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Abstract

Nonprofits seek to enhance their reputation for responsible management by joining voluntary regulation mechanisms such as accountability clubs. Because external stakeholders cannot fully observe nonprofits’ compliance with club obligations, clubs incorporate mechanisms to monitor compliance and impose sanctions. Yet including monitoring and sanctioning mechanisms increases the cost of club membership for nonprofits. What factors account for the variation in the strength of monitoring and sanctioning mechanisms in voluntary accountability clubs? An analysis of 224 clubs suggests that stringent monitoring and sanctioning mechanisms are more likely in fund-raising-focused clubs, clubs that offer certification (as opposed to only outlining a code of conduct), and clubs with greater longevity. The macro context in which clubs function also shapes their institutional design: clubs in OECD countries and clubs with global membership are less likely to incorporate monitoring and sanctioning mechanisms than clubs in non-OECD countries and single-country clubs, respectively.

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... In voluntary accountability clubs NGOs jointly design accountability standards which regulate the entrance requirements, what is account for and whether and how non-compliance is monitored and sanctioned. The main reference theory for analyzing voluntary accountability standards of NGOs is club theory-in combination with signaling and principal-agency theory (Gugerty 2009;Tremblay-Boire et al. 2016;Crack 2017). A central question in this vein of research is what the characteristics of weak and strong accountability clubs are. ...
... The body of research on NGO accountability programs discusses factors determining the effectiveness of accountability clubs and factors influencing the credibility of a signal. To the credibility of the signal contributes the strength of the standard-rules for entry and complianceand the robustness of the monitoring, verification and sanctioning system (Gugerty 2009;Prakash and Gugerty 2010;Tremblay-Boire et al. 2016). Higher compliance costs, in form of fees and demanding reporting requirements, affect the credibility positively (Gugerty 2009). ...
... The literature on NGO accountability clubs also stresses that the credibility of a signal is impaired if monitoring and sanctioning mechanisms are weak. Empirical findings show that this is often the weak spot of voluntary selfregulation initiatives of NGOs (Gugerty 2009;Tremblay-Boire et al. 2016). ...
Article
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Considering that the members of the International Non-Governmental Organizations (INGO) Accountability Charter played a prominent role in initiating the first sector supplement of the Global Reporting Initiative for non-governmental organizations (NGO), the purpose of the paper is to investigate their sustainability reporting (SR) practices in order to evaluate to what extent INGO Charter members comply with this voluntary accountability standard for SR. The empirical analysis is based on a content analysis of sustainability reports. The findings indicate that most of the INGO Charter members are far away from a comprehensive reporting practice. Hence, critical voices could assert that their reporting behavior seems to be more in line with facade building than the idea of providing a comprehensive account. By adapting a multiperspective theoretical discourse about the potential and shortcomings of SR to the NGO context, the study contributes to a field-specific theory-based pluralistic critical evaluation of SR as a major cross-sectoral innovation in voluntary accountability initiatives.
... Hence, NGOs need to differentiate from their "competitors" and that differentiation can be achieved through accreditation, transparency, and demonstration of a clear accountability to ensure the NGO's credibility (O'Dwyer & Unerman, 2010;Ospina et al., 2002;Schmitz et al., 2012). NGOs accountability also serves to build trust by demonstrating transparency in the use of financial resources and responsible and ethical behavior that meets stakeholders' expectations (Agyemang et al., 2019;Bryce, 2006;Prakash & Gugerty, 2010;Sloan, 2009).Thus, accountability and reporting instruments could therefore be used to measure the quality of NGO and its reputation (Burger & Owens, 2010;Tremblay-Boire et al., 2016) enabling donors to evaluate the performance and compare the quality of different NGOs. ...
... Costa and Andreaus (2014) propose a conceptual model that provides a mechanism to assess both functional and strategic accountability, its effectiveness and efficiency, and to drive behavior through feedback and readjustment. Another proposal is to join accountability clubs that incorporate mechanisms that monitor compliance and help maintain the necessary standards for the organization (Gugerty, 2009;Tremblay-Boire et al., 2016;Yates et al., 2021). Murtaza (2012) and Yesudhas (2019) stress that, despite NGOs' aspirations for more meaningful and integrated accountability, they prioritize accountability to boards and donors and provide weak accountability to communities. ...
Article
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The growing involvement of non-governmental organizations (NGOs) in solving development problems has led to an increase in the number of NGOs around the world and therefore in their visibility and influence. Although concerns about the role and responsibility of NGOs have been raised from more than 20 years, there is still a need to ensure good practices in NGOs and to determine what measures will improve NGOs’ accountability to their stakeholders. Our study aims to contribute to this initiative from the donor accountability approach. To achieve this goal, we conducted a systematic literature review and bibliometric analysis to analyze the constraints and needs that donor accountability pose to NGOs. Our findings suggest that donor accountability could interfere with NGOs’ activities, leading them to generate short-term results, focus more on financial results, and feel increased pressure on overhead costs. The most recent literature opens an opportunity, however, to make upward accountability more useful for NGOs. Following this trend, we propose that donor accountability be considered as a dimension to assess NGO quality so that it becomes a powerful marketing tool to attract and retain donors.
... Voluntary schemes need tough rules to distinguish highperforming from low-performing organizations to provide credible reputational signals (Gugerty 2009). Government initiatives, especially those enacted in countries that are not members of the Organisation for Economic Co-operation and Development, thus tend to have more stringent enforcement mechanisms than those sponsored by private entities (Tremblay-Boire, Prakash, and Gugerty 2016). Newer schemes like 5A accreditation also need stronger monitoring and sanctioning mechanisms to gain legitimacy (Hager, Galaskiewicze, and Larson 2004). ...
... Voluntary programs are rising in the Global South as an important accountability mechanism (Breen et al., 2017;Gugerty 2009Gugerty , 2010Sidel 2010), much as they are in North America (Bromley and Orchard 2015) and Europe (Cordery 2013). They are even taking on transnational forms (Tremblay-Boire et al. 2016). Yet we know little about how and under what conditions nonprofits in the Global South are willing to participate in this new regulatory regime. ...
Article
Around the world, voluntary programs are an increasingly prevalent regulatory instrument in governing nonprofit organizations. But accounts of mechanisms driving nonprofits’ participation in those programs are underdeveloped. This article combines and expands insights from voluntary regulation and institutional work theories to examine the impact of government’s informal relational work on nonprofits’ regulatory participation. Drawing on interviews and survey data from a random sample of 203 nonprofits in Shenzhen, China, the authors study the country’s pioneering government-sponsored voluntary accreditation program and its varying receptions among nonprofits. The empirical analysis shows that politically embedded nonprofits, those with closer organizational connections with the local government, are more likely to participate in accreditation. Since government agencies rely on existing regulatory networks to conduct relational work at both organizational and personal levels to persuade or cajole nonprofits to participate, they tend to direct their recruitment efforts towards more politically embedded nonprofits. However, these targeted recruitment practices may generate reactions much more complicated than the dichotomy of acceptance versus resistance, which ultimately facilitates some nonprofits seeking accreditation while deterring others.
