Difference between revisions of "Methods of Enhancing Accountability"
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One example of such public scandal was that of United Way of America, where then-CEO William Aramony was found guilty of 25 felony charges including conspiracy to defraud the United Way, filing false tax returns and falsifying records to hide the diversion of money; among other things, he used charitable donations to finance a lavish life style, including trips on the Concorde and an expensive condominium. United Way was hurt both by its affiliates delaying payment of voluntary dues to the national organization and public charitable contributions to both United Way and its affiliates dropping up to 30%. | One example of such public scandal was that of United Way of America, where then-CEO William Aramony was found guilty of 25 felony charges including conspiracy to defraud the United Way, filing false tax returns and falsifying records to hide the diversion of money; among other things, he used charitable donations to finance a lavish life style, including trips on the Concorde and an expensive condominium. United Way was hurt both by its affiliates delaying payment of voluntary dues to the national organization and public charitable contributions to both United Way and its affiliates dropping up to 30%. | ||
| − | Yet another example is that of American Parkinson Disease Association, where then-CEO Frank Williams was found to have quietly embezzled contribution checks worth more than one million dollars over a seven-year period. (For further information on individual scandals and their impact on these NGOs, please refer to Gibelman and Gelman’s work, ''Very Public Scandals: An Analysis of How and Why Nongovernmental Organizations Get in Trouble'', which notes some areas in which traditional accountability and governance measures have failed.) | + | Yet another example is that of American Parkinson Disease Association, where then-CEO Frank Williams was found to have quietly embezzled contribution checks worth more than one million dollars over a seven-year period. (For further information on individual scandals and their impact on these NGOs, please refer to Gibelman and Gelman’s work, ''Very Public Scandals: An Analysis of How and Why Nongovernmental Organizations Get in Trouble'', which notes some areas in which traditional accountability and governance measures have failed.) <membersonly> |
==Definitions of accountability== | ==Definitions of accountability== | ||
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(Ebrahim 2004) | (Ebrahim 2004) | ||
| − | The first principle indicates the broad range of stakeholders to whom NGOs must be held accountable: these not only include beneficiaries and donors, but also communities, governments, the realm of public opinion, private sector organizations, their own membership and staff, volunteers, and boards. As a framework, Ebrahim categorizes these stakeholders into the following groups: “upwardly” accountable to donors, “downwardly” accountable to communities and clients, and “internally” accountable to their own missions and staff. Ebrahim notes, “Accountability is thus a relational concept, with different kinds of accountability mechanisms necessary for satisfying different stakeholders.” This requires prioritization of accountabilities, with downward accountability to communities and clients being just as crucial to upward accountability to donors, which have generally enjoyed more well-developed measures through reporting requirements and evaluations. | + | The ''first principle'' indicates the broad range of stakeholders to whom NGOs must be held accountable: these not only include beneficiaries and donors, but also communities, governments, the realm of public opinion, private sector organizations, their own membership and staff, volunteers, and boards. As a framework, Ebrahim categorizes these stakeholders into the following groups: “upwardly” accountable to donors, “downwardly” accountable to communities and clients, and “internally” accountable to their own missions and staff. Ebrahim notes, “Accountability is thus a relational concept, with different kinds of accountability mechanisms necessary for satisfying different stakeholders.” This requires prioritization of accountabilities, with downward accountability to communities and clients being just as crucial to upward accountability to donors, which have generally enjoyed more well-developed measures through reporting requirements and evaluations. |
| − | The second principle notes the importance of building at an early stage of a project or program. As Ebrahim points out, “The conventional approach to accountability, in which reports and evaluations are generated at the end of a project, builds fear and miscommunication rather than trust.” He suggests that partnerships among NGOs, donors, and communities, including joint planning of programs, could potentially improve downward accountability and enhance buy-in among various stakeholders, leading to long-term effectiveness. | + | The ''second principle'' notes the importance of building at an early stage of a project or program. As Ebrahim points out, “The conventional approach to accountability, in which reports and evaluations are generated at the end of a project, builds fear and miscommunication rather than trust.” He suggests that partnerships among NGOs, donors, and communities, including joint planning of programs, could potentially improve downward accountability and enhance buy-in among various stakeholders, leading to long-term effectiveness. |
