting Fonds Psychische Gezondheid has the lowest average value (0,55). None of the charitable institutions has an
outcome above 1.
6.3 Interpreting the results
It is difficult to interpret the results, because the outcomes are diverse and there is no benchmark to compare the results to (Herman & Renz, p.110). It is for example difficult to say whether an institution is effective unless a ratio is applied that is proven significant or unless there is something to compare with from previous research. Interpreting the results in this chapter means comparing the institutions to each other so at least the results can be evaluated to a peer group but it also means the interpretation will be primarily descriptive.
Efficiency
years. This applies for the Stichting ALS too. The values of the numerator and the denominator of ratio 2 for these 2 institutions are only available for 2008. An other institution which uses its financial resources appropriate is the Maag Lever Darm Stichting with an average value of 0,90 for ratio 1 and an average value of 0,94 for ratio 2. There are 7 charitable institutions that do not spend all raised money on projects and the average values of ratio 1 are therefore above 1. The
Reumafonds has an average value slightly above 1 (1,02) but the average value of the Stichting Nationaal MS Fonds is much higher than 1 (1,54). This seems an indication of inappropriate use
of financial resources.
There are 5 charitable institutions with an average value above 1,5 for ratio 2. This indicates that their reserve for continuing existence is high according to the CBF-requirement. Regarding ratio 1 these charitable institutions perform on average. The Nederlandse Brandwondenstichting has an outcome of 5,77 on ratio 2 which is much higher than the CBF-requirement, but the outcome on ratio 1 is 0,89 which is appropriate. The same applies for the Leprastichting which has an outcome of 3,15 on ratio 2 which is high, but the outcome of ratio 1 is 0,72 which is appropriate. These charitable institutions can improve the spending of their financial resources.
Effectiveness
The Stichting ALS performs well on ratios 3 and 4. For ratio 3 it has an average value of 11,56 and for ratio 4 it has an average value of 0,96 which indicates that 96% of total revenues contains raised funds. The Stichting Nationaal MS Fonds performs well on these ratios too. The average value of 11,03 for ratio 3 indicates that much more funds are raised by means of fundraising than there is money spent on fundraising. For ratio 4 it has an average value of 0,91 which means that almost all revenues are generated by raised funds. It shows these charitable institutions are competent in generating revenues by means of fundraising.
The institution that has the second lowest average value for ratio 4 is the Nederlandse
Brandwonden Stichting (0,62). This indicates that only 62% of total revenues is generated by
6.4 Correlation analysis
The results of the analysis show that none of the charitable institutions perform well on both efficiency and effectiveness but rather on efficiency or effectiveness. Therefore an analysis will be performed to explore if there is a negative correlation between these two performance measures. The ratios of all individual years for 2005-2008 will be used. Efficiency is measured by ratios in which lower outcomes indicate better efficiency. Effectiveness is measured by ratios in which higher outcomes indicate better effectiveness. In the hypothesis is the expectation reflected that an institution which performs well on efficiency (and shows low results on the ratios) does not perform well on effectiveness (and shows low results on the ratios). The expected correlation is defined as follows:
H1: There is a positive correlation between efficiency and effectiveness ratios.
The correlation coefficient that is used depends on the variables involved. If both variables involved are parametric, the Pearson correlation coefficient can be applied. If either (or both) of the two variables involved are nonparametric, than a nonparametric measure of correlation must be used, for example the Spearman’s rho coefficient. In my thesis, the assumption is that the variables are parametric. Both correlation coefficients will be calculated, but the Pearson correlation coefficient will be discussed in more detail. The values for the Pearson correlation coefficient will be reported in the higher right hand of the table, the values for the Spearman’s rho correlation coefficient will be reported in the lower left hand of the table.
The results of the analysis for hypothesis 1 are shown in tables 2 and 3.
Mean Std. Deviation N
R1 2005-2008 1,0452 ,31765 44
R2 2005-2008 2,0532 1,76298 38
R3 2005-2008 6,2798 3,59978 44
R4 2005-2008 ,7950 ,16778 44
In table 2 is shown that the number of observations is 38 for ratio 2. This is caused by the fact that there are no data available for calculating ratio 2 for the years 2005-2007 for the Stichting
ALS and the Stichting Fonds Psychische Gezondheid.
The results of the correlation analysis in table 3 show that there is a significant negative correlation between ratios 1 and 2 and between ratios 2 and 4 and that there is a significant positive correlation between ratios 1 and 4. This means that the hypothesis is not fully accepted, because there is a positive correlation between efficiency and effectiveness with regard to ratio 1 but not regarding ratio 2 which shows a negative correlation with ratio 4. All other correlations are not significant.
The results for the Spearman’s rho correlation coefficients support the significant positive correlation between ratios 1 and 4. There is also a significant positive correlation between ratios 1 and 3 and between ratios 3 and 4.