... According to the broad perspective, the larger public rather relies on general cues or signals that may be derived from an organization's self-assessments, statements relating to the organizational mission and values as well as fundraising activities, annual reports, or websites. Third-party organizations such as watchdogs and funding agencies, or even word-of-mouth, and the media can provide additional signals to inform the public's assessments of the organization's trustworthiness [13,14]. It follows that nonprofit organizations, in turn, must be able to identify and communicate trust building signals to stakeholders and the larger public to cultivate trust within their network of relationships [12]. ...
... Precisely, voluntary nonprofit accountability strategies address the trust-driving mechanisms by their ability to signal adherence to the organization's mission and core values, and regarding the quality of organizational performance [32]. These strategies further contribute to the organizational reputation by joining high-reputational initiatives [13], and they particularly strengthen compliance with certain transparency and accountability standards, also through (external) certifications that attest the organization's adequate use of contributions [37,53]. ...
Chapter
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Trust in the nonprofit domain has been subject to a large interest both among scholars and practitioners over the past few years. Today, we differentiate between a range of different forms of trust, namely, organizational and sectoral trust as well as more generalized and institutional trust. Another differentiation in nonprofit literature relates to the subject that forms trust towards a nonprofit organization, reflected by the strength of the individual-organizational-relationship. In that, two forms of trust, namely, a narrow form of relational trust and broader trust among the public have evolved. While previous research provides varying conceptual approaches for explaining public’s trust in the nonprofit sector, most scholars, however, approach public trust from a rather narrow relationship management perspective. This chapter conceptualizes and operationalizes public trust from a broader perspective and emphasizes that to get public support to ultimately further their missions, nonprofit organizations should strive for building, maintaining, and restoring public’s trust. This chapter accordingly presents five mechanisms that are associated with public’s trust in nonprofit organizations: 1) promise of mission and values, 2) organizational reputation, 3) transparency and accountability, 4) performance and social impact, and 5) use of contributions. Thereby, recent trends in academic literature are identified—nonprofit branding and nonprofit accountability—that have great ability to address these mechanisms to successfully improve public trust. Results from this chapter provide nonprofit scholars with insights into a broader conceptualization and operationalization of public trust in nonprofit organizations, and with future research ideas. Nonprofit managers may benefit by gaining insights into how to sustainably improve trust among the general public by focusing on nonprofit branding and accountability strategies.
... Funding: The authors received no financial support for the research, authorship, and/or publication of this article. (Tremblay-Boire et al., 2016). In contrary to Hansmann (1987), who claimed NPOs to be trustful per se because of the nondistribution constraint, scholars now highlight the need for NPOs to actively engage in trust building activities (Willems et al., 2017). ...
... Third-party certification is a formal, independent recognition by an external organization that confirms that a prescribed standard of performance has been achieved (Mart ı-Ballester and Simon, 2017). Third-party certification adds external validation to the organizational claims and help to regain trust among organization stakeholders (Tremblay-Boire et al., 2016;Willems and Faulk, 2019). For example, in the context of business schools, various formal reputational signals are used in the form of third-party accreditations such as Association of Master's of Business Administration (AMBA) or European Quality Improvement System (EQUIS), which contribute in building schools' image and reputation among the external stakeholders and students alike (Elliott, 2013). ...
Article
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Purpose- This paper aims to untangle the underlying mechanisms through which reputational signals promote stakeholders' intentions to donate in nonprofit organizations via stakeholder trust. Design/methodology/approach- The authors apply a moderated mediation model using an experimental design with N 5 248 business and public management students of France. Findings- The results indicate that both a formal reputational signal (third-party certificate) and an informal reputational signal (self-proclaiming to be social entrepreneurial) affect stakeholder trust and intentions to donate. Stakeholder trust partially mediated the relationship between the formal signal and intentions to donate, and the mediation effect was stronger when an informal signal was present (vs. not present). Practical implications- Trust is central to the exchange of nonprofit organizations and their external stakeholders. To enhance trust and supportive behavior toward nonprofit organizations, these organizations may consider using formal and informal reputational signaling within their marketing strategies. Originality/value- This research highlights the pivotal role of formal and informal reputational signals for the enhancing stakeholders' trust and donation behavior in a nonprofit context.
... The nature and rigor of these mechanisms vary widely, however, and evidence on their value in signaling virtue is mixed (Gugerty 2009;Willems et al. 2017;Becker 2018). While there is an indication that certification systems involving substantial self-and peer assessment and ongoing monitoring enhance public trust and intention to donate (Bekkers 2003;Feng, Neely, and Slatten 2016;Becker 2018;Peng, Kim, and Deat 2019), the effectiveness of clubs requiring only self-proclaimed adherence to standards is generally assessed to be weak (Gugerty 2009;Tremblay-Boire, Prakash, and Gugerty 2016). Third party watchdogs, such as Charity Navigator and GuideStar (now Candid), among many others, claim to overcome the disclosure deficit of self-regulation by providing independent assessments and ratings, again with the assumption that nonprofits will strive to achieve higher ratings and that such ratings will be used by potential supporters to make informed decisions about giving and volunteering. ...
... Although a variety of accountability clubs exist in the global humanitarian aid sector, as in the nonprofit sector as a whole, most function as voluntary codes without monitoring of adherence or means of collective peer-to-peer learning. Consequently, many are criticized for being mainly symbolic, with participation aimed at satisfying the requirements of major funders (Hammad and Morton 2011;Barnett 2016;Tremblay-Boire, Prakash, and Gugerty 2016). A stronger accountability system will require more effective sector self-regulation and closer integration of self-with state regulation. ...
Article
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Investigations of how Oxfam Great Britain (GB) managed its safeguarding systems and handled revelations of sexual exploitation by its staff highlighted a variety of internal governance and culture issues, and a lack of transparency as it sought to protect its reputation. The current models of reputation management do not fully explain its actions, however. This article argues that five systemic factors in the environment in which nonprofits operate create undue pressures for protection of reputations and contribute to poor assessment of risks, inadequate accountability systems and limited transparency. These factors include: a stress on success and related competition for market share and pressures for growth; expectations of low overheads; challenges of governance and risk management; lack of public awareness; and regulatory gaps. Drawing on media coverage and the commissions of inquiry, the analysis shows how all of these contextual factors were at play in the Oxfam case, and suggests potential reforms.
... Whether regulated or not, there is concern that entities may be victims of fraud (Tremblay-Boire et al., 2016), especially when they receive taxation concessions and the public purse is impacted. As regulatory monitoring should reduce fraud (including tax fraud), it is important to understand the potential tax foregone (for example, in respect of surpluses and investments). ...
... There is growing concern for regulation to address fraud, misuse of funds or to increase entities' reputations, including improving the donation 'market' (Cordery et al., 2017;Tremblay-Boire et al., 2016). Yet, mutual-benefit entities do not operate in a 'donation market', instead they operate in a 'member market' and search for legitimacy. ...