| − | The third principle highlights the importance of relationships built on a “deeper collective commitment to social change.” Ebrahim notes that the chain accountability need not be linear but can in fact be circular and inter-connected, with links bound together by a common set of goals. He feels this chain “makes it possible to develop performance measures and indicators that are meaningful and valued by key parties”; these measures may prove easier to accept if they are balanced by a sense of mutual commitment among the links on the chain. | + | The ''third principle'' highlights the importance of relationships built on a “deeper collective commitment to social change.” Ebrahim notes that the chain accountability need not be linear but can in fact be circular and inter-connected, with links bound together by a common set of goals. He feels this chain “makes it possible to develop performance measures and indicators that are meaningful and valued by key parties”; these measures may prove easier to accept if they are balanced by a sense of mutual commitment among the links on the chain. |
| − | In his fourth principle, Ebrahim notes that the mere provision of information is insufficient transparency for the purposes of accountability. Accountability requires information be provided in a manner meaningful to each of the stakeholders, with separate formats and details based on what is important to that stakeholder community. Further, accountability requires not only information about activities and decisions, but further response to concerns relayed by the various stakeholders. If it is not possible to address all concerns, then prioritization of accountability (as referenced in Principle 1) becomes crucial. | + | In his ''fourth principle'', Ebrahim notes that the mere provision of information is insufficient transparency for the purposes of accountability. Accountability requires information be provided in a manner meaningful to each of the stakeholders, with separate formats and details based on what is important to that stakeholder community. Further, accountability requires not only information about activities and decisions, but further response to concerns relayed by the various stakeholders. If it is not possible to address all concerns, then prioritization of accountability (as referenced in Principle 1) becomes crucial. |
| − | Ebrahim’s fifth principle expands on his fourth principle, noting that NGOs often use reports to justify existing programs rather than as tools with which to improve effectiveness and achievement of mission. NGOs must consider which results can truly inform and how those results can be used to improve activities and effectiveness. Some of this can also be addressed through format, as discussed above. | + | Ebrahim’s ''fifth principle'' expands on his fourth principle, noting that NGOs often use reports to justify existing programs rather than as tools with which to improve effectiveness and achievement of mission. NGOs must consider which results can truly inform and how those results can be used to improve activities and effectiveness. Some of this can also be addressed through format, as discussed above. |
| − | The sixth and final principle looks forward to long-term effectiveness. Ebrahim believes that “a focus on organizational learning offers an approach that is more constructive and positive than punitive approaches to accountability.” Prevailing approaches to accountability which focus on rewarding “short term-demonstrations of success” with additional funds fail to require critical evaluation of failures with an eye towards improvements: this latter evaluation is crucial to long-term effectiveness. Partnerships that value such honest scrutiny based on an environment of trust rather than punishment can offer greater opportunities for long-term success. | + | The ''sixth and final principle'' looks forward to long-term effectiveness. Ebrahim believes that “a focus on organizational learning offers an approach that is more constructive and positive than punitive approaches to accountability.” Prevailing approaches to accountability which focus on rewarding “short term-demonstrations of success” with additional funds fail to require critical evaluation of failures with an eye towards improvements: this latter evaluation is crucial to long-term effectiveness. Partnerships that value such honest scrutiny based on an environment of trust rather than punishment can offer greater opportunities for long-term success. |
For further explanation of these six principles, please refer to the Alnoor Ebrahim’s report, “Seeking NGO-Donor Partnership for Greater Effectiveness and Accountability”. | For further explanation of these six principles, please refer to the Alnoor Ebrahim’s report, “Seeking NGO-Donor Partnership for Greater Effectiveness and Accountability”. | ||
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Compliance is essential; without compliance by its signatories, a code is effectively useless. Leader notes, “Probably the weakest area of codes is what happens when a signatory breaks them” (Leader 2007). NGOs do not have the benefit of regulatory power over their signatories: the most they can do is expel them and note publicly their failure to comply with that code, and this power varies according to the code. Given an NGO’s inability to truly punish non-compliant members, some view codes as relatively ineffectual. Further, as Leader again notes, even the methods of detecting non-compliance are insufficient, as all codes to date rely on a “complaints driven” process, with other agencies reluctant to report others for non-compliance (Leader 2007). This is yet another area where adopting established codes of conduct can work to the benefit of your organization. Leader stresses that codes require “an independent compliance mechanism and the threat of publicity if codes are broken.” | Compliance is essential; without compliance by its signatories, a code is effectively useless. Leader notes, “Probably the weakest area of codes is what happens when a signatory breaks them” (Leader 2007). NGOs do not have the benefit of regulatory power over their signatories: the most they can do is expel them and note publicly their failure to comply with that code, and this power varies according to the code. Given an NGO’s inability to truly punish non-compliant members, some view codes as relatively ineffectual. Further, as Leader again notes, even the methods of detecting non-compliance are insufficient, as all codes to date rely on a “complaints driven” process, with other agencies reluctant to report others for non-compliance (Leader 2007). This is yet another area where adopting established codes of conduct can work to the benefit of your organization. Leader stresses that codes require “an independent compliance mechanism and the threat of publicity if codes are broken.” | ||