R1 2005-2008 R2 2005-2008 R3 2005-2008 R4 2005-2008 Correlation coefficient 1,000 -,341* ,227 ,831** Sig. (2-tailed) ,036 ,138 ,000 R1 2005-2008 N 44 38 44 44 Correlation coefficient -,156 1,000 -,166 -,468** Sig. (2-tailed) ,350 ,320 ,003 R2 2005-2008 N 38 38 38 38 Correlation coefficient ,393** -,107 1,000 ,156 Sig. (2-tailed) ,008 ,521 ,312 R3 2005-2008 N 44 38 44 44 Correlation coefficient ,791** -,200 ,315* 1,000 Sig. (2-tailed) ,000 ,229 ,037 R4 2005-2008 N 44 38 44 44
6.5 Discussing the results
The analysis shows that the hypothesis is only partly accepted. Both ratios for efficiency showed a significant correlation with ratio 4 for effectiveness, but for ratio 1 the correlation is positive (r = 0.831 ; p < 0.000) while for ratio 2 the correlation is negative (r = -0.468 ; p < 0.003). Neither one of the efficiency ratios shows a significant correlation with ratio 3 for effectiveness.
The positive correlation between ratios 1 and 4 is caused by the fact that the 3 institutions that performed the best for ratio 1 are the institutions that performed the worst regarding ratio 4. It means that when an institution performs well on efficiency and has therefore low efficiency ratios, it does not perform well on effectiveness and has therefore low effectiveness ratios. When for example total contributions decrease in a specific year but the other sources of revenues remain the same, than an institution will have a low value of ratio 4 because the share of raised funds in total revenues decreases. If total contributions decrease, there must be other sources of revenues from which part of it will be spent on stated projects. The decrease in money spent on stated projects will in this case be less than the decrease in total contributions and therefore ratio 1 will be low too.
There is a negative correlation between ratios 2 and 4 which means that the better an institution performs on efficiency, the better the performance will be on effectiveness. If for example total contributions increase in a specific year, ratio 4 will increase too because the share of raised funds in total revenues increases. The cost of the working organization includes the cost of personnel, administrative costs and the costs of fundraising. When more money is raised, the annual costs of the working organization that are assigned to fundraising could increase too, leading to a lower value of ratio 2.
6.6 Conclusion
7.
Is there a relationship between financial performance and the amount
of raised funds?
A primary source of income for a charitable institution is the amount of raised funds. When a charitable institution publishes its annual report, it provides insight into its financial performance to the public. Potential donors could be influenced by this report. If for example financial performance is adequate, it will result in more donations in the next year. Likewise if there is financial unperformance than it will influence the amount of donations negatively. In this chapter I will explore if there is a relationship between financial performance in one year and the increase or decrease in raised funds in the next year. I will also explore if an increase in raised funds in one year has consequences for the efficiency in the next year.
7.1 Research method
When a (potential) donor decides to give money to a charitable institution, he or she might examine the different institutions and their goals and objectives. The donor can read the financial reports of the institutions to decide which charitable institution to support. The assumption here is that a (potential) donor will read a financial report before making the decision to donate money.
When efficiency and effectiveness appear to be high in one year, than the expectation is that potential donors are willing to donate money and current donors are willing to donate more money in the next year. This means that total contributions should increase.
Efficiency was measured by ratios in which lower outcomes indicated higher efficiency. This implies that if there is a relationship with an increase in total contributions, a negative correlation should be found. Effectiveness was measured by ratios in which higher outcomes indicated higher effectiveness. This indicates a positive correlation.
Two hypotheses are explored regarding these relations:
H2: There is a positive correlation between an effectiveness measure in one year and an increase in the amount of raised funds in the next year.
Moreover, there is a second analysis that will be performed. When total contributions increase in one year, this could have consequences for the efficiency in the same year and / or the next year. When for example the increase in the amount of raised funds is strong an institution might not immediately have projects available to spend the additional money. Therefore the reserve for continuing existence could increase. This means that the use of financial resources is not optimal and a low efficiency is expected. Efficiency is measured by ratios in which higher outcomes indicate lower efficiency. This means a positive correlation should be expected, because an increase in the amount of raised funds should lead to a lower efficiency reflected by higher outcomes on the ratios. Two hypotheses are explored:
H3: There is a positive correlation between an increase in the amount of raised funds in one year and efficiency in the same year.
H4: There is a positive correlation between an increase in the amount of raised funds in one year and efficiency in the next year.
To test these hypotheses the financial reports of the 11 charitable institutions for the years 2004 to 2008 will be used.
