Social Reporting Standard

The Social Reporting Standard (SRS) provides a standardized reporting guideline for initiatives and projects in the non-profit sector. The term SRS is inspired by the Financial Reporting Standards of for-profit companies.

Unlike traditional businesses, social enterprises and non-profit organisations are not primarily focused on maximizing profits, but rather on social issues. Therefore, the application of Financial Reporting Standards for such organisations is not appropriate. Thus, the development of the SRS, which takes into account the unique goals of non-for-profit organisations, is essential.

Generally speaking, all reporting guidelines in the social sector can be regarded as SRS. Such a concept for reporting standards (accounting and legal) in the social sector has been developed by several experts in the German social sector. Thus far the SRS has received broad support and is widely used. The Social Reporting Standard (SRS) approach is an open non-commercial project.

Similar to the reporting and annual financial statements of for-profit organisations, social entrepreneurs, non-profit organisations, and other organisations with social objectives also regularly report on their activities. For example, they commonly report to the public, their donors, investors and sponsors, authorities, or to their partners.

While for-profit organisations are required to report in accordance with laws of generally accepted principles such as the German "Handelsgesetzbuch (HGB)” (comparable with the US GAAP or the International Financial Reporting Standards (IFRS)), consistent reporting standards for socially oriented organisations, however, have not yet been established. Consistent reporting enables social businesses’ stakeholders to compare information. Comparability is a very important element in addressing potential investors and also relevant for other stakeholders. Complex norms for sustainability reporting standards such as that of the Global Reporting Initiative are not, within reasonable effort, realizable for social organisations to complete. For these reasons, many organisations therefore have to create separate reports in accordance with each individual investor’s guidelines, which can lead to wasting valuable resources.

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