Making sense of accountability: Conceptual perspectives for northern and southern nonprofits

Abstract

This article examines the concept of accountability from various disciplinary lenses in order to develop an integrated understanding of the term. Special attention is devoted to principal-agent perspectives from political science and economics. An integrated framework is developed, based on four central observations. (1) Accountability is relational in nature and is constructed through inter-and intraorganizational relationships. (2) Accountability is complicated by the dual role of nonprofits as both principals and agents in their relationships with other actors. (3) Characteristics of accountability necessarily vary with the type of nonprofit organization being examined. (4) Accountability operates through external as well as internal processes, such that an emphasis on external oversight and control misses other dimensions of accountability essential to nonprofit organizations. The analysis draws from the experiences of both Northern and Southern nonprofits, that is, organizations based in wealthy industrialized regions of the world (the global North) and those in economically poorer areas (the South).A S NONPROFIT and nongovernmental organizations (NGOs) have grown in numbers and visibility in many parts of the world over the past two decades, they have also been beset by numerous highly publicized scandals concerning accountability. Board members and key officers have been accused of wrongdoings ranging from mismanagement of resources and use of funds for personal gain to sexual misconduct and fraud. In the United States, for example, scandals have been reported at well-known organizations such as

The donor–beneficiary charity accountability paradox: a tale of two stakeholders

“…While formal reports (of perhaps a less technical nature than those required for 'upward' accountability) and other communications may play a part in 'downward' accountability, features beyond merely providing information will possibly be most relevant (such as the quality and immediacy of service delivery, and 'voice' in terms of decision making). Charities can gain legitimacy from their upward stakeholders by communicating the financial probity and efficiency with which they operate and the positive impact that they have on those they serve (Ebrahim, 2003b). However, while the discharge of accountability also enables charities to achieve legitimacy from their downward stakeholders, their limited power may encourage some organizations to be less focused on this (Assad and Goddard, 2006); although, the potential for mission drift may depend upon, among other things, the degree to which individual charities are strongly value-driven.…”

“…Operationally, there are multiple accountability instruments (Ebrahim, 2003b). While accepting that public discourse instruments are only one means through which accountability is discharged (and that accountability is much wider than accounting, no matter how widely 'accounting' is defined), public discourse is nevertheless a key mechanism as it enables organizations to communicate with constituents and demonstrate that they are operating responsibly (Samkin and Schneider, 2010).…”

“…Public discourse mechanisms include the annual report (used here, for convenience, to refer to documents which comprise an organization's annual financial statements plus any narrative reports by management -it may, as in the UK, be statutorily required) and other voluntary documents published for stakeholder consumption (for example, a less formal annual review). Supplementary accountability mechanisms (outside of merely the provision of information) include: participation, where organizations engage with (downward) constituents and involve them in decision making; and the adoption of standards and codes of conduct which articulate appropriate and accountable behaviour (Ebrahim, 2003b). In practice, accountability mechanisms operate connectedly.…”

Steering International NGOs through Time: The Influence of Temporal Structuring in Government Accountability Requirements

“…Focusing on international nongovernmental organizations (INGOs), the general consensus is that, current accountability practices applied to these nonprofits have become overly complex, cumbersome, and tedious (e.g., Edwards and Hulme 1996;Cutt and Murray 2000;Brown and Moore 2001;Ebrahim 2002Ebrahim , 2003aEbrahim , 2003bAlexander, Brudney, and Yang 2010). For instance, being largely entrenched in a classical principal-agent relationship, government accountability requirements have been described as bureaucratic hurdles or, worse, as threats to the achievement of INGOs' missions (Bendell 2006).…”

Defining the Content of Sustainability Reports in Nonprofit Organizations: Do Stakeholders Really Matter?

“…Ebrahim (2003b, p. 194) suggests an approach to accountability that we adopt in this article, characterizing it as "the means through which individuals and organizations are held externally to account for their actions, and as the means by which they take internal responsibility for continuously shaping and scrutinizing organizational mission, goals, and performance." More specifically, accounting literature has recognized the potential for inappropriate accountability mechanisms to damage, rather than enhance, the social and environmental benefits that many NPOs seek to realize through their socially useful activities (Dixon, Ritchie, & Siwale, 2006;Ebrahim, 2003aEbrahim, , 2003bEbrahim, , 2005Najam, 1996;Unerman & O'Dwyer, 2006). Second, the emerging dominance of upward hierarchical accountability to donors at the possible expense of more holistic accountability to a broader range of stakeholders, especially beneficiaries, has created concerns that NPOs' accountability priorities are being distorted (Blagescu,De Las Casas, & Lloyd, 2005;Ebrahim, 2003aEbrahim, , 2003bEbrahim, , 2005O'Dwyer and Unerman, 2007).…”