| − | Self-Certification | + | ==Self-Certification== |
Self-certification must work in concert with a predetermined set of goals and values. For example, Ebrahim notes the process of InterAction, the largest coalition of US-based international nongovernmental organizations focused on the world’s poor and most vulnerable people, whereby implementation of its code of conduct is based on self-certification, subject to review by a Standards Committee which also has the power to investigate complaints of non-compliance (Ebrahim 2003). Thus, self-certification works in concert with a previously established code of conduct which serves as the benchmark for performance. | Self-certification must work in concert with a predetermined set of goals and values. For example, Ebrahim notes the process of InterAction, the largest coalition of US-based international nongovernmental organizations focused on the world’s poor and most vulnerable people, whereby implementation of its code of conduct is based on self-certification, subject to review by a Standards Committee which also has the power to investigate complaints of non-compliance (Ebrahim 2003). Thus, self-certification works in concert with a previously established code of conduct which serves as the benchmark for performance. | ||
| − | Catherine Shea and Sandra Sitar, Program Director and Program Administrator respectively at the International Center for Not-for-Profit Law, note some key strengths of self-certification, namely its low cost, ease of administration for both the organization under review and the reviewing parties, and wide accessibility (Shea and Sitar 2004). On the surface, as long as there is a predetermined set of principles and criteria, self-certification is certainly one of the most easily implemented methodologies: it does not require tremendous new capital investment and can be completely coordinated and contained within the organization itself. Further, this methodology can be applied to many types of NGOs, without regard to their exact mission, as it requires no additional training or external expert involvement. However, there is clearly an important weakness to self-certification: its success in evaluating accountability is solely dependent on the seriousness with which the participants taking account take this process. If this process is not conducted correctly and with the utmost care, the results of the process will not be useful and, perhaps worse, any problems in accountability are not likely to surface. | + | |
| + | Catherine Shea and Sandra Sitar, Program Director and Program Administrator respectively at the International Center for Not-for-Profit Law, note some key strengths of self-certification, namely its low cost, ease of administration for both the organization under review and the reviewing parties, and wide accessibility (Shea and Sitar 2004). On the surface, as long as there is a predetermined set of principles and criteria, self-certification is certainly one of the most easily implemented methodologies: it does not require tremendous new capital investment and can be completely coordinated and contained within the organization itself. Further, this methodology can be applied to many types of NGOs, without regard to their exact mission, as it requires no additional training or external expert involvement. | ||
| + | |||
| + | However, there is clearly an important weakness to self-certification: its success in evaluating accountability is solely dependent on the seriousness with which the participants taking account take this process. If this process is not conducted correctly and with the utmost care, the results of the process will not be useful and, perhaps worse, any problems in accountability are not likely to surface. | ||
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Some NGOs utilizing self-certification programs include: | Some NGOs utilizing self-certification programs include: | ||
| − | + | * InterAction (also now using Self-certification Plus in a pilot format) | |
| − | + | * Canadian Council for International Co-operation (CCIC) | |
| − | + | * Lesotho Council of Non-Governmental Organizations | |
| − | + | * Association of Children’s Organizations in the Republic of Macedonia (ACORM) | |
| − | + | * Fundacion Lealtad’s Guia de al Transparencia, which serves as a guide to Spanish NGOs | |
Proper compliance with these codes as verified through self-certification can include enhanced credibility and recognition within the larger NGO community and constituent groups, perhaps resulting in the attraction of new and/or bigger donors. This can be accomplished through referral of this compliance in their promotional materials and the publishing of compliant organizations in the publications of these larger groups. Interestingly, some, such as ACORM, will also use their publications against non-compliant organizations, punitively drawing attention to these shortcomings to that same larger audience. | Proper compliance with these codes as verified through self-certification can include enhanced credibility and recognition within the larger NGO community and constituent groups, perhaps resulting in the attraction of new and/or bigger donors. This can be accomplished through referral of this compliance in their promotional materials and the publishing of compliant organizations in the publications of these larger groups. Interestingly, some, such as ACORM, will also use their publications against non-compliant organizations, punitively drawing attention to these shortcomings to that same larger audience. | ||