Financial performance is measured by means of ratios for efficiency and effectiveness. These ratios were calculated in chapter 6 for the years 2005-2008. For hypothesis 1 and 2 the objective is to explore the relationship between financial performance in one year and the increase in the amount of raised funds in the next year. The ratios are used for 2005-2007, while the percentage increase or decrease in the amount of raised funds is measured for 2006-2008.
After all financial data are calculated, they will be analyzed to explore if there is a significant relationship between financial performance and the increase in amount of raised funds. Therefore the correlation is measured for all efficiency and effectiveness ratios. Again, both the Pearson correlation coefficient and the Spearman’s rho correlation coefficient will be measured. The results for the latter will be reported in the lower left hand of the table and the results for the Pearson correlation coefficient in the higher right hand of the table. These last values will be discussed in more detail.
7.2 Results
The results of the analysis are shown in table 4 to 9.
In table 4 is shown that the number of observations is 27 for ratio 2. This is caused by the fact that there are no data available for the years 2005-2007 for the Stichting ALS and the Stichting
Fonds Psychische Gezondheid.
Mean Std. Deviation N R1 2005-2007 ,9894 ,28702 33 R2 2005-2007 2,3226 2,00161 27 R3 2005-2007 6,5421 4,06587 33 R4 2005-2007 ,7652 ,15285 33 Increase in contributions ,234793064 ,5271787209 33
Table 4: Descriptive statistics of correlation analysis for H1 and H2
R1 2005-2007 R2 2005-2007 R3 2005-2007 R4 2005-2007 Increase in contributions Correlation coefficient 1,000 -,366 ,272 ,786** -,266 Sig. (2-tailed) ,060 ,126 ,000 ,134 R1 2005-2007 N 33 27 33 33 33 Correlation coefficient -,219 1,000 -,199 -,576** -,254 Sig. (2-tailed) ,273 ,320 ,002 ,200 R2 2005-2007 N 27 27 27 27 27 Correlation coefficient ,409* -,208 1,000 ,185 -,110 Sig. (2-tailed) ,018 ,299 ,304 ,542 R3 2005-2007 N 33 27 33 33 33 Correlation coefficient ,771** -,284 ,265 1,000 -,182 Sig. (2-tailed) ,000 ,151 ,136 ,312 R4 2005-2007 N 33 27 33 33 33 Correlation coefficient ,001 -,407* -,215 ,086 1,000 Sig. (2-tailed) ,996 ,035 ,230 ,633 Increase in contributions N 33 27 33 33 33
**. Correlation is significant at the 0.01 level (2-tailed). Table 5: Results of correlation analysis for H1 and H2
In table 6, the descriptive statistics for testing hypothesis 3 are shown. The number of values is 38 for ratio 2. As explained before, this is caused by the fact that there are no data available for the years 2005-2007 for the Stichting ALS and the Stichting Fonds Psychische Gezondheid. For the increase in contributions the number of observations is 43, which is caused by the fact that the Stichting ALS is established in 2005 and therefore an increase in raised funds can not be calculated for 2005.
Mean Std. Deviation N
R1 2005-2008 1,0452 ,31765 44
R2 2005-2008 2,0532 1,76298 38
Increase in contributions ,202927765 ,4889567869 43
In table 7 the results are shown for the analysis concerning hypothesis 3. There is a significant positive correlation between the increase in contributions and the outcomes of ratio 1 in the same year (r = 0,472 ; p < 0,001) but there is no significant correlation between the increase in contributions and the outcomes of ratio 2 (r = -0,174 ; p < 0.297). Therefore the hypothesis can only be confirmed partly. The results for the Spearman’s rho correlation coefficient support the positive significant correlation between ratio 1 and the increase in contributions in the same year. There is no significant correlation between the values of ratio 2 and the increase in contributions in the same year.
R1 2005-2008 R2 2005-2008 Increase in contributions Correlation coefficient 1,000 -,341* ,472** Sig. (2-tailed) ,036 ,001 R1 2005-2008 N 44 38 43 Correlation coefficient -,156 1,000 -,174 Sig. (2-tailed) ,350 ,297 R2 2005-2008 N 38 38 38 Correlation coefficient ,447** -,246 1,000 Sig. (2-tailed) ,003 ,137 Increase in contributions N 43 38 43
*. Correlation is significant at the 0.05 level (2-tailed). **. Correlation is significant at the 0.01 level (2-tailed). Table 7: Results of correlation analysis for H3
The last analysis that will be performed is testing hypothesis 4. In table 8 the descriptive statistics of hypothesis 4 are shown. The number of observations is 29 for ratio 2 and 32 for the increase in contributions. This is caused by the missing data for the Stichting ALS and the
Mean Std. Deviation N
R1 2006-2008 1,0945 ,32635 33
R2 2006-2008 1,9738 1,68603 29
Increase in contributions ,209917406 ,4625405912 32
Table 8: Descriptive statistics of correlation analysis for H4
In table 9, the results are shown regarding hypothesis 4. There is no significant correlation between the increase in contributions in one year and efficiency in the next year (R1; r = -0,094 ; p < 0,610 : R2; r = -0,111 ; p < 0,566). Therefore the hypothesis is rejected. Even more, the correlations do not have the predicted signs. The results for the Spearman’s rho correlation coefficient support the results for the Pearson correlation coefficient. There is no significant correlation between the variables.
