Accountability and legitimacy of non‐profit organisations: Challenging the current status quo and identifying avenues for future research

Yasmin, Sofia; Ghafran, Chaudhry

doi:10.1111/faam.12280

Cited by 16 publications

(17 citation statements)

References 130 publications

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“…Source: Compiled by the authors from the material contained in this section of the paper QRAM 20,4 legitimation theory which is of direct relevance to NPOs seeking to legitimate their activities in the views of their oversight bodies (Yasmin and Ghafran, 2021) and which is considered in this paper.…”

Section: This Raises Important Questions Over Npo Interventions Espec...mentioning

confidence: 99%

“…However, Suchman (1995) did acknowledge that the state of legitimacy may be achieved by organisations manipulating practices and information to meet the expectations of oversight bodies and the external controlling environment. This is an important dimension of legitimation theory which is of direct relevance to NPOs seeking to legitimate their activities in the views of their oversight bodies (Yasmin and Ghafran, 2021) and which is considered in this paper.…”

Section: Theoretical Perspective: Legitimation Theory and Bricolagementioning

confidence: 99%

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Charities, altruism and becoming business-like: tensions and contradictions

Lambert

Lapsley

2023

QRAM

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Purpose There is a longstanding debate over the role of modern business methods in the contemporary non-profit organisation (NPO). Critics of business practices assert that they may undermine the missions of NPOs. The aim of this paper is to contribute to this debate. Many accounting researchers have shifted research focus to concepts such as trust and crises. These are important topics. But they may overshadow practices which are taken for granted as accepted practice which does not merit re-examination. Design/methodology/approach This qualitative project is based on an initial survey followed by comparative case studies of three NPOs. The researchers have used both interviews and documentary analysis in this study. Findings The contention that the adoption of business-like practices undermines the fundamental aim of altruism of NPOs is challenged by the findings of this paper. The very concept of altruism is not a single unifying concept in NPOs – it is a contested idea. However, and most importantly, in this research there is no evidence of mission drift by NPOs which adopt business practices. This research highlights the way many NPO CEOs are mission-driven but also pragmatic bricoleurs in their consideration of new business practices. Most importantly, these case studies demonstrate a variation in practices within the participating organisations. This raises challenging questions about a receptive context for the adoption of new business practices which are explored in this paper. Research limitations/implications The case studies in this paper are from the UK, and further studies in different operating contexts in other countries would be useful. In particular, the finding that the fundamental ethos of NPOs is not challenged by being business-like merits further research. There is also scope for further research on what constitutes a receptive context for the adoption of new business practices by NPOs. Practical implications This study reveals the potential significance of NPO boards, particularly non-executive directors, in the shaping of organisational practices. There is evidence in this study of NPOs recruiting business experts for purposes of legitimation. But this study also shows how business expertise can be mobilised to enhance NPO performance by bricoleurs in NPO who are highly motivated individuals who will adopt useful business practices to hand if they improve charity outcomes. Social implications The NPO organisations are motivated by the desire to make a difference to the lives of people who are vulnerable or disadvantaged. This study has interesting implications for managers and directors of NPOs on their effectiveness. Originality/value This study challenges the critical view that becoming more business-like undermines the fundamental ethos of altruism in NPOs. This is an important finding, but this study also reveals the recruitment of business expertise by NPOs purely for purposes of legitimation. However, these legitimating practices differ from the well-established view of isomorphism in the field of NPOs and suggests that, on the contrary, there is a variation in practice within the NPO field which has important implications for donors, regulators, directors and managers of NPOs.

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Section: This Raises Important Questions Over Npo Interventions Espec...mentioning

confidence: 99%

Section: Theoretical Perspective: Legitimation Theory and Bricolagementioning

confidence: 99%

Charities, altruism and becoming business-like: tensions and contradictions

Lambert

Lapsley

2023

QRAM

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“…In addition, scholars have articulated "four types of criteria for evaluating legitimacy: regulatory, pragmatic, moral, and cultural-cognitive" (Deephouse et al, 2017, p. 39). Each criterion (also labeled as 'legitimacy assets, ' Yasmin & Ghafran, 2021) has applicability in both the strategic and the institutional camps (Suchman, 1995). Pragmatic legitimacy "rests on the self-interested calculations of an organization's most immediate audiences" (Suchman, 1995, p. 578).…”

