Regulatory reform: distinguishing between mutual-benefit and public-benefit entities

Carolyn Cordery and Dalice Sim

Journal of Public Budgeting, Accounting & Financial Management, 2019, vol. 31, issue 3, 431-450

Abstract: Purpose - The purpose of this paper is to analyse nonprofit regulation through comparing and contrasting mutual-benefit and public-benefit entities. It ascertains how these entities differ in size, publicness, tax benefits and whether these differences might suggest regulatory costs should be differentiated. Design/methodology/approach - This mixed-methods study utilises financial data, submissions and interviews. Findings - There are stark differences in these two types of regulated nonprofit entities. Members should be the primary monitoring agency/ies for mutual-benefit entities, but financial reports should be understandable to these members. Nevertheless, the availability of tax concessions, combined with the benefits of limited liability, suggest mutual-benefit entities should be regulated and monitored by government in a way sympathetic to their size. Research limitations/implications - As with most research, a limitation is this study’s focus on a single jurisdiction. Practical implications - The differences in these entities’ characteristics are important for designing regulation. Social implications - Better regulation is likely to require a standard set of financial reporting standards. Government has the right to demand disclosures due to benefits mutual-benefit entities enjoy. Originality/value - In comparison to studies utilising only public-benefit data, this study uses unique data sets to compare public-benefit and mutual-benefit entities and presents nonprofit sector participant’s perceptions of these differences in context. This enables analysis of how better regulation could be achieved.

Keywords: Charities; Differentiated regulation; Membership entities; Nonprofit regulation (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jpbafm:jpbafm-12-2018-0148

DOI: 10.1108/JPBAFM-12-2018-0148

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