Article
Purpose The purpose of this paper is to analyse nonprofit regulation through comparing and contrasting mutual-benefit and public-benefit entities. It ascertains how these entities differ in size, publicness, tax benefits and whether these differences might suggest regulatory costs should be differentiated. Design/methodology/approach This mixed-methods study utilises financial data, submissions and interviews. Findings There are stark differences in these two types of regulated nonprofit entities. Members should be the primary monitoring agency/ies for mutual-benefit entities, but financial reports should be understandable to these members. Nevertheless, the availability of tax concessions, combined with the benefits of limited liability, suggest mutual-benefit entities should be regulated and monitored by government in a way sympathetic to their size. Research limitations/implications As with most research, a limitation is this study’s focus on a single jurisdiction. Practical implications The differences in these entities’ characteristics are important for designing regulation. Social implications Better regulation is likely to require a standard set of financial reporting standards. Government has the right to demand disclosures due to benefits mutual-benefit entities enjoy. Originality/value In comparison to studies utilising only public-benefit data, this study uses unique data sets to compare public-benefit and mutual-benefit entities and presents nonprofit sector participant’s perceptions of these differences in context. This enables analysis of how better regulation could be achieved.
... Concurrently, the sector suffers from a contamination problem, whereby the reputations of legitimate, ethical charities are tarnished by the misbehaviorperceived or otherwiseof other organisations (Burger & Owens, 2010;Ortmann & Schlesinger, 1997). Tremblay-Boire, Prakash, and Gugerty (2016) attribute the generation of these negative reputational externalities to the information asymmetries in activities and outcomes that exist between charities and their stakeholders. In response to this gap, the same authors argue that credible charities have an incentive to differentiate themselves from less credible ones for the purpose of enhancing their reputations. ...
... These charities are perhaps best considered "early adopters", as they demonstrate a motivation to embrace a novel means of discharging accountability. Consequently, "early adopter" organisations may be using the reporting scheme to signal their credibility and concern with good governance to the regulator (Phillips, 2013;Tremblay-Boire et al., 2016). These are distinguished from charities who may report In Future; they have appropriate governance in place, but have not yet experienced a serious incident. ...
Article
Charities are under increasing pressure to be accountable. Using a novel dataset, we provide the first analysis of the characteristics of charities voluntarily disclosing details of serious incidents that may threaten their organisation. Financial loss, fraud and theft, and personal behavior account for a majority of serious incidents reported. Larger, older organisations that have previously been subject to a regulatory investigation are more likely to report serious incidents. However, it is smaller, younger charities where the regulator perceives there to be greater risk of organisational demise arising from the incident. HIGHLIGHTS • Financial loss, fraud/theft, and personal behaviour most common incidents reported. • A clear link between the type of incident and the regulator's response. • Larger, older charities previously subject to an investigation more likely to report. • Regulator identifies a greater risk of organisational demise for smaller charities. • Deeper understanding of the size and distribution of risk in the charity sector.
... Some recent scholarship on US charity regulation has focused on a general overview of state and federal regulation, the division of regulatory authority between state and federal regulators, or the shift from federal to state-level oversight of charities (e.g., Lott & Fremont-Smith, 2017;Mayer, 2016;Mayer, 2019;Mead, 2019). Other scholarship has discussed to what extent the government or other quasi-governmental entities should regulate charities (Galle, 2018;Irvin, 2005;Keating & Frumkin, 2003;Mayer & Wilson, 2010;Young et al., 1996); charity self-regulation (Bies, 2010;Fishman, 2015;Tremblay-Boire et al., 2016); and special topics, such as the regulation of charitable crowdfunding (Mayer, 2022). ...
Article
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The bulk of charity regulation in the United States occurs at the state level, yet state‐level charity regulation remains relatively under‐researched within nonprofit scholarship, particularly from a comparative perspective. The complexity and variation in statutory regulation, coupled with the large volume of legal research required to study state‐level charity regulation systematically, has impeded scholarly progress toward a better understanding of the US charitable sector. We address this problem by deriving a state‐level charity regulatory breadth index (RBI) that will enable nonprofit researchers to contextualize state‐level charity research within a broader framework and to incorporate state‐level regulation into analyses across states. Policymakers can also benefit from the ability to benchmark their regulatory regimes against their peers.
... For example, Appe (2016) documented how network partners set up collective communication channels in Latin America to increase shared legitimacy and accountability. Moreover, a substantial body of literature has focused on the role of regulatory bodies and regimens, transorganizational codes of conduct and watchdog organizations established to induce transparency and accountability in organizational networks (Dawson and Dunn, 2006;Phillips, 2013;Szper and Prakash, 2011;Tremblay-Boire et al., 2016). ...
Chapter
Despite the vast repertoire of practitioner and scientific literature since the early 1990s on how civil society organizations (CSOs) should be governed, we continue to regularly hear stories of severe organizational crises. Even well-respected, internationally active CSOs sometimes find themselves in the middle of a media storm (Archambeault and Webber, 2018; Cordery and Baskerville, 2011; Harris et al., 2018; Willems, 2016; Willems and Faulk 2019). It is naïve to assume that such events will cease in the future or at least stop endangering the sustainability and continuity of CSOs. Nevertheless, an explicit evaluation of how crisis situations can be avoided and how their devastatingly negative effects can be mitigated through CSO governance processes makes it necessary to focus on CSO accountability and transparency. As a result, the clarification and elaboration of the concepts of accountability and transparency can strengthen theoretical and practical insights as to how CSOs can become more crisis-resistant and resilient (Brown, 2005; Helmig et al., 2014). In addition, insight into the inherent trade-offs that CSO leadership teams need to consider in their governance decisions can help both practitioners and researchers to (1) avoid more CSO crisis situations in the future, (2) more effectively overcome such crises when they occur and (3) identify the contextual and organizational factors affecting leaders' governance decisions. Against this background, the aim of this chapter is threefold: 1. Provide an elaborated definition of CSO transparency and accountability that takes into account the nature and role of CSOs in contemporary societies. After highlighting the uniquely defining characteristics of CSOs, the chapter identifies from the inter-disciplinary literature a set of circumstances that underpin the need for a multidimensional elaboration of transparency and accountability specific to CSOs. 2. Document governance responsibilities that CSOs have with respect to transparency and accountability. The chapter explains why transparency and accountability are necessary elements of the CSO governance function. 3. Develop propositions for further scientific elaboration and validation of how CSO governance practices encompass but also support and lead to CSO transparency and accountability. The output of the first two research aims is juxtaposed with five dimensions of a governance quality index, highlighting how governance quality dimensions include and relate to various aspects of CSO transparency and accountability.
... Regulation and governance codes for NPOs are issued not only by public regulatory agencies (as in the United Kingdom), but also by private accountability clubs (Gugerty and Prakash, 2010;Tremblay-Boire et al., 2016), which are voluntary associations of nonprofits with the goal of providing their members with monitoring and reputation enhancement. 'Accountability clubs can be viewed as voluntary mechanisms for regulation by reputation. ...
