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About this book

This book describes how non-profit organisations (NPOs) communicate what they constitute, signal success and display sustainability in order to convince stakeholders to provide essential resources. Reports on intellectual capital offer a worthwhile approach. Based on empirical research, the book highlights the essential resources for NPOs and on the demand imposed on organisations, as well as the dependencies of those resources and demands. This insight helps NPOs to provide necessary information while keeping the disclosure to a minimum and thus not giving away possible competitive advantages. Further, the status-quo of IC disclosure in Germany is presented and a theoretical framework for the motivation for NPOs to disclose information on their IC is presented. Researchers will find these findings a solid foundation for further research. Finally, a framework for the disclosure of intellectual capital is provided to support practitioners.

Table of Contents


Chapter 1. Introduction

This first chapter introduces the relevance of the topic, the motivation for and importance of the research on intellectual capital (IC) in German non-profit organisations (NPOs). IC is recognised as competitive advantage (Kong & Prior, International Journal of Nonprofit and Voluntary Sector Marketing, 13, 119–128, 2008; Kong, Journal of Intellectual Capital, 11, 284–304) and thus as essential for the survival of any organisation, including NPOs. NPOs cannot signal success and that they are worthy of support via profits or for instance. However, NPOs can attract new donors, investors, and other stakeholders by highlighting their competitive advantages, ultimately enabling organisations to put a stronger focus on achieving their social goals instead of spending time and resources on worrying about financial aspects. So far, there is no empirical research on IC disclosure of German NPOs.

Katrin Blankenburg

Chapter 2. A Conceptual Framework of Intellectual Capital

The purpose of this chapter is to ensure a common understanding of the term intellectual capital and its concept as well as to provide insight into the current discussion on the measurement and reporting of IC. To this end, definitions and perceptions of intellectual capital are introduced and insight into the historical background of IC offered. Additionally the accounting perspective on intellectual capital is highlighted since IC is a growing area of interest in this field. Reasons for organisations to engage in the reporting of IC as presented in literature are offered next, followed by an introduction to the challenges of intellectual capital reporting and an overview on the discussion on intellectual capital measurement. In addition, external communication with a focus on financial reporting is discussed and available frameworks for the management and disclosure of IC are introduced. The chapter closes with a summary putting the topic of intellectual capital into the context of the current research.

Katrin Blankenburg

Chapter 3. Introduction to the Non-Profit Sector

Before the issue of IC in NPOs and IC reporting in NPOs are addressed, basic characteristics and distinctions are presented. First, the distinction of the third sector from the other sectors provides an understanding for its characteristics in general. The German third sector and its peculiarities are introduced next, followed by a segmentation of the third sector and types of German NPOs. This introduction to the non-profit sector represents the second half of the review of the literature crucial for the topic of the current research.

Katrin Blankenburg

Chapter 4. Methodology

This methodology chapter highlights the underlying considerations of the current research. It starts with a presentation of the research objectives and research questions, followed by an introduction of the research philosophy applied. Next, the influences of the researcher are discussed and finally a reflection on ethical implications offered.

Katrin Blankenburg

Chapter 5. Theoretical Framework for Intellectual Capital Reporting of NPOs

A theoretical framework for the motivation of intellectual capital disclosure of NPOs is developed based on links between six theories. According to literature the theories most frequently used for research into this topic of IC measurement and reporting were agency theory, legitimacy theory, resource-based view, and stakeholder theory. These theories are introduced in light of IC reporting of NPOs to facilitate a transparent and comprehensible choice of a theory applied. Additionally, since legitimacy theory is part of institutional theory, and resource-based view and resource dependency theory are based on the same assumptions, these theories are presented as well. Since each of the presented theories provides valuable answers to the question as to what motivates NPOs to disclose their IC, a table offers an overview on the key perspective of the six theories while a graph highlights the links between the theories. As a result stakeholder theory and resource dependency theory are utilised as the theoretical framework for the analysis of the data collected to address the research questions.

Katrin Blankenburg

Chapter 6. Methods

To ensure transparency, replicability of the means, as well as reliability and plausibility of the findings produced, this chapter offers a comprehensive introduction to the methods applied. Expert interviews, content analysis, software utilized (MAXQDA), as well as the sample used are introduced and described. Additionally, basic considerations for the analysis are presented, the building of the coding frame is illustrated, and the approach to coding selected material is explained.

Katrin Blankenburg

Chapter 7. Presentation of Results

German donation-soliciting NPOs will profit from several findings presented in this chapter. For instance, demands imposed on German donation-soliciting NPOs and resources needed by them for survival and success are highlighted. For NPOs, the dependencies and interdependencies that exist between demands and resources are essential if they want to know what information to publish to what extent in order to satisfy their stakeholders. Additionally, the findings show a discrepancy between the awareness of IC, its concept, and its disclosure. On the one hand, the terms “intellectual capital” or any other capital were not used even once in the documents analysed and most representatives were unaware of IC and its concept according to interviews conducted. On the other hand, the document analysis showed that every NPO discloses IC. A conscious and purposeful handling and disclosure of IC could be beneficial for NPOs, however.

Katrin Blankenburg

Chapter 8. Discussion

A framework for German NPOs for the disclosure of their IC is presented, developed based on the findings produced. Leading to the framework, the research questions posed for the current research are addressed, which are:1.Are German NPOs aware of the term IC and its concept?2.Is IC currently disclosed by German NPOs?3.How is IC currently disclosed by German NPOs?4.What are the reasons for NPOs to disclose information on their IC?To this end, the current state of the disclosure of IC by German NPOs is illustrated first and comprehensive insight into the current state of the disclosure of information on IC by German NPOs offered. Reasons for NPOs for the disclosure of IC are discussed next, and assumptions made for sampling and the consequent variables used are checked for their validity as well as their impact on the development of recommendations.

Katrin Blankenburg

Chapter 9. Conclusion

A recapitulation and reflection on the main findings brings this dissertation to a close and offers researchers as well as practitioners novel and beneficial insights. Also, six contributions to knowledge, further implications to policy and to practice are presented. Since limitations of the research lead to opportunities for further research, both limitations and opportunities are discussed as well.

Katrin Blankenburg


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