R1 2006-2008 R2 2006-2008 Increase in contributions Correlation coefficient 1,000 -,352 -,094 Sig. (2-tailed) ,061 ,610 R1 2006-2008 N 33 29 32 Correlation coefficient -,084 1,000 -,111 Sig. (2-tailed) ,666 ,566 R2 2006-2008 N 29 29 29 Correlation coefficient ,009 -,014 1,000 Sig. (2-tailed) ,963 ,944 Increase in contributions N 32 29 32
Table 9: Results of the correlation analysis for H4
7.3 Discussing the results
These must be presented separately in the income statement. Therefore they are not assigned to fundraising expenses anymore or other projects to achieve the objectives. Furthermore, an overview needs to be included in which different expenses (for example personnel cost and the cost of housing) are specified. Another adjustment is related to the presentation of the balance sheet and the income statement. In the annual reports of 2008 the new version of RJ650 is applied. The different classification of expenses could have influenced the analyses. If this item is not dealt with consistently over the years because of a changed guideline, this could lead to different outcomes when comparing fundraising expenses or money spent on stated projects based on the old version of RJ650.
In this analysis a small sample was used. Only 11 charitable institutions were included. Although there were data from several years, further analysis could be useful with a larger set of data to explore if this changes the results and if a relationship between the different aspects would be apparent.
In chapter 6 an analysis was performed which showed a significant negative correlation between ratios 1 and 2. In hypothesis 3 a positive relationship should be measured between an increase in the amount of raised funds in one year and efficiency in the same year. Since a negative correlation was found between both efficiency ratios, the hypothesis might be difficult to be accepted for both ratios. However, ratio 1 showed a significant positive correlation with the increase in amount of raised funds in the same year. This indicates that increasing total contributions might not be immediately spent on stated projects.
If an institution performs well on effectiveness it means that the charitable institution is capable of generating revenues by means of fundraising. When a potential donor decides to donate money to an institution and he recognizes in the financial report that total contributions are relatively high, he might think the charitable institution already has plenty of funds. This means that a potential donor would rather donate money to an institution that is capable of generating revenues but does not have the best performance in effectiveness. A charitable institution which performs average would receive more funds in this situation because the financial resources of the best performing institutions are evaluated as already sufficient.
The analysis of hypothesis 1 and 2 is based on the assumption that a (potential) donor will read the financial report before making the decision of donating money. Maybe donors do not make a reasoned decision, but rather donate to an institution which they feel connected with, for example because they have dealt with a disease in their family and the institution is focused on this particular disease. In such circumstances an increase in the amount of raised funds is unpredictable.
7.4 Conclusion
8.
Conclusion
In this final chapter a conclusion is drawn in order to answer the research question which was formulated in the introduction. Therefore, the conclusions of all chapters will be discussed. Afterwards a conclusion to the research question will be formed followed by the recommendations and shortcomings of my thesis.
8.1 Conclusions
A charitable institution is a specific type of a nonprofit organization. The institution supports a charitable, cultural or scientific goal and is built around a mission, which is difficult to quantify. An other aspect that distinguishes a charitable institution from other nonprofit organizations is fundraising as a way of acquiring financial resources. In the financial statements of charitable institutions there is no bottom line against which financial performance can be measured. However, financial performance is an important aspect to explore. Previous research showed that efficiency and effectiveness are important regarding performance in charitable institutions. Therefore, ratios were defined for efficiency and effectiveness to evaluate financial performance. Charitable institutions have also rules to which they need to comply. When a charitable institution complies to Dutch rules and guidelines it can receive a seal of approval from the CBF. One ratio for measuring financial performance is related to the conditions stated by the CBF. After reviewing the literature, a model to measure financial performance was developed. This model includes the mission, fundraising efficiency, fundraising effectiveness and fundraising reporting. These are the aspects on which the financial performance of charitable institutions was evaluated.
The empirical part of the thesis was meant to add more relevance to the subject by integrating the literature review with practice. Evaluating efficiency and effectiveness is difficult because there is no benchmark data available and therefore the evaluation was based on comparing the results of all institutions in the sample. The results show that there is no institution that performs well on both efficiency and effectiveness. The Stichting Fonds Psychische Gezondheid and the Maag
Lever Darm Stichting use their financial resources in an appropriate way and show satisfactory