Book
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Edited by Gemma Donnelly-Cox (Trinity College Dublin, Ireland), Michael Meyer (WU Vienna, Austria) and Filip Wijkström (Stockholm School of Economics, Sweden), this multi-perspective Research Handbook provides a clear pathway through the nonprofit governance research field, pushing beyond the borders of current theory to expand and deepen the analytical framework for nonprofit governance. It offers an analysis of the basics including definitions, organizational forms and levels of governance, and takes a critical approach towards the normative and prescriptive tendencies in much of contemporary governance scholarship.
... To identify standards for coding, we consulted recent global inventories of standards from the relevant literature (i.e., Tremblay-Boire, Prakash, & Gugerty, 2016) and inventories of global NGO and civil society associations from major international associations, including CIVICUS and Forus. In addition, we conducted our own search for entities engaged in standard-setting for nonprofits, NGOs, and other global development actors. ...
Article
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For several decades, the aid effectiveness movement has called for more robust, informed and independent impact evaluation of aid activities, but the prevalence and adoption of these practices remain unclear. This article seeks to understand the current state of impact evaluation practice in the development field by examining standard-setting documents intended to guide the behavior of entities involved in development assistance. We explore these standards as representations of institutional logics that encode current norms, practices, and expectations for these actors and examine the extent to which impact evaluation norms and practices are enshrined within these standard-setting documents. To do so, we examine guidance from a diverse set of 42 standards to better understand how evaluation is conceptualized and what standards are being articulated. We find both convergence and divergence in the institutional logics employed and in how evaluation norms and practices are incorporated into standards. We see convergence in the adoption of a normative, process-oriented logic that appears across many entities in the widely articulated commitment to practices such as information sharing, participation, and listening. We find more divergence in the adoption of a results-oriented logic that implies a commitment to impact evaluation. These distinct logics give rise to two discrete discourses: an “evaluation generalist” discourse that conceptualizes evaluation in broad terms and an “impact centric” discourse that articulates a more comprehensive set of principles emphasizing causal attribution. We suggest that structural characteristics and positionality in the aid system may help explain the adoption of different institutional logics and associated evaluation practices.
... The explanatory intuition is as follows. Given the information asymmetry between NFPs and their donors, the latter often face the problem of not being able to distinguish efficient organisations from less credible ones (Tremblay-Boire et al., 2016). Thus, donors require signals that help them identify organisations deserving their support. ...
Article
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The not-for-profit literature has not fully explored the decision-usefulness of financial disclosures with respect to the public’s donation intentions. Engaging with this lacuna, this study proposes that reputation and trust serve as important causal links between donors’ perceptions of the decision-usefulness of financial disclosures and their donation intentions. The study adopts the theory of planned behaviour and applies structural equation modelling to 400 useable responses from an Australian survey. The study finds: (1) a strong link between financial disclosures which donors perceive as decision-useful and their perception of the reputation of the reporting not-for-profit organisation (NFP), (2) a close association between donors’ perception of the reputation of an NFP (that is, their behavioural belief) and their trust in the organisation (their attitude), and (3) a significant link between donors’ trust in an NFP and hence their attitude towards the organisation with respect to their donation intentions. These results imply that the decision-usefulness of an NFP’s financial disclosures make donors more inclined to donate to the NFP via the impact of disclosures on donors’ perceptions of reputation and thence trustworthiness. In addition to contributing to the emergent NFP literature on disclosures and giving behaviour, these findings inform financial disclosure policies and practice by furthering the case for decision-useful financial disclosures among NFPs.
... Regulations and governance codes for NPOs are issued not only by public regulatory agencies (e.g. in the UK), but also by private accountability clubs (Gugerty and Prakash 2010;Tremblay-Boire, Prakash, and Gugerty 2016), i.e. voluntary associations of non-profits with the goal of providing them with monitoring and reputation enhancement. ' Accountability clubs can be viewed as voluntary mechanisms for regulation by reputation. ...
Chapter
The non-profit governance literature is emerging, multilevel, and disparate. This chapter provides a critical review of the scholarly literature on non-profit governance, identifies the distinctive and currently most important theoretical frameworks in the field, and outlines the models of good non-profit governance that have emerged, discussing their main traits. The chapter also examines the positions and roles ascribed in the literature to constituents, stakeholders, and other claimant groups involved in non-profit organisations and develops a novel approach to distinguishing between analytically different categories of claimants. The approach is proposed as a tool for future non-profit governance research. After acknowledging the limitations of its scope and identifying upcoming issues in non-profit governance, the chapter concludes with discussion of three lacunae in the current scholarship on non-profit governance that need to be addressed.
... Organizations have multiple stakeholders. Although some stakeholders' needs and preferences align with the organization's mission, the same are likely to compete or conflict with those of other stakeholders (Modi & Mishra, 2010;Tremblay-Boire, Prakash, & Gugerty, 2016). Public-serving organizations provide a fruitful context for this contribution, because of both variations in the relative attractiveness of public-serving missions among individuals and the diversity in the ways through which stakeholders are asked to support organizations. ...
Article
This study investigates the impacts of negative and positive signals on public-serving organizations’ reputations. We draw on socio-cognitive perspectives to test how organizations’ breaches of stakeholders’ trust are repairable over time as well as the moderating effect of organizational mission valence on this forgiveness process. Multilevel data from two slope-shift experiments (n = 304; n = 582) show that mission valence, or individuals’ affinity with an organization’s mission, intensifies the effects of both negative and positive signals in organizations’ reputation building processes. Negative signals have stronger negative effects on intentions to support the organization for individuals with high mission valence. However, the effect of successive positive signals is also stronger for individuals with high mission valence, suggesting greater forgiveness following a stronger breach of trust among these stakeholders.
... Regulations and governance codes for NPOs are issued not only by public regulatory agencies (e.g. in the UK), but also by private accountability clubs (Gugerty and Prakash 2010;Tremblay-Boire, Prakash, and Gugerty 2016), i.e. voluntary associations of non-profits with the goal of providing them with monitoring and reputation enhancement. ' Accountability clubs can be viewed as voluntary mechanisms for regulation by reputation. ...
Chapter
Im Rahmen dieses Beitrags wird ein Einstieg in die Diskussion zum Thema Corporate Governance von Non-Profit-Organisationen (NPO) geliefert, indem ein Überblick über unterschiedliche wissenschaftliche und alltagspraktische Verständnisse von Governance gegeben wird. Wissenschaftliche Governanceverständnisse werden charakterisiert, indem die Hauptmerkmale des politikwissenschaftlichen, des betriebswirtschaftlichen und des soziologischen Zugangs zur Governance dargestellt werden. Alltagspraktische Governanceverständnisse werden anhand einer Typologie dargestellt, die von betriebswirtschaftlicher über familiäre, professionalistische und zivilgesellschaftliche bis hin zu basisdemokratischer Governance reicht. Abschließend werden Überlegungen zur Zukunft der Governance von NPO angestellt. Eine weitere Verbreitung des betriebswirtschaftlichen Governance-Diskurses ist wahrscheinlich. Alternative Governance-Zugänge bleiben jedoch notwendige Gegenpole, die wohl in Nischen des Non-Profit-Sektors weiterbestehen werden.