| − | Certification | + | ==Certification== |
| − | In their paper, Monica Blagescu, Lucy de Las Casas, and Robert Lloyd, | + | |
| + | In their paper, Monica Blagescu, Lucy de Las Casas, and Robert Lloyd, Program Manager, Project Officer, and Project Officer respectively of One World Trust, note an “emerging trend towards organizations evaluating against externally set standards”(Blagescu, de Las Casas, and Lloyd 2005). External certifications introduce a presumably neutral third party, often a peer organization, to the process, thus enhancing credibility, at least to a certain extent. However, success of this type of program can have a high cost and require high standards, as presumably experienced and independent evaluators work to identify and correct weaknesses in the organization related to compliance with their standards (Shea and Sitar 2004). | ||
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Based on Shea and Sitar’s work, there are two large camps of external certification methodologies utilized to date: | Based on Shea and Sitar’s work, there are two large camps of external certification methodologies utilized to date: | ||
| − | + | * Certification Programs with Government Recognition | |
| − | + | * Certification of Organizations Soliciting Funds from the Public (Shea and Sitar 2004) | |
| − | (Shea and Sitar 2004) | + | |
| − | Certification Programs with Government Recognition represent instances where an NGO has been given additional legitimacy with which to initiate a certification program to monitor accountability. These are generally country-specific programs which have been entitled to bestow additional benefits to recognized NGOs. Shea and Sitar note two examples of organizations utilizing these types of programs: the Pakistan Centre for Philanthropy (PCP) and the Philippine Council for NGO Certification (PCNC) (Shea and Sitar 2004). PCP receives official authorization to act as a “certification agency” by the government of Pakistan. Under 2002 amendments to the Income Tax Act, certification by PCP through its NPO Certification Programme can provide a basis for tax exemption (Shea and Sitar 2004). Similarly, the Government of the Philippines has authorized PCNC to certify NGOs for tax benefits: in fact, despite concerns regarding the pace of certification by PCNC, an NGO operating in the Philippines cannot receive tax benefits without this certification. It is interesting to note that the impetus for the PCNC program was a government threat to remove the tax-benefit status of all NGOs in the country, as they stated it was impossible to distinguish legitimate NGOs from mere tax shelters (Shea and Sitar 2004). Clearly, tax exempt status and benefits provide an important incentive for NGOs to comply with these organizations and receive their certification: non-compliance is simply financially inefficient. | + | Certification Programs with Government Recognition represent instances where an NGO has been given additional legitimacy with which to initiate a certification program to monitor accountability. These are generally country-specific programs which have been entitled to bestow additional benefits to recognized NGOs. Shea and Sitar note two examples of organizations utilizing these types of programs: the Pakistan Centre for Philanthropy (PCP) and the Philippine Council for NGO Certification (PCNC) (Shea and Sitar 2004). PCP receives official authorization to act as a “certification agency” by the government of Pakistan. Under 2002 amendments to the Income Tax Act, certification by PCP through its NPO Certification Programme can provide a basis for tax exemption (Shea and Sitar 2004). Similarly, the Government of the Philippines has authorized PCNC to certify NGOs for tax benefits: in fact, despite concerns regarding the pace of certification by PCNC, an NGO operating in the Philippines cannot receive tax benefits without this certification. It is interesting to note that the impetus for the PCNC program was a government threat to remove the tax-benefit status of all NGOs in the country, as they stated it was impossible to distinguish legitimate NGOs from mere tax shelters (Shea and Sitar 2004). Clearly, tax exempt status and benefits provide an important incentive for NGOs to comply with these organizations and receive their certification: non-compliance is simply financially inefficient. |
| − | + | ||
| + | Other brands of certification are aimed at NGOs that focus fundraising efforts to a broad audience within their country. In addition to seeking accountability, these certification programs enable an NGO to enhance their general credibility with and sometimes access to the general public audience. Three examples of these types of programs are France’s La Charte de deontologie, the German Central Institute for Social Issues’ (DZI) Donation Seal, and Give India. The “Charte” of France established a committee of organizations that monitors compliance with a code of ethics regarding broad fundraising; this committee is then charged with oversight regarding violations of the charter and has the power to allow or refuse use of a “label” on their fundraising literature that symbolizes compliance with this code (Shea and Sitar 2004). DZI similarly issues a “Donation Seal” denoting compliance with its standards and publicly recognizes recipient organizations by printing their names in a semiannual bulletin. Clearly these certifications are expected to give an additional layer of credibility to an organization as it corresponds with the public, stressing independent review of its accountability procedures. Give India utilizes a somewhat different approach: in exchange for compliance with their Credibility Alliance’s norms, an organization is granted access to their web-based donation service, enabling them to potentially garner additional funds. In this instance, the incentive for compliance is potentially very valuable financially, expanding their potential donor base through alliance with a third-party organization that essentially vouches for their procedures pursuant to their norms (Shea and Sitar 2004). | ||
