Abstract
Are you a watcher of television programmes about long-lost children and/or parents, with moments of discovery and reconciliation? Such programmes may not be short on tear-jerking, but always provide some evidence of the infrequent choice of those who have lost their children not to reconnect, a point that illustrates the ongoing issues around stigma and disgrace associated with children “out of wedlock”. The occurrence of this remains with a much higher frequency than might otherwise be predicted by the more utopian amongst us in this century. This stigma motif is one theme in this collection of studies, and draws the reader towards both the Baldarelli and Del Baldo study in Italy, and the Miley and Read study of a foundling hospital in the UK (Table 1 provides a summary of each contribution in the special issue theme). 1
Special issue contributions.
It invites the reader to reflect on the long-standing and well-recognised anthropological principle of the universality of kinship as an organizing principle in all human societies. Wilson’s book Man, the Promising Primate (1980) is premised on the importance of the recognition of fatherhood and its related responsibilities. It is, therefore, not surprising that those outcast through a lack of such strong components of identity find themselves on the receiving end of philanthropy and charitable instruction.
The tokens left by parents at a Foundling Hospital in London, examined over the period 1757–1797 by Miley and Read, are a sharp reminder of how such identity may be lost. Those in governance at that Hospital were not short on the value they placed on record keeping and accounting; but as their aim was to transform these children into deserving and hard-working members of society, 4,000 children at a time, this meant suppressing the stigma of abandonment and/or illegitimacy. They were a form of “fraudulent accounting record”, not serving the purpose parents expected and being hidden as a linkage to a stigmatized origin to be abandoned in the recreation of identity process performed by the hospital. The manner in which wealthy benefactors were permitted to scrutinize records and thereby ensure that their funds were being put to good purpose also reminds us of the importance of identity and a one-on-one linking in order to nurture benefactors; a pattern that continues in this century in charities, such as World Vision, Save the Children and other organizations whereby donors are linked to a named identity among the deserving poor in developing countries. Some universality of benefactor motivation and interest has been well appreciated by those establishing charities in the early eighteenth century in their evolution of processes and building up a strong donor base.
In contrast, the Red Cross has not aimed at this link of a one-on-one, and Langton and West provide a comprehensive account of how the Red Cross has used what the authors refer to as emotive accountability – a different and very successful approach to engaging donor responsiveness. It is also of interest how clearly they demonstrate that the Red Cross has not widely engaged in political debate, a tempting activity which may even be the downfall of certain charities, as the remnant of CORSO
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bears witness to as an example. And the underbellies of many such large and small institutions, with their dependency on sizable volunteer contributions towards their operation, are exposed when they find themselves suffering defalcation and theft, as referred to by Heier. He provides an illuminating description of how the Southern Baptist Church in the United States of America developed its accounting and auditing procedures. The care of such institutions in such matters may have grown as a response to an 1841 observation in that country: What you call your fundamental institutions, your great and holy causes, seem to them great abuses, and, when nearly seen, paltry matters. Each “cause” as it is called, – say Abolition, Temperance, say Calvinism, or Unitarianism, – becomes speedily a little shop, where the article, let it have been at first never so subtle and ethereal, is now made up into portable and convenient cakes, and retailed in small quantities to suit purchasers. You make very free use of these words “great” and “holy”, but few things appear to them such. Few persons have any magnificence of nature to inspire enthusiasm, and the philanthropies and charities have a certain air of quackery. As to the general course of living, and the daily employments of men, they cannot see much virtue in these, since they are parts of this vicious circle; and as no great ends are answered by the men, there is nothing noble in the arts by which they are maintained. (Emerson, 1841)
This grouping by Emerson of philanthropies and charities, these little shops, under one dubious umbrella, with a “certain air of quackery”, remind us of the origins of the word “charity”, derived from the Latin word caritas, paralleling the Greek agape. 3 So, as guest editors we approached managing this compilation with love, or maybe tough love. Not unconditional love, setting some conditions for inclusion in this Special Issue. But we are dependent on the scope and depth of what is voluntarily offered. When the call was made, the guest editors hoped for a range of approaches and a range of time and jurisdictional analysis, but the latter was not the case. Two of the papers here are based on Italian charitable organizations, the others in English-speaking jurisdictions. Such a result recognizes that further explorations should be made to provide other geographic perspectives. If English-speaking areas can be thus analysed in the light of its features, the European continent surely deserves more investigation. Indeed, Europe with its plurality of nationalities and its social-political characteristics has always been a heterogeneous context, with a variety of philanthropic impulses (Macdonald and Tayart de Borms, 2008). The same Italian area (represented in this Special Issue by two works), if traced in historical dimension, cannot be considered as a whole, representing a nation that is the result of a unification of previous States or City-States. Charities emerging in different Italian cities represent expressions of different ways to organize the underlying response based on caritas.