Section: Plural Institutional Contexts and Legitimacy Criteriamentioning

confidence: 99%

“…The degree to which social enterprises' motives diverge-for example, whether their revenue-generating activities are primarily a means to social/environmental impact ends (i.e., 'value creation') or more to generate financial wealth (i.e., 'value capture'; see Santos, 2012)-also can matter to legitimacy perceptions. Thus, social enterprises commonly are challenged to come up with valid ways to communicate organizational legitimacy to salient stakeholders and maintain public trust (Dart, 2004;Nicholls, 2010a;Yang & Wu, 2016;Yasmin & Ghafran, 2021). This is particularly true for those with 'liability of newness' challenges (Singh et al, 1986) and for entities struggling financially (Flockhart, 2005).…”

Section: Introductionmentioning

confidence: 99%

Social Enterprise Legitimacy: Application of Accountability Mechanisms as a Multi-Institutional Context Strategy

Kolodinsky

Ritchie

Capar

2022

J. Public Nonprof Aff.

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Social enterprises, as hybrid organizations with a dual-mission focus and diversity of primary stakeholders, have unique communication and governance challenges when compared to other social mission organizations, such as nonprofits and nongovernmental organizations. To address a gap in the social enterprise literature, we offer a comprehensive framework to illustrate how the application of context-specific ‘accountability mechanisms’ (Ebrahim, 2003) can strengthen organizational legitimacy perceptions and, in doing so, strengthen performance perceptions and stakeholder ties. Given multiple principal stakeholders in the plural institutional environments in which such hybrid organizations operate, our premise is that social enterprises bolster such perceptions by applying relevant accountability tools and processes in each of Ingram and Clay’s (2000) four institutional contexts. Importantly, our framework applies to both strategic and institutional social enterprise legitimacy. As an illustration, we performed a qualitative examination of three established social enterprises, each in a different industry. Findings revealed each of these social enterprises had adopted accountability mechanisms in all four institutional contexts, suggesting that practitioner application of, and future research on, our framework may prove fruitful.

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“…Earlier work and recent regulatory developments in developed country contexts (notably UK, Australia and New Zealand) focused on improving financial accounting and reporting practices (e.g. Yasmin and Ghafran, 2021) for the benefit of external users. These developments later extended to the measurement and communication of social performance such as reporting on outcomes, evaluation of impact, effectiveness/efficiency of programs/activities and governance (e.g.…”

Section: Introductionmentioning

confidence: 99%

Evaluating NGO accounting and reporting practices in a developing economy: the case for reforms

Pariag-Maraye

Soobaroyen²,

Mooneeapen³

et al. 2022

JPBAFM

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PurposeThis study investigates non-government organisations' (NGO) current accounting and reporting practices in a developing economy context (Mauritius) and argues the case for reforms to enhance their transparency and accountability.Design/methodology/approachA content analysis of a sample of NGO annual returns was carried out followed by interviews with NGO officers and actors on the state of accounting and reporting practices in Mauritius. The authors analyse the data from a public accountability perspective.FindingsThe content analysis revealed poor accounting and reporting practices by Mauritian NGOs. Based on interview insights, the authors find that these poor practices arise due a lack of (1) NGO-specific accounting standards, (2) engagement with narrative reporting, (3) properly trained NGO officers and (4) proper monitoring and control. Some of the interviewees expressed their support for introducing online filing systems and accounting requirements that are commensurate with NGO size, improving regulatory oversight, while ensuring that NGO accounts are made available to the public.Originality/valueWhile there are many calls for better NGO accountability and transparency in developing economies, little is known about the state of accounting and reporting mechanisms (and regulatory framework thereof) that could provide the basis for relevant reforms towards enhancing accountability. Considering the opacity of NGO information in Mauritius and recent concerns about money laundering practices and the perceived ineffectiveness of regulatory oversight, this first national assessment of accounting and reporting practices sheds light on current challenges and formulates locally appropriate recommendations for the sector.

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Accountability and legitimacy of non‐profit organisations: Challenging the current status quo and identifying avenues for future research

Cited by 16 publications

References 130 publications

Charities, altruism and becoming business-like: tensions and contradictions

Charities, altruism and becoming business-like: tensions and contradictions

Social Enterprise Legitimacy: Application of Accountability Mechanisms as a Multi-Institutional Context Strategy

Evaluating NGO accounting and reporting practices in a developing economy: the case for reforms

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