| − | Accreditation | + | ==Accreditation== |
Accreditation and Certification are very similar. Both are voluntary schemes in which an external party evaluates a given organization relative to certain established benchmarks. Further, compliance with norms under both schemes can enhance the credibility of a given organization to the larger world of NGOs and potential donors. | Accreditation and Certification are very similar. Both are voluntary schemes in which an external party evaluates a given organization relative to certain established benchmarks. Further, compliance with norms under both schemes can enhance the credibility of a given organization to the larger world of NGOs and potential donors. | ||
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Examples of this methodology include the Humanitarian Accountability Partnership – International (HAP-I), People in Aid, and the AusAid Accreditation Scheme. Organizations seeking accreditation by HAP-I agree to seven accountability principles and are evaluated against these principles by the HAP-I secretariat. If the secretariat concludes the organization is not meeting its targets, they can be expelled from the scheme (Blagescu, de Las Casas, and Lloyd 2005). People in Aid is generally similar, requiring compliance with a code of practice that sets standards for relief and development organizations comprised of seven principles. However, there is a key difference: People in Aid’s review process is geared towards institutional learning rather than a simple pass/fail regime: thus, a given organization cannot lose its accreditation based simply on an evaluation’s results (Blagescu ,de Las Casas, and Lloyd 2005). | Examples of this methodology include the Humanitarian Accountability Partnership – International (HAP-I), People in Aid, and the AusAid Accreditation Scheme. Organizations seeking accreditation by HAP-I agree to seven accountability principles and are evaluated against these principles by the HAP-I secretariat. If the secretariat concludes the organization is not meeting its targets, they can be expelled from the scheme (Blagescu, de Las Casas, and Lloyd 2005). People in Aid is generally similar, requiring compliance with a code of practice that sets standards for relief and development organizations comprised of seven principles. However, there is a key difference: People in Aid’s review process is geared towards institutional learning rather than a simple pass/fail regime: thus, a given organization cannot lose its accreditation based simply on an evaluation’s results (Blagescu ,de Las Casas, and Lloyd 2005). | ||
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AusAid is different from both, as it benefits from government recognition. As noted above, under certification, government recognition can bestow financial incentives for compliance with a recognized organization’s norms. Compliance with AusAid’s norms include recognition of a Code of Conduct for Nongovermental Development Organizations, maintenance of a board of directors according to certain stated criteria, and “capacity to deliver on its project objectives in a manner that meets its contractual obligations through appropriate risk management and decision making process” (Shea and Sitar 2004). Accreditation under AusAid’s scheme provides eligibility for funding under the AusAid NGO Cooperation Program based on either base or full accreditation: those with full accreditation are eligible for funding with fewer restrictions, whereas, for example, an NGO with base accreditation may only be eligible for a maximum award of about $100,000 as set by an annual planning figure (Shea and Sitar 2004). Requests for full accreditation can require further review, including the use of consultants and assessors at all overseas sites. It should be noted that an NGO with base accreditation may apply for full accreditation two years from the date of the original decision. | AusAid is different from both, as it benefits from government recognition. As noted above, under certification, government recognition can bestow financial incentives for compliance with a recognized organization’s norms. Compliance with AusAid’s norms include recognition of a Code of Conduct for Nongovermental Development Organizations, maintenance of a board of directors according to certain stated criteria, and “capacity to deliver on its project objectives in a manner that meets its contractual obligations through appropriate risk management and decision making process” (Shea and Sitar 2004). Accreditation under AusAid’s scheme provides eligibility for funding under the AusAid NGO Cooperation Program based on either base or full accreditation: those with full accreditation are eligible for funding with fewer restrictions, whereas, for example, an NGO with base accreditation may only be eligible for a maximum award of about $100,000 as set by an annual planning figure (Shea and Sitar 2004). Requests for full accreditation can require further review, including the use of consultants and assessors at all overseas sites. It should be noted that an NGO with base accreditation may apply for full accreditation two years from the date of the original decision. | ||