It has long been recognized that governments world-wide, and the State, will support charities with financial support because the charities operate to offer functions which would otherwise have to be undertaken by the government. The poor, the homeless, the mentally incapacitated, children, the elderly and the dispossessed would all be even worse off than they are at present without charities. One method of supporting charities has been to permit charitable donations to be allowable as corporate expenses; or such monies and donations by individuals tagged with some sort of favourable taxation treatment, but such strategies are erratic and may fluctuate with the priorities of the government.
Overall, the relationships of governments to charities is tortuous. Charities may resist demands for accountability, arguing that their performance is not best measured financially, whilst needing considerable financial support through a government or its agencies. The amounts of monies involved are not always easily understood. The 53 confraternities in Verona described by Moggi, Filippi, Leardini and Rossi had an average income of 136 ducats per annum (compared with the Monasteries’ 1418 ducats) in 1682. Fast forward 328 years, to financial reporting by the Southern Baptist church in the United States of America, where there appears to be around $4 billion of combined revenues in 2010. From the outside, the grandeur of such amounts of funding means that the objectives of decision usefulness and stewardship underlying the teaching of accounting in our undergraduate courses all morph into accountability to many contrasting varieties and blends of stakeholders, time and place specific.
Charities have inherited assumptions concerning the functioning of financial reporting from the era of early company organizations, where the financial return ruled the benefactor’s perception of success. Perhaps this has now turned full circle when considering the financialization of philanthropy, as offered by Maltby and Rutterford. An individualized risk and return approach (as done with shares), with a rejection of those not offering the required positive rate of return, and dire consequences for defaulters, has been underlined by these authors. Indeed, processes to establish and then maintain accountability, and thus meet the expectation of accountability by donors and benefactors, can be seen to take many forms in all these papers.
In the confraternities of Verona researched by Moggi et al., different stakeholder groups have been identified and located within an accountability system, where God can be considered the most powerful stakeholder, acting through the Pope as Vicar of Christ. A transparent accountability for the use of donations in the interests of the legatee and deceased was achieved by several accountability tools, linking economic bonds, moral aims and power relations implicit in such confraternities.
In a world-wide charitable organization, a different approach to accountability emerges through appropriate disclosures, as is well represented in the study by Langton and West of the Australian Red Cross. Indeed, it is shown that the Red Cross promotes accountability as an extension of financial reporting, with added emotive dimensions evolving steadily over the century.
This leads us to “Time and place”, which is more than a theme in this Special Issue of Accounting History, because it is fundamental to all historical research. This is clearly illustrated in the scholarship evident in the Cordery, Fowler and Morgan paper: that the institutionalization of charitable structures can be best understood when the people, the place and the time are carefully examined; in this case, New Zealand and the United Kingdom. Such analysis follows the period under the microscope of Maltby and Rutterford, whose documentation of the financialization of philanthropy in Victorian England reflects that the motives for such investment included gaining a lifelong reputation for benevolence. This proffers clear and robust scholarship on the degree to which, as noted above, charity is “retailed in small quantities to suit purchasers”. Benevolence is linked to reputation, social status and social mobility; so it may not only be altruism, but a move along the trajectory away from stigma and disgrace. In the New World context of the Southern Baptist church, Heier reminds us that principles of stewardship, avoiding wasting the benefits of God’s grace, and tithing all may have been invoked to move donors along a similar trajectory towards benevolence.
Maltby and Rutterford also alert us to the increasing role of women in these investment activities; then the reader may step forward to a different time and place: Italy, and the period between 1914 and 1950 when the role of women (the “pink” in accounting) is examined. The mothers and their children were struggling physically, socially and economically, but found an institution which allowed the children to be raised in an environment which overcame the stigma of illegitimacy; and ensured women received support towards gaining a sufficiency of respectability. But the added value in the study by Baldarelli and Del Baldo is the overlap of these efforts with the struggle of other women to maintain their positions in the organization itself, to retain their governance and management roles.
There is an absence of reference in these papers to the (previously) almost obligatory sourcing of charitable motives to Paul’s letter to the Corinthians, 4 maybe because it is increasingly recognized that a charitable act is motivated equally by altruism in those who can afford the luxury of humanitarianism. Luxury it is, as there were no papers received on any history of accounting for, or by, a charity in countries which are low on the OECD tables. Any research by academics, if done at all in these nation states, is scarcely funded, but an examination of the drivers for indigenous charity in developing countries would offer the reader an appreciation of the universality of altruism, well-established in socio-biological literature. May we look towards further explorations on this theme in Accounting History, and hope that PhD students among others reading this issue are encouraged to provide such insights. In this regard, a full examination of previous decades of research contributions on charities, specifically and more generally on related charitable organizations of diverse structures in accounting history, will be pivotal to unveiling “unexplored lands”, and to boosting further research on the full dimensions of accounting, accountability, auditing and governance.