Nonprofit governance and outside corruption: The role of accountability, stakeholder participation, and management systems

Abstract

Outside corruption implies that a nonprofit organization is used to commit an infraction or crime. In Spain, this type of corruption has been detected in the context of public nonprofits as a result of the legal reform that enabled the judgment of the criminal responsibility of legal entities. A large percentage of these entities were affected by the reform, but little is known about the possible practices that can altogether prevent this behavior. In particular, there are few studies that consider nonprofit governance as a possible measure to avoid corruption in this context. For this reason, our aim is to analyze the role of certain nonprofit governance practices in fighting corruption. Using structural equation modeling, our results reveal that nonprofit governance is a key tool for mitigating corruption, although the weights of the different practices are not the same.

Is peer regulation perceived as an effective mediator to strengthen the mission orientation of INGO leaders?

“…Finally, broadening the scope of our research, peer regulation may be an effective means to strengthen INGOs' mission orientation not only in the context of economic and political pressures. For instance, López‐Arceiz and Bellostas (2020) find that nonprofits employ different governance mechanism to withstand external pressures to engage in corrupt behavior. The study shows that internal mechanisms such as stakeholder participation and sound management systems can reduce corrupt behavior of nonprofits.…”

Nonprofit Scandals: A Systematic Review and Conceptual Framework

“…Our review captured a range of articles examining transparency (Nezhina & Brudney, 2012;Phillips, 2019), governance (Abu Khadra & Delen, 2020;Gibelman et al, 1997;Gibelman & Gelman, 2001, 2002a, 2002bHarris et al, 2017), and accountability practices (Andreoli & Lefkowitz, 2009;Gibelman & Gelman, 2004;Greenlee et al, 2007;Holtfreter, 2004Holtfreter, , 2008Kummer et al, 2015;LeClair, 2019a;López-Arceiz & Bellostas, 2020;Ohalehi, 2019;Zuber & Andersen, 2020). Nevertheless, the empirical focus of our review, tight definition of nonprofit scandal, and selection of search terms may all have contributed to an underemphasis of important allied work in these areas (readers interested in learning more about this allied work should see, for example, Ben-Ner & Van Hoomissen, 1994;Bies, 2010;Farwell et al, 2019;Harris & Neely, 2018;Leardini et al, 2016;Saxton & Guo, 2009;Van Puyvelde, 2016;Van Puyvelde et al, 2011).…”

Fraud in Nonprofit Organizations: How to Mitigate it?

“…As stated by López-Arceiz and Bellostas [33], nonprofit organization leaders should promote good governance to increase trust among stakeholders and mitigate fraud. Nonprofit leaders or managers have the mission to assess employees, donors, and government officials' attitudes and behaviors toward their organizations to ensure the credibility of the organization when collecting and managing the funds received from donors [33]. The findings from the interviews indicated that participants wanted to understand employees, donors, and government officials' attitudes about fraud in their organizations (Table 1).…”