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Accreditation has a somewhat different purpose in health care services and managed care. Health services and managed care organizations represent a somewhat unique problem, subject to specific legal and regulatory processes. Accreditation is frequently “developed by a professional group or industry as a self-regulatory alternative to more restrictive and extensive public regulatory or licensure requirements” (Pawlson et al. 2005). Thus, in this sector, accreditation has a very different purpose from the examples listed above: although still designed to enhance credibility, in this case its requirements are actually designed to be friendlier to the organization itself than the relevant alternative of licensure. | Accreditation has a somewhat different purpose in health care services and managed care. Health services and managed care organizations represent a somewhat unique problem, subject to specific legal and regulatory processes. Accreditation is frequently “developed by a professional group or industry as a self-regulatory alternative to more restrictive and extensive public regulatory or licensure requirements” (Pawlson et al. 2005). Thus, in this sector, accreditation has a very different purpose from the examples listed above: although still designed to enhance credibility, in this case its requirements are actually designed to be friendlier to the organization itself than the relevant alternative of licensure. | ||
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Accreditation by a third party agency can provide significant assurance to donors to that NGO. However, it is a relatively expensive mechanism, and may prove out of reach for many smaller organizations. | Accreditation by a third party agency can provide significant assurance to donors to that NGO. However, it is a relatively expensive mechanism, and may prove out of reach for many smaller organizations. | ||
| − | Ratings Organization Evaluation/Watchdog Agencies | + | ==Ratings Organization Evaluation/Watchdog Agencies== |
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In this methodology, an independent agency solicits information from the organization under review and then rates it according to their standards, publishing its conclusions on the agency’s compliance. As Shea and Sitar keenly observe, successful use of this method hinges upon the credibility of the rating organization (Shea and Sitar 2004). The rating agency’s standards and rating system are developed internally and then simply applied to an NGO as a gauge for measuring performance. In fact, this method does not always require the participation of the organization under review; many however, do allow some input from that organization, particularly in the form of voluntarily provided information. Ratings are conveyed to the general public, notably donors to these organizations. | In this methodology, an independent agency solicits information from the organization under review and then rates it according to their standards, publishing its conclusions on the agency’s compliance. As Shea and Sitar keenly observe, successful use of this method hinges upon the credibility of the rating organization (Shea and Sitar 2004). The rating agency’s standards and rating system are developed internally and then simply applied to an NGO as a gauge for measuring performance. In fact, this method does not always require the participation of the organization under review; many however, do allow some input from that organization, particularly in the form of voluntarily provided information. Ratings are conveyed to the general public, notably donors to these organizations. | ||
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Blagescu, de Las Casas, and Lloyd note that one example of such an agency: Societe Generale de Surveillance (SGS), a “leading inspection, verification, testing and certification company for the private sector” (Blagescu, de Las Casas, and Lloyd 2005). SGS has recently expanded into the non-profit sector with a benchmarking tool that “provides independent assessment against a number of dimensions drawn from international NGO best practices” (Blagescu, de Las Casas, and Lloyd 2005). The criteria are grouped into four large areas: operational components; contributor’s expectations; management components; and steps towards organizational improvement. The NGO itself conducts an initial assessment whose results are then verified through a five-day audit process. This tool permits the NGO to measure their progress against specific benchmarks and then urges them to raise those standards further. Clearly SGS has established a solid reputation in the private sector: it remains to be seen whether that reputation will transfer to the non-profit sector. Further, their effectiveness will also be determined by their ability to disseminate these ratings to the general public. | Blagescu, de Las Casas, and Lloyd note that one example of such an agency: Societe Generale de Surveillance (SGS), a “leading inspection, verification, testing and certification company for the private sector” (Blagescu, de Las Casas, and Lloyd 2005). SGS has recently expanded into the non-profit sector with a benchmarking tool that “provides independent assessment against a number of dimensions drawn from international NGO best practices” (Blagescu, de Las Casas, and Lloyd 2005). The criteria are grouped into four large areas: operational components; contributor’s expectations; management components; and steps towards organizational improvement. The NGO itself conducts an initial assessment whose results are then verified through a five-day audit process. This tool permits the NGO to measure their progress against specific benchmarks and then urges them to raise those standards further. Clearly SGS has established a solid reputation in the private sector: it remains to be seen whether that reputation will transfer to the non-profit sector. Further, their effectiveness will also be determined by their ability to disseminate these ratings to the general public. | ||