... These theoretical frameworks warrant future research to test measures of relevant constructs, such as nonprofit-donor goal alignment, changes in public donation trends, and organizations' motivations for self-regulation. For instance, AbouAssi and Bies's study (2018) of environmental nonprofits in Lebanon suggests that nonprofits' self-regulation and accountability practice are not simply driven by resource dependence or external parties' mandatory requirement; instead, it may be driven by nonprofits' selfmotivated responsiveness to donors, beneficiaries, and nonprofit peers (AbouAssi and Bies 2018; Prakash and Gugerty 2010;Tremblay-Boire et al. 2016). ...
Article
Organizational transparency has become a prominent concern for the nonprofit sector as it expands globally. Transparency is important to organizational accountability, which may be indicated by how nonprofits allocate their resources. In this study, we examine the relationship between nonprofits’ transparency and their resource allocation to programs, administration, and fundraising. Our study focuses on China, where a nascent nonprofit sector is playing increasingly significant roles in social development while facing public trust challenges. Based on Agency Theory and Resource Dependence Theory, we propose two hypothesized frameworks that link transparency to resource allocation, and use the 2013–2015 China Grassroots Organizations’ Transparency Survey data (n = 370) to test this relationship. Our results suggest that nonprofits with higher transparency allocate more resources to programs rather than administration, a possible result of the current public scrutiny of nonprofit accountability in China. Our findings provide implications for nonprofit practitioners and future research about the significance of organizational transparency, particularly in emerging nonprofit sectors.
... As to norm-compliance, researchers have put much of their intellectual efforts in understanding what factors account for the variation in the strength of monitoring and sanctioning mechanisms (Boire, Prakash & Gugerty, 2016), while, other scholars have measured to extent to which NGOs comply with regulatory standards focusing on the Global Reporting Initiative: findings point out low level of norm-compliance (Traxle, Greiling & Hebesberger, 2018). On a theoretical level, it was argued that noncompliance might result from willful/strategic shirking and from mere confusion or ignorance (Prakash & Gugerty, 2010). ...
... Nonprofit organization and management is one of the most usable topics for researchers around the world (e.g. Jang et al., 2016;Malatesta & Smith, 2014;Peng, Pandey, & Pandey., 2015;Tremblay-Boire, Prakash, & Gugerty, 2016). In addition, it appears that Iranian researchers' efforts have been toward localizing the legal system, as well as into abstract and practice. ...
Article
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This study aims to examine the trends of public administration research in Iran during 2004–2017. A total of 520 articles from three databases have been reviewed and analyzed using content analysis. Results are reported based on research themes, purposes, orientations, methods, and authorship. Comparisons are made across two time spans and by journal type. Findings indicate that the focus of public administration research has been on issues of public administration, Islam and public administration, administrative performance, and organizational behavior in the public sector. Observations reveal that recent Iranian research studies have more explanatory purposes and often apply qualitative methods. The study also concludes that the Iranian public administration research has advanced considerably over the past 14 years, but more efforts are needed to fill in the gap in such important areas as new public service, civic participation, globalization, policy making, sound governance, and policy implementation.
... Regulations and governance codes for NPOs are issued not only by public regulatory agencies (e.g. in the UK), but also by private accountability clubs (Gugerty and Prakash 2010;Tremblay-Boire, Prakash, and Gugerty 2016), i.e. voluntary associations of non-profits with the goal of providing them with monitoring and reputation enhancement. ' Accountability clubs can be viewed as voluntary mechanisms for regulation by reputation. ...
... This issue is the result of corruption, ineffectiveness, or opportunistic practices (Burger 2012), and fraud tends to affect public perceptions of the entire sector negatively. Although reputation can be influenced by circumstances beyond organizations' control, some scholars argue that organizations need to develop a reputational capacity themselves (Tremblay-Boire et al. 2016) in order to strengthen their image of trustworthiness. Willems (2016) identifies continuous improvement practices as the main factor that enhances nongovernmental development organizations' ability to withstand crises. ...
Article
Public scrutiny and the need for funds in a more competitive environment are pressuring nonprofits to be more consciously aware of their reputation. This study used automated analysis with text mining and topic modeling of 177 articles directly linked to nonprofits’ reputation and published up to 2016. After identifying the most salient topics and conducting an in-depth, critical review of the most significant articles within each topic, four theoretical and managerial implications were identified. First, managers need to develop skills to deal with risk, the Internet, and social networks. Second, risk management is an emergent, still tentative, but important topic waiting for more contributions. Third, researchers can apply lexicons developed and validated by experts to uncover knowledge relevant to the entire nonprofit sector’s organizations. Last, the trends and topics highlighted can help scholars and practitioners make better decisions in research or responses to management challenges.
... This often occurs through various transparency and public accountability mechanisms. For public agencies, this may take the form of open government initiatives or requirements of the Government Performance and Results Act (1993), while for nonprofits, this may involve Internal Revenue Service Form 990 disclosures, information intermediation through nonprofit rating, ranking, and certification organizations (Mitchell, 2014b), and voluntary self-certification schemes or "accountability clubs" (Gugerty, 2009;Tremblay-Boire, Prakash, & Gugerty, 2016). In both sectors, the role of public and nonprofit organizations acting as delegates on behalf of society imposes similar duties to demonstrate public accountability in ways that diverge from the obligations of, for example, privately owned businesses. ...
Article
The fields of public administration and nonprofit management have experienced convergence over the past decades, particularly as academic programs, conferences, and journals in public administration have increasingly embraced nonprofit management. Given the significance of this development, the lack of a formal theoretical basis for convergence is surprising and potentially problematic. This article attempts to formalize such a basis by expositing the shared constitutive features of public and nonprofit management. These features include social goods provision, outcome ambiguity, delegation, and surplus nondistribution. Analysis of these features—and consideration of alternative explanations—demonstrates that a consolidated field of “public and nonprofit management” may be warranted by definite theoretical principles. The existence of this theoretical basis may provide stakeholders with opportunities to approach and manage the process of convergence more strategically.
... Self-regulation includes third-party quality certification (as observed in parts of central Europe from as early as 1893 -Bies, 2010) which may result in a formal 'seal of approval' requiring ongoing monitoring to ensure compliance (for example, as introduced in Germany in 1992 -Bies, 2010). Third-party seals are also evident in Austria and the Netherlands, although recent research indicates possible weaknesses in the monitoring of compliance and sanctioning of members in those jurisdictions (Tremblay-Boire et al., 2016) which could weaken the reputational benefit of such seals. Further, Bies (2010) suggests the Swiss seal has developed into an aggressive third-party regulatory 'watchdog' instrument (more akin to command and control). ...
