Financial and nonfinancial transparency represents crucial issues in the dialogue between nonprofit organizations (NPOs) and their stakeholders and an essential dimension of accountability towards the communities in which they operate. This paper aims to provide information on the level of transparency of Italian NPOs, drawing on an analysis of the top 100 third-sector entities that have received the highest contributions from the "Cinque per mille" (0.5% contribution) scheme. The 0.5% contribution scheme is an important fiscal measure within Italy's social and welfare policy, offering taxpayers the possibility of giving 0.5% of their personal income tax as a solidarity contribution to a select variety of entities that operate in specific welfare or charitable sectors established under Italian law. The study tests the relationship between the donations to these entities (2013 and 2017 0.5% contributions) and the level of financial and nonfinancial transparency (2014 and 2018 financial statements), based on a comparison of the organizations' financial and nonfinancial information. The paper shows a specific scenario, considering the existing Italian model the answer to the question of whether financial transparency truly represents a tool to create dialogue with donors and the community or is simply a necessary instrument to justify the permitted fiscal and legal advantages. This study presents limitations. First, the research has been based on financial statements' information. Currently, there is neither a mandatory format for the presentation of financial statements nor mandatory accounting standards. Another limitation is based on the difficulty of generalizing the information collected to the whole third sector system operating in Italy. Future contributions would investigate small and nonlarge NPOs, as the third-sector reform will have a larger impact on them in terms of transparency. This probably will support an even higher level of donations.

Transparency in Italian Nonprofit Organizations: Is It More Burdensome or Beneficial?

Matteo Pozzoli;
2022-01-01

Abstract

Financial and nonfinancial transparency represents crucial issues in the dialogue between nonprofit organizations (NPOs) and their stakeholders and an essential dimension of accountability towards the communities in which they operate. This paper aims to provide information on the level of transparency of Italian NPOs, drawing on an analysis of the top 100 third-sector entities that have received the highest contributions from the "Cinque per mille" (0.5% contribution) scheme. The 0.5% contribution scheme is an important fiscal measure within Italy's social and welfare policy, offering taxpayers the possibility of giving 0.5% of their personal income tax as a solidarity contribution to a select variety of entities that operate in specific welfare or charitable sectors established under Italian law. The study tests the relationship between the donations to these entities (2013 and 2017 0.5% contributions) and the level of financial and nonfinancial transparency (2014 and 2018 financial statements), based on a comparison of the organizations' financial and nonfinancial information. The paper shows a specific scenario, considering the existing Italian model the answer to the question of whether financial transparency truly represents a tool to create dialogue with donors and the community or is simply a necessary instrument to justify the permitted fiscal and legal advantages. This study presents limitations. First, the research has been based on financial statements' information. Currently, there is neither a mandatory format for the presentation of financial statements nor mandatory accounting standards. Another limitation is based on the difficulty of generalizing the information collected to the whole third sector system operating in Italy. Future contributions would investigate small and nonlarge NPOs, as the third-sector reform will have a larger impact on them in terms of transparency. This probably will support an even higher level of donations.
File in questo prodotto:
Non ci sono file associati a questo prodotto.

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11367/103733
Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus ND
  • ???jsp.display-item.citation.isi??? ND
social impact