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Shea and Sitar note another example in their work: ForeignAid.com (Shea and Sitar 2004). ForeignAid.com has developed a “NGO Star™ Evaluation System” to measure organizations according to their social impact. Evaluation is completed with input from the organization under review in the forms of both an application and in-house analysis with evaluation based on the dimensions identified by ForeignAid.com; input from ForeignAid.com’s network of donors, international organizations, and academic and community leaders; and a reference check with comments from ForeignAid.com. The ratings scale goes from “C” to “AAA”, with organizations receiving a rating of “BB” or higher considered “ForeignAid certified.” ForeignAid.com then features a list of these certified organizations in their “Global Catalog of Philanthropy,” disseminating the results to their general audience (Shea and Sitar 2004). | Shea and Sitar note another example in their work: ForeignAid.com (Shea and Sitar 2004). ForeignAid.com has developed a “NGO Star™ Evaluation System” to measure organizations according to their social impact. Evaluation is completed with input from the organization under review in the forms of both an application and in-house analysis with evaluation based on the dimensions identified by ForeignAid.com; input from ForeignAid.com’s network of donors, international organizations, and academic and community leaders; and a reference check with comments from ForeignAid.com. The ratings scale goes from “C” to “AAA”, with organizations receiving a rating of “BB” or higher considered “ForeignAid certified.” ForeignAid.com then features a list of these certified organizations in their “Global Catalog of Philanthropy,” disseminating the results to their general audience (Shea and Sitar 2004). | ||
| − | Award Programs | + | ==Award Programs== |
| − | + | ||
| − | + | Award programs are exactly as their name implies: an organization can seek to win a public award, sometimes accompanied by a monetary grant of some kind, from an internationally recognized program based on review of their best practices and impact against various stated benchmarks. In order to be successful, the grantor organization must be able to draw significant attention to their award program and its recipients. In fact, the high public visibility afforded by these programs to its recipients is one of the keys to its effectiveness. The hope is that these awards will draw attention to model organizations and, in particular, the high standards embraced by the grantor organization. | |
| − | + | ||
| − | + | One example of an award program is the Baldrige National Quality Program. These three awards may be presented annually by the President of the United States in each of these categories: manufacturing, service, small business, education, health care and nonprofit. The criteria are as follows: | |
| − | + | * Leadership | |
| − | + | * Strategic Planning | |
| − | + | * Customer and market focus | |
| − | + | * Measurement, analysis, and knowledge management | |
| − | + | * Workforce focus | |
| + | * Process management | ||
| + | * Results | ||
(http://www.nist.gov/public_affairs/factsheet/baldfaqs.htm) | (http://www.nist.gov/public_affairs/factsheet/baldfaqs.htm) | ||
Although this award does not come accompanied with a financial prize, the publicity and exposure granted to recipients is hugely beneficial; furthermore, receipt of this award notes the organization’s best practices and could lead to greater donations. Other award programs with monetary prizes include the Resource Alliance & Khemka Foundations’ India NGO Award, the Social Inclusion Trust Fund’s NGO Innovation Award, and the Red Ribbon Award. | Although this award does not come accompanied with a financial prize, the publicity and exposure granted to recipients is hugely beneficial; furthermore, receipt of this award notes the organization’s best practices and could lead to greater donations. Other award programs with monetary prizes include the Resource Alliance & Khemka Foundations’ India NGO Award, the Social Inclusion Trust Fund’s NGO Innovation Award, and the Red Ribbon Award. | ||
| − | + | Arguably the prime beneficiaries of award programs are the candidate and recipient organizations. Award programs claim that even candidates for these awards benefit tremendously from trying to comply with standards designed to make that organization more sustainable for the future. However, this method can prove costly, even prohibitively so, for some organizations. Expense to the grantor organization is obvious; however, a Booz Allen Hamilton study on the Baldrige National Quality Award also noted significant costs to applicants incurred while these applicants sought to comply with the particulars of the Criteria for Performance Excellence. They also found that recipients had unexpected costs, in the form of heightened expectation and various expenses incurred through participation in annual and regional conferences, as requested by the award administrator, in this case the National Institute of Standards and Technology (Shea and Sitar 2004). | |
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| + | ==Information Agencies== | ||
| + | Information Agencies seek to simply provide a public good: they collect and organize relevant information about NGOs in an effort to better educate the full public of their activities. These agencies do not provide ratings or conclusions related to any particular agency; they merely provide the data so others can judge for themselves. Obviously, the success of these agencies is dependent on two things: their relay of accurate and pertinent information and their ability to reach a very broad audience. Ideally, these services should be free to all end consumers. | ||
| − | + | One example of such an agency is GuideStar.org. According to their website, GuideStar provides free access to information on 1.7 million nonprofit organizations, including compensation reports, news related to reporting requirements, and tax filings. The benefit is clear: the website makes it relatively easy to perform due diligence on an NGO of interest, a task that can be fairly cumbersome if performed through a simple internet search. The agency does not take sides; instead, there is an implicit commitment to accurately relay all pertinent information, whether positive or negative to the organization itself. | |