Article
Internationally, there are strong calls for charities’ formal annual reporting to include non-financial performance information. Without the international standards common in other sectors, national accounting standard-setters often regulate charities’ reporting. Lacking evidence on approaches to encouraging/mandating charity performance reporting, and the effectiveness of these approaches, we ask: “How have different jurisdictions responded to calls for increasing performance reporting?” We conduct a benchmarking study that indicates differences in current reporting practices between Australia, New Zealand, the United Kingdom and the United States. By discussing both current regimes and proposed projects, we develop and illustrate a typology of regulatory approaches to performance reporting. These range from command and control, where standard-setters mandate specific performance reporting standards, through to market regulation, where charities and/or sector bodies acting as regulatory entrepreneurs determine what is to be reported. Between these extremes, the typology describes new governance approaches, with standard-setters partnering and collaborating with other actors. These approaches lead to different requirements with potentially significant implications for performance accountability in the respective jurisdictions. We argue that our regulatory typology contributes useful insights for the many jurisdictions grappling with how to regulate their charity sector and encourage performance reporting.
... As such, the TR is similar to other voluntary programs where transparency (and hence increased opportunities for accountability) represents core outputs, like some of the so-called "accountability clubs" non-profits join to distinguish them- selves from fraudulent counterparts (see e.g. Tremblay-Boire et al. 2016), or multi-party global sectoral programs like the Extractive Industries Transparency Initiative (see e.g. Haufler 2010;David-Barrett & Okamura 2016). ...
Article
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This article offers a systematic exploration of why interest groups sign up to the European Union Transparency Register, a non‐binding lobby regulation system. We distinguish between instrumental and normative perspectives to explain voluntary compliance, and find that concern for one's reputation represents the most important motivational driver. Based on this, we suggest that the Transparency Register can be understood as a “voluntary club” sponsored by European institutions. This theoretical perspective captures the appeal of the instrument among lobbyists, but also a number of inconsistencies in its current design, which make it unviable in the long term. We outline implications for the ongoing reform of the Transparency Register, and more generally for the regulation of lobbying activities. The analysis draws on semi‐structured interviews with various types of lobbyists active in Brussels, and on data from public consultations organized by the European Commission.
... Starting in the 1980s, the rise of the Reagan-Thatcher perspective, the "reinventing government" movement, and the alleged "flight" of the manufacturing sector from developed countries to "pollution havens" in developing countries ( Cao and Prakash 2010 ;Jaffe et al. 1995 ) led to the emergence of new policy instruments such as VEPs. VEPs compel firms to invest in environmental policies beyond their legal obligations and, in return, offer an environmental branding and reputation ( Tremblay-Boire, Prakash, and Gugerty 2016 ) that allows participants to signal their environmental stewardship ( Darnall and Kim 2012 ;Potoski and Prakash 2004 ). The expectation is that this signal will motivate stakeholders to reward firms for their environmental actions through reputational benefits, regulatory relief, higher market shares, customer loyalty, and higher product prices ( Gunningham, Kagan, and Thornton 2003;Prakash and Potoski 2006 ). ...
Article
This article investigates the mechanisms that voluntary environmental program (VEP) participants adopt to reduce pollution. The focus of this article is the 33/50 program, a VEP introduced by the U.S. Environmental Protection Agency in 1991 and discontinued in 1995. The program called for emissions reductions for 17 chemicals reported to the Toxics Release Inventory. Using a sample of approximately 12,000 plants, the relationship between 33/50 program participation and adoption of pollution reduction practices is studied for three time periods, 1991–1995 (program life), 1996–2004, and 2005–2013. These practices include source reduction activities (SRAs) and recycling, recovery, and treatment (RRTs). The major findings are that during the program's life, 33/50 participants showed increased adoption of SRAs and RRTs for both targeted and nontargeted chemicals. However, once the program ended, higher adoption rates persisted for RRTs only, with a shift in emphasis toward treatment over recycling and recovery.
... The formal signals focused on in this study are signals that are validated externally, such as third-party certifications that an organization can use in its communication to stakeholders (Tremblay-Boire, Prakash, & Gugerty, 2016). It is a form of accreditation, enabling NPOs to differentiate themselves from other organizations "on the basis of credibility and performance" (Slatten et al., 2011, p. 113), and serves as an indicator for managerial competence verified by an external third party. ...
Article
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In this study, we experimentally test the impact of a formal signal (a third-party certificate) and an informal signal (self-proclaimed management quality with respect to social entrepreneurship) on stakeholder supportive intentions and perceived organizational effectiveness. Our study confirms the social entrepreneurship advantage, but we find no proof of a convincing effect from the formal signal. However, complementary analyses and additional testing of control variables add new perspectives on the relative importance of the social entrepreneurship advantage and on potential moderators that could better explain in future studies the varying effects and specific contextual elements that influence formal and informal reputation-building signals.
... estándares de transparencia y diferenciarse de las "manzanas podridas"(Tremblay-Boire, J, (2016), quien agrega que su estudio de referencia sugiere que estos clubes "parecen débiles en términos de monitoreo y sanción, lo que implica que la mayoría de ellos no proveen de una fuerte señal en favor de la reputación de las OSC, que sea suficiente para diferenciar a las legítimas de las oportunistas". Así, estas iniciativas voluntarias no ayudan a detectar casos de fraude o de malos manejos financieros, debido principalmente a que el carácter privado de las OSC las exime de someterse a los controles y normas que se aplican a las entidades del sector público, a las que las OSC se niegan a ser sometidas.Gugerty y Pakash (2008) proponen que la accountability es un discurso narrativo, desde una perspectiva de ecología organizacional, en el que los registros contables y de actividades deben ser, por lo menos, verosímiles.Presentan un libro en el que, desde diversos puntos de vista, describen la composición de estos clubes, que han proliferado, según su texto, debido a los grandes escándalos internacionales, mismos que reducen la habilidad de las OSC para reunir fondos. ...
Thesis
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Las Organizaciones de la Sociedad Civil (OSC) son principalmente no lucrativas, por lo que su eficiencia y eficacia no pueden ser medidas por resultados como el rendimiento sobre inversiones o los ingresos —que son en general donativos—. En su mayoría son proveedoras de servicios, tienen un fin social y características y ciclos de vida diferentes a los de las empresas lucrativas. Las nociones de eficiencia (relación insumo-producto) y eficacia (relación entre lo realizado y lo planeado) tienen relevancia en el ámbito de estas organizaciones, debido a la escasez de los recursos y a su necesidad de transparencia para seguir obteniéndolos, así como informar puntualmente a los actores interesados y al público acerca del resultado de su gestión. Estos términos han sido analizados por académicos, quienes han pasado de las tradicionales mediciones unidimensionales cuantitativas a propuestas multidimensionales, en las que cobran relevancia aspectos como el desempeño de los equipos de trabajo, el logro de metas, la captación y empleo de recursos, considerando al prestigio como el centro de la eficacia, por lo que es necesario hacer énfasis en el ejercicio de la transparencia en su información y su rendición de cuentas ante los grupos involucrados con ellas o stakeholders.
