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Graduate's PhD thesis to represent U of T

Name: Laurie Mook
Program: Adult Education and Community Development
Department: Adult Education and Counselling Psychology
Supervisor: Jack Quarter
ThesisSocial and Environmental Accounting: The Expanded Value Added Statement

Laurie Mook's thesis was selected by the University of Toronto as the University's representative (one per university) for the Northeastern Association of Graduate Schools Doctoral Thesis Competition, Social Sciences & Education. Each year the Northeastern Association of Graduate Schools recognizes an outstanding dissertation that has been produced by a PhD candidate at one of its member institutions, with an award which is presented to the recipient at its annual meeting. The recipient is invited to attend the meeting as a guest of the Association. Dr. Mook answers some questions about her work below.

What is the idea behind your thesis?
My dissertation develops an accounting model called the Expanded Value Added Statement (EVAS) with the intention of driving organizational behaviour towards sustainability. In contrast to conventional accounting statements and traditional analyses currently published by most organizations, the EVAS brings together economic, social and environmental impacts in one statement. It also expands the boundaries of organizational reporting to consider multiple stakeholders and aims to use accounting as an explicit change agent: ‘what gets measured, gets managed.’

The EVAS has four main influences: mainstream accounting, critical accounting, social accounting, and sustainability principles. Mainstream accounting, particularly the progressive practice of value added accounting, highlights the wealth created (or destroyed) and distributed through the results of labour and capital in transforming external goods and services. Critical accounting recognizes that accounting practices are shaped by and can in turn can shape social reality. Social accounting broadens the range of items included in accounting statements to take into account externalities. Finally, the concept of sustainability provides the conceptual and normative framework that guided the selection of variables included in the EVAS. 

What's the background to your work?
I was introduced to this topic several years ago, when I was exposed to the idea of measuring socio-economic impacts of non-profit organizations on their communities. This led me to delve deeper into the limitations of traditional financial accounting, and initiated my own interest in social accounting. Since I am a former accountant and accounting supervisor, my background was well suited to connecting the practical and theoretical dimensions of this field.

Around the same time, I was invited to participate in a collaborative research project to use experimental social accounting and auditing methods to look at how and to what extent the Waterloo Co-operative Residences Inc. contributed to the social and economic life of its community. In one of my literature searches I came across an article explaining the Value Added Statement (Meek & Gray, 1988), and was intrigued by its possibilities as a social accounting statement. However, the traditional Value Added Statement only included financial items, and I was interested in the possibility of showing both social and economic impacts. I then modified the statement to report both financial and social value added by the co-operative, and named it the Expanded Value Added Statement. The primary innovations of that model were to include an estimated value for social labour[1] contributed by resident-members to the co-operative as part of the value added as well as a value for secondary outputs[2] such as the skills learned by resident-members in running a multi-million dollar organization (Richmond & Mook, 2001).

After completion of the project with the student co-operative, I applied the Expanded Value Added Model to four Canadian non-profit organizations: the Canadian Red Cross, Toronto Region; the Canadian Breast Cancer Foundation, Ontario Chapter; Canadian Crossroads International; and the Jane/Finch Community and Family Centre. This project made it possible to address more specifically the challenges in attributing a comparative market value to volunteer contributions and in including them in the Expanded Value Added Statement.

I continued this line of research with Junior Achievement of Rochester in the State of New York, applying the Expanded Value Added Statement to that organization. Alongside that work I also created two additional social accounting statements. One of them was the Socioeconomic Impact Statement, which highlights the flow of monetary and social resources to and from stakeholders. The other was the Socioeconomic Resource Statement, which reports an organization’s value creating resources broken down into economic capital (including financial and physical capital) and intellectual capital (including human, organizational and relational capital). I also applied the Socioeconomic Resource Statement to a case study of California commuters to illustrate the environmental impact of an organizational policy to encourage employees to use more environmentally friendly transportation to and from work. These research projects were included in a book called What Counts: Social Accounting for Nonprofits and Cooperatives, co-authored with Jack Quarter and Betty Jane Richmond, published by Prentice Hall in 2003 and in a second edition by Sigel Press in 2007.