| + | It is clear that an NGO has numerous options when tackling the task of enhancing accountability. Any of the methodologies described above, as well as combinations of them, can help an NGO to obtain enhanced credibility with various stakeholders and create meaningful systems of accountability within their organization. Once established, however, it is important that the process itself undergo periodic evaluation: this will ensure that compliance becomes a seamless process as the organization develops. For further information on various evaluative methods and their relative strengths and weaknesses, please see “Evaluation in International Organisations [sic]: Background Research for the Evaluation Dimension” by Monica Blagescu, Lucy de Las Casas and Robert Lloyd. As further research is done in this area, other possible mechanisms may also emerge as powerful options, such as multi-stakeholder alliances, government-led models, and legal and regulatory mechanisms. Jane Nelson, in her article “Effecting Change through Accountable Channels,” provides some insight into these potential mechanisms. This is clearly an issue of critical importance to any NGO, whether it is a new or well-established organization. Careful consideration of the various methodologies discussed can only serve to enhance the organization and create a sustainable environment. | ||
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| − | + | ==Works cited== | |
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| − | + | * Blagescu, Monica, Lucy de Las Casas, and Robert Lloyd. Evaluation in International Organisations[sic]: Background Research for the Evaluation Dimension. London: One World Trust, 2005. | |
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| − | + | * BNET Business Dictionary; available from http://dictionary.bnet.com; Internet, accessed 1 February 2008. | |
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| − | Internet | ||
| + | * Ebrahim, Alnoor. “Accountability In Practice: Mechanisms for NGOs.” World Development 31 (2003): 813-29. | ||
| − | + | * ________. Seeking NGO-Donor Partnership for Greater Effectiveness and Accountability. Alexandria: Multilateral Investment Fund (MIF) and Sustainable Development Department (SDS), Inter-American Development Bank (IDB), 2004. | |
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| − | + | * Leader, Nick, “Codes of Conduct: Who Needs Them?” Humanitarian Exchange Magazine 13, March 1999 [journal on-line]; available from http://www.odihpn.org/report.asp?id=1065; Internet; accessed 24 September 2007. | |
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| + | * Pawlson, L. Gregory, MD, Phyllis Torda, MA, Joachim Roski, PhD, and Margaret E. O’Kane. “The Role of Accreditation in an Era of Market-driven Accountability.” The American Journal of Managed Care 11 (May 2005): 290-93. | ||
| − | + | * Shea, Catherine, and Sandra Sitar. NGO Accreditation and Certification: The Way Forward? An Evaluation of the Development Community’s Experience. Washington, D.C.: International Center for Not-for-Profit Law, 2004. | |
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| − | + | ==List of additional readings== | |
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| − | + | *Gibelman, Margaret, DSW, and Sheldon R. Gelman, Ph.D. “Very Public Scandals: An Analysis Of How and Why Nongovernmental Organizations Get in Trouble.” Dublin: International Society for Third-Sector Research (ISTR). 2000. | |
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| + | * MacDonald, Chris, Ph.D. “Considerations For Writing A Code of Ethics.” In Streetwise Small Business Book of Lists, ed. Gene Marks. Cincinnati: Adams Media, 2006. Also available online at http://www.ethicsweb.ca/codes/writing-a-code-of-ethics.html. | ||
| − | + | * Nelson, Jane. “Effecting Change Through Accountable Channels.” Washington, D.C.: Brookings Blum Roundtable. 2007. | |
Latest revision as of 08:38, 17 July 2008
This article originated as an article by the same name prepared by Lucy O. Chang for the NGO Handbook.
Given the growing reach and importance of non-governmental organizations (NGOs), it is essential that they utilize consistent and thorough methods aimed at ensuring accountability to their various stakeholders: donors, their own charter or mandate and staff, and last but certainly not least, the communities and clients they seek to help and serve. Particularly in this age of constant media influence, lapses in NGO accountability frameworks or lack of such frameworks altogether resulting in scandal can cause the public to lose faith in these institutions, thus ruining the reputation and ability of similar organizations to raise money and truly enact change.
One example of such public scandal was that of United Way of America, where then-CEO William Aramony was found guilty of 25 felony charges including conspiracy to defraud the United Way, filing false tax returns and falsifying records to hide the diversion of money; among other things, he used charitable donations to finance a lavish life style, including trips on the Concorde and an expensive condominium. United Way was hurt both by its affiliates delaying payment of voluntary dues to the national organization and public charitable contributions to both United Way and its affiliates dropping up to 30%.
Yet another example is that of American Parkinson Disease Association, where then-CEO Frank Williams was found to have quietly embezzled contribution checks worth more than one million dollars over a seven-year period. (For further information on individual scandals and their impact on these NGOs, please refer to Gibelman and Gelman’s work, Very Public Scandals: An Analysis of How and Why Nongovernmental Organizations Get in Trouble, which notes some areas in which traditional accountability and governance measures have failed.)
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