... Voluntary self-regulatory programs have emerged as an important category of such assurance and signaling mechanisms. They can be viewed as collective mechanisms for creating and conveying a signal of trustworthiness (Tremblay-Boire et al. 2016;Gugerty and Prakash 2010;Sidel 2009Sidel , 2010. While popular in the for-profit sector (Vogel 2005), voluntary programs have gained traction in the charity sector as well (Lloyd and de las Casas 2005;Sidel 2009Sidel , 2010Bothwell 2001). ...
Article
When making charitable donations, individuals would like to have some assurance that their resources will be used appropriately, but they do not necessarily have the time to research charities thoroughly. Charities have thus joined voluntary regulatory programs to signal trustworthiness and good governance. We conduct a survey experiment to explore if individual donors in the United States are more willing to give to a charity participating in a voluntary regulatory program. Because voluntary programs vary in their institutional design, we further test whether the provision of third-party auditing (to ensure that charities abide by program rules and obligations) enhances donor confidence in the voluntary program. Finally, we explore whether individuals seek to circumvent information problems by donating to local charities as opposed to overseas charities. We find that charity membership in a voluntary program does not influence people’s willingness to donate significantly, but that location of operations is significant.
... Codes of conduct, self-regulation schemes, certification systems, and accountability clubs have become additional means for transmitting accountability norms across the sector (Gugerty, Sidel, & Bies, 2010;Tremblay-Boire, Prakash, & Gugerty, 2016). Indeed, prior research suggests that normative pressures "net of instrumental concerns" operating through "coercive, normative, and mimetic mechanisms" largely account for the proliferation of codes of conduct over time (Bromley & Orchard, 2015, p. 14). ...
Article
Nonprofit managers are influenced by managerial logics that guide their everyday understandings, decisions, and behaviors. This article identifies, conceptualizes, and examines these logics through the lens of institutional theory, which implies a distinction between normative and instrumental modalities of nonprofit managerialism. These modalities are contrasted across seven domains of nonprofit management—portfolio management, organizational growth and capacity-building, fundraising, collaboration and competition, effectiveness, efficiency, and accountability—generating insights for managers, scholars, and society at large. Specifically, the framework identifies contradictory managerial imperatives that can create a “double bind” for practitioners, provides a mechanism for organizing and positioning nonprofit management scholarship, and raises fundamental questions about the attainability of nonprofit missions and the function of the nonprofit sector in society.
... Prominent NGOs such as Oxfam and Save the Children have reorganized their international decision-making processes to protect their brands and enhance their reputations for effectiveness (Stroup and Wong 2013). The numerous NGO selfregulatory mechanisms, including the International Red Cross Code of Conduct and the INGO Accountability Charter, are ways that NGOs attempt to signal to an audience that they are accountable and transparent Crack 2013;Tremblay-Boire et al. 2016;Ebrahim 2003). Yet the reputational concerns of NGOs can also be disconnected from their program activities and social change goals. ...
Article
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This article explores the reputations of transnational non-governmental organizations (NGOs) and their determinants. Although the concept of reputation has received extensive treatment in international relations, NGO reputation has received less attention. Yet reputations are critical to the construction of NGO authority and to patterns of collaboration. We develop a framework for studying NGO reputation. We then provide empirical evidence on the construction of a particular dimension of NGO reputation, that of organizational effectiveness from the perspective of NGO peers. Based on a mixed-method, in-depth interview study of transnational NGO leaders, we identify specific factors associated with NGOs’ effectiveness reputations among their peers. Larger, older, more highly visible organizations, organizations adopting hybrid strategies, and organizations headquartered outside of Washington, DC enjoy higher reputations for organizational effectiveness. Our analysis provides context for understanding the influence of transnational NGOs in world affairs and offers insight into the role of reputation in global politics more generally.
... For example, such a dynamic could be said to support the development of "voluntary accountability" (Karsten 2015 ;Koop 2014 ;Schillemans 2011 ), that is, practices initiated by the actor that go beyond formal requirements. Standards of accountability implicit in voluntary regulation mechanisms and certification procedures, for instance, could be another illustration of such unilateral attempts aimed at cultivating a positive organizational image and expanding one ' s support basis (Tremblay-Boire, Prakash, and Gugerty 2016 ). A whole range of organizations have taken to indicating their commitment to environmental, social, or other "good citizenship" activities, without any form of major interest by a specific forum. ...
Article
Accountability is said to be about the management of expectations. Empirical studies reveal considerable variation in organizational interest, intensity and investment in accountability relationships. Less is known, however, as to what explains these observed variations. Drawing on accountability and reputation-concerned literatures, this paper argues that a reputation-based perspective to accountability offers an underlying logic that explains how account-giving actors and account-holding forums actually manage these expectations, how organisations make sense of and prioritise among accountability responsibilities. Reputational considerations act as a filtering mechanism of external demands and help account for variations in degrees of interest in, and intensity of, accountability. The resulting accountability outcomes are co-produced by the reputational investment of both account-giver and account-holder, resulting in distinct accountability constellations and outcomes
Chapter
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2 3 0 CHAPTER 12 Change G eopolitical shifts, the emergence of new competitors, greater demands for accountability, and gaps between rhetoric and practice present profound challenges to the future of TNGOs. Yet the relative comfort of the status quo encourages complacency and incremental action, not trans-formative change, in the face of these challenges. If TNGOs genuinely want to be agents of fundamental change, not simply charitable conduits, then they need to take more decisive steps beyond moving their headquarters, adopting the latest digital tools, and diversifying staff and leadership. Such measures in themselves are important, but the sector's full potential can only be realized through an even more radical questioning of the sector's own architecture. Many of the current measures taken by TNGOs reflect repeated reactive adaptations to mounting external pressures without challenging the broader systems within which TNGOs operate. What is missing are more proactive and audacious steps designed to change the legacy structures that shape how TNGOs understand their purpose, make strategic decisions, and operate globally. Many future-oriented practitioners are well aware of the challenges that the TNGO sector faces. Even as many of them acknowledge the need for change, many also remain hesitant about diverting organizational attention and resources to addressing the sector's own internal issues. To overcome these anxieties and ambivalences, it is important to first identify the root causes of the perceptions of a crisis in the sector as well as the reasons for why decisive actions are so difficult to take.
Article
We unpack trust and its underlying emotional and cognitive dimensions over time, based on a case study of a Colombian human-rights NGO and its donors. The emotional trust dimension is anchored in the values and interests that the NGO and its donors share. The cognitive trust dimension is grounded in the control and reporting practices of the NGO and its donors. We highlight the dynamic nature of trust by showing how the emotional and cognitive dimensions shape trust over time as the NGO-donor relationship progresses. Depending on the relationship stage, trust can be grounded relatively more or less in its emotional and cognitive dimensions. Across the different stages of the relationship, the two trust dimensions are complements and reinforce one another. Our study highlights that trust in NGOs is not replaced by accountability, as accounting and civil society research argues. Instead, accountability and trust, especially its emotional dimension, are mutually constitutive.
