1. Home
  2. Vol 5, No 1 (2021)
  3. Mizutani

SROI with Assurance Can Help Contributors Distinguish Hypocritical Organizations from Genuine NFPs

Fuminobu Mizutani

Abstract


The American film Poverty, Inc. alerted citizens to the fact that some “not-for-profit” organizations impair public benefit and seek profit. To avoid to contributing to such hypocritical organizations, this paper considers the possible use of SROI. SROI is an accounting concept used to evaluate NFPs. There is a problem called overhead aversion among contributors. It is hypothesized that spreading the use of assurance on SROI will face this problem. If so, a measure against this is necessary. This paper builds its theory on the existence of negative SROI as a tool to distinguish hypocritical organizations from genuine NFPs from the perspective of welfare economics, and argues that, theoretically, SROI can be negative. This paper then uses a questionnaire-based survey and conducts various statistical analysis to show that disclosure of SROI with assurance is practical. Nevertheless, it is also shown that assurance on SROI faces overhead aversion, a measure against which is provided by an influential paper. Spreading the use of SROI with assurance will trigger a shift from contribution to hypocritical organizations to contributions toward genuine NFPs. Such a shifts in contributions may also improve welfare. The main conclusion of this paper is that SROI with assurance can help contributors distinguish hypocritical organizations from genuine NFPs.

 

Doi: 10.28991/esj-2021-01253

Full Text: PDF


Keywords


SROI; NFP; Accounting; Assurance; Hypocrisy.

References


Mankiw, N. Gregory. “Principles of Economics.” Eighth Edition. Cengage Learning (2016).

Poverty, Inc. DVD, directed by Michael Matheson Miller (Its publication location is only disclosed as in the U.S.: This film is not from an incorporated publisher, 2014).

Green, L, K Ashton, M Dyakova, and L Parry-Williams. “Adding Value to the Use of Health Impact Assessment and Social Return on Investment Technologies.” European Journal of Public Health 30, no. Supplement_5 (September 1, 2020). doi:10.1093/eurpub/ckaa166.341.

Bellucci, Marco, Carmela Nitti, Serena Franchi, Enrico Testi, and Luca Bagnoli. “Accounting for Social Return on Investment (SROI): The Costs and Benefits of Family-Centred Care by the Ronald McDonald House Charities.” Social Enterprise Journal 15, no. 1 (February 4, 2019): 46–75. doi:10.1108/sej-05-2018-0044.

McElwee, Gerard, and Robert Smith. “Towards a Nuanced Typology of Illegal Entrepreneurship: A Theoretical and Conceptual Overview.” Contemporary Issues in Entrepreneurship Research (May 22, 2015): 3–22. doi:10.1108/s2040-724620150000005018.

Gneezy, U., E. A. Keenan, and A. Gneezy. “Avoiding Overhead Aversion in Charity.” Science 346, no. 6209 (October 30, 2014): 632–635. doi:10.1126/science.1253932.

Yankah, Ekow N. “Legal Hypocrisy.” Ratio Juris 32, no. 1 (February 21, 2019): 2–20. doi:10.1111/raju.12234.

Zhao, Hongdan, Jing Xu, Yuanhua Chen, and Wenyuan Sun. “The Employee Attributions of Corporate Hypocrisy in Corporate Social Responsibility: An Explore Research Based on Grounded Theory.” SAGE Open 10, no. 2 (April 2020): 215824402092442. doi:10.1177/2158244020924427.

Christensen, Lars Thøger, Mette Morsing, and Ole Thyssen. “Timely Hypocrisy? Hypocrisy Temporalities in CSR Communication.” Journal of Business Research 114 (June 2020): 327–335. doi:10.1016/j.jbusres.2019.07.020.

Jauernig, Johanna, and Vladislav Valentinov. “CSR as Hypocrisy Avoidance: a Conceptual Framework.” Sustainability Accounting, Management and Policy Journal 10, no. 1 (March 4, 2019): 2–25. doi:10.1108/sampj-05-2018-0141.

Zhigang, Wang, and Zhu Haoming. “Consumer Response to Perceived Hypocrisy in Corporate Social Responsibility Activities.” SAGE Open 10, no. 2 (April 2020): 215824402092287. doi:10.1177/2158244020922876.

Nicholls, Jeremy, Eilis Lawlor, Eva Neitzert, Tim Goodspeed, and S. Cupitt. "A Guide to Social Return on Investment: The SROI Network." Accounting for Value (2012).

Addy, Chris, Maya Chorengel, Mariah Collins, and Michael Etzel. "Calculating the Value of Impact Investing an Evidence-based Way to Estimate Social and Environmental Returns." Harvard Business Review 97, no. 1 (2019): 102-109.

Maier, Florentine, Christian Schober, Ruth Simsa, and Reinhard Millner. “SROI as a Method for Evaluation Research: Understanding Merits and Limitations.” VOLUNTAS: International Journal of Voluntary and Nonprofit Organizations 26, no. 5 (September 9, 2014): 1805–1830. doi:10.1007/s11266-014-9490-x.

Bojer, Hilde. “Distributional Justice: Theory and Measurement.” Routledge (2003).

Schofield, Philip. “Bentham: A Guide for the Perplexed.” Continuum (2009).

Spencer, David. "Love's labor's lost? The disutility of work and work avoidance in the economic analysis of labor supply." Review of Social Economy 61, no. 2 (2003): 235-250. doi:10.1080/0034676032000098237.

Farajzadeh, Zakariya. “Emissions Tax in Iran: Incorporating Pollution Disutility in a Welfare Analysis.” Journal of Cleaner Production 186 (June 2018): 618–631. doi:10.1016/j.jclepro.2018.03.093.


Full Text: PDF

DOI: 10.28991/esj-2021-01253

Refbacks

  • There are currently no refbacks.


Copyright (c) 2021 Fuminobu Mizutani