Tell us about the work you've been doing?
In this dissertation, the EVAS is applied to three case studies. (1) ARNOVA, a non-profit scholarly association, showing the value added of volunteer work and un-reimbursed out-of-pocket expenses; (2) a construct of 33 sustainable buildings showing the costs and benefits of building in sustainable ways versus using traditional building techniques; and (3) a master-planned community in Vancouver, including an economically targeted investment, a non-profit community police centre, a non-profit neighbourhood house, and municipal government agencies, showing how the EVAS can help to make investment decisions that support sustainability.

Following my doctoral thesis work, my current project extends this line of research to social enterprises and I am working with Evergreen, a Canadian environmental non-profit, on a community-university research alliance project funded by SSHRC. For more information, see To develop and operationalize a social accounting model that can be applied to social development enterprises.

I am also applying the main findings of my thesis in workshops on the value added of volunteers to community organization (see Social Economy Centre 2007-08 Workshop Series: Social Accounting for Non-Profits and Cooperatives), and also in the development of an online, open source software called VolunteersCount funded by SSHRC and a Canada Foundation for Innovation and Ontario Research Fund grant.  

What issues are involved?
In Canada and throughout the world, there is a myriad of organizations that have both social and economic objectives. Among them are non-profit organizations, co-operatives, social enterprises, other for-profits with environmental and social mandates, and public sector enterprises. All these entities can be grouped under the umbrella concept of socially minded organizations. The main impetus for this dissertation was that the traditional accounting statements that these organizations prepare fall short in showing their social and environmental side. Indeed, traditional accounting statements were developed to measure success in terms of profit and shareholder returns. While the logic of traditional accounting does not reflect the broader objectives of socially minded organizations, traditional accounting also falls short because non-monetary resources are excluded from consideration. This can be especially significant for those organizations that rely heavily on volunteer labour.

Thus, traditional accounting for socially minded organizations falls short in two important areas. First, traditional accounting is incomplete as it ignores a significant source of inputs, in particular, volunteer labour. Second, it is incomplete as it ignores a significant part of its outputs, particularly social and environmental outputs. Because of these two features, traditional accounting leaves much to be desired in helping socially minded organizations measure their performance according to their combined social and economic objectives.

What applications do you see coming out of your work?
In closing, The Expanded Value Added Statement developed in this thesis offers accountants, policy developers, members of organizations and society at large a tool to understand the connections between economic, social and environmental dimensions, and the inter-relationships between organizations in different sectors in society. The Expanded Value Added Statement starts with the assumption that an organization should be accountable to society, not only to a powerful few.

As a model driven by sustainability in today’s context of climate change, the Expanded Value Added Statement provides an alternate way of thinking about how economic, social and environmental issues coincide, and also collide. It is a tool that can be used in a myriad of ways: as a showcase of an organization’s performance story; as a facilitator of learning about sustainability and alternate ways of seeing; and as a driver of behaviour in a variety of settings. The three settings analyzed in this dissertation and recent applications of this model to other organizations show that another accounting is possible.

The Expanded Value Added Statement (EVAS) makes a significant contribution to the field of accounting by highlighting hitherto invisible dimensions and integrating them into a single accounting statement. This helps to tell a much richer performance story of organizations and opens up new possibilities for organizational and social change. The EVAS recognizes established traditions in accounting, but at the same time pushes the envelope aiming at viable changes in accounting practices that nurture a more sustainable society. It provides a considerable advance in social accounting by integrating economic, social and environmental factors in a format that is applicable to different organization types, time dimensions, and contexts.

[1] Social labour: Work duties required as a condition of membership in a co-operative
[2] Secondary outputs: the indirect effects of an organization’s service on its members, customers, clients or patrons.