Article
Non-governmental organizations (NGOs) are pivotal actors in international affairs. They manage billions of dollars in funding, work all around the world, and shape global policies and standards. It thus comes as no surprise that the subject of accountability has drawn the interest of an increasing number of scholars across disciplines. Though there seems to be agreement about its desirability, accountability is also described as chameleon-like and ambiguous. And despite calls for more cross-disciplinary learning and conceptual clarity, there does not exist a comprehensive review of accountability conceptualizations across and within disciplines, or how the different meanings relate to each other. Based on the conceptual review of 217 research articles published within the last twenty years, this study identifies and analyzes conceptualizations of accountability in the major journals of five engaged disciplines: accounting, development studies, international relations and political science, organization studies and management, and public administration. Integrating this broad scholarship reveals that: (1) there exist 113 different conceptualizations of accountability, 90 of which are rarely used and appear in less than 5 percent of all analyzed articles, (2) scholars have used forty-three different conceptualizations in 2019 compared to seventeen conceptualizations in 2009, (3) many conceptualizations refer to same phenomena by different name (duplication), and different phenomena by the same name (conflict), and that (4) conceptual ambiguity contributes to ambiguity among the forty different terms used to measure and operationalize accountability. These findings illustrate a lack of cross-disciplinary learning and accumulation of knowledge, and suggest that new conceptualizations be introduced only if one or more of the 113 existing ones don't already capture an idea sufficiently. The purpose of this article is to serve as a concept map for scholars when debating and charting new directions for the study of accountability.
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Donor states may delegate to other actors to deliver aid through partnerships. We ask whether some partnerships are more effective than others with democratization aid. We identify five actors, arguing that they can affect the recipient’s democracy outcomes via the fungibility of the funds. We hypothesize that organizations that have relationships of accountability and dependency to the donor are most likely to use aid for its intended purposes (least fungible), making them the most likely to see positive effects on democratization. Those that do not have these relationships may use the money for other purposes, making them the least likely to see positive effects on democratization. We test these with data from 32 OECD countries and 126 recipients from 2004 to 2018. Using the electoral indicator from the Varieties of Democracy project, we find that NGO- and IGO-delivered aid is associated with significantly larger increases in a democracy than aid delivered by corporations.
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Issues of accountability, legitimacy and trust have remained at the forefront of debate surrounding non‐profit organisations and their activities. The purpose of this study is to review the literature on non‐profit accountability from the lens of organisational legitimacy. Specifically, we ask what we can learn from the literature on non‐profit organisation (NPO) accountability and consider what further work needs to be done to strengthen NPO legitimacy. We attempt to go beyond mere gap‐spotting and seek to challenge the current status quo within this body of literature.
Article
Transnational NGOs (TNGOs) confront challenging operational environments in the pursuit of their missions. Less attention is typically paid to the cultural and regulatory home environments of TNGOs that can also shape their influence and impact. As US-based TNGOs confront criticisms about their accountability, legitimacy, and effectiveness, this article critically examines the impact of the cultural and regulatory environments for US-registered TNGOs. Because of the prominence of US-based organisations in TNGO governance structures and in the global development sector more generally, features of the US environment can have significant repercussions for the sector as a whole.
Preprint
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In den letzten Jahrzehnten hat das Streben nach Effizienz und Effektivität des Managements viele öffentliche und zivilgesellschaftliche Organisationen verändert. Viele öffentliche Organisationen – wie z.B. die deutschen öffentlichen Universitäten im oben beschriebenen Fall – haben sich im Zuge der New Public Management Reformen als eigenständige Einheiten neu organisiert. Eine solche Umstrukturierung hat die Chance erhöht, dass kontextspezifische Management- und Führungspraktiken eingeführt werden. So können die öffentlichen Universitäten nun beispielsweise freier über die Verwendung der Mittel entscheiden. Die Umstrukturierung hat jedoch auch die Notwendigkeit erhöht, dass die Organisationen ihre Leistungen managen und darüber berichten, um somit langfristig ihre Reputation gegenüber externen Stakeholdern aufzubauen. Dies können sie erreichen, indem sie das richtige Maß an Transparenz wahren und ihren Stakeholdern gegenüber Rechenschaft ablegen. Öffentliche Universitäten bemühen sich nun mehr um ihr Image, z.B. indem sie Hochglanzbroschüren drucken und ihre Jubiläen feiern. Gleichzeitig wird von ihnen mehr Transparenz bezüglich ihrer Prozesse und Wirkungsbereiche erwartet. Wenn zivilgesellschaftliche Organisationen für den Staat die Erbringung öffentlicher Leistungen übernehmen, dann geschieht dies zunehmend auf Basis von Leistungsverträgen mit komplexen Leistungs- und Zielvereinbarungen. Infolgedessen ist bei zivilgesellschaftlichen Organisationen die Notwendigkeit gestiegen, ihre Leistung, ihre Reputation, ihre Transparenz und ihre Rechenschaftspflicht gegenüber staatlichen Akteuren zu verwalten und zu steuern. Auch die Erwartungen privater Geldgeber/innen sind gestiegen, weil Skandale im Zusammenhang mit dem Missbrauch von Spendengeldern Spender/innen sensibilisiert haben (in Österreich z.B. der berüchtigteWorld Vision Skandal von 1998, der schließlich zur Einführung des österreichischen Spendengütesiegels führte). Aktuelle Trends in Richtung Venture Philanthropy und Impact Investment haben die Anforderungen privater Geldgeber/innen in Hinblick auf die Rechenschaftslegung von NPOs weiter erhöht.
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Chapter 12 summarizes the main themes of the book, with an emphasis on how the sector’s future potential remains constrained by its normative and institutional architecture. To help ensure future success, TNGOs can invest in organizational metamorphosis and sector-wide collective action. Metamorphosis may involve a polycentric model, embracing a facilitation role, adopting a hybrid model, engaging in deeper collaborations, pursuing mergers and acquisitions, and investing in operational platforms. However, such initiatives will require significant change leadership, which introduces its own substantial challenges. Ultimately, TNGOs can best serve their missions not only by changing themselves, but by also organizing collectively to change the architecture in which they operate.
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In the absence of a statutory instrument to enforce payment of a regulatory fee, regulators must rely on a combination of “carrots” and “sticks” to encourage financial contributions by the organizations they oversee. In contrast to studies of public funding of nonprofits, this article empirically evaluates the effectiveness of a government policy to rely on nonprofit funding of statutory regulation. The authors exploit a sharp discontinuity in the eligibility threshold for charities contributing to the new Fundraising Regulator in England and Wales to estimate a causal effect of the levy on participation. The article shows that the regulator's threat to “name and shame” was effective at incentivizing regulatory participation and generating income, but it raises some concerns about the long‐term viability of this approach. The results are significant at a time when many jurisdictions are considering how best to fund the regulation of nonprofits.
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Instrumental philanthropy has gained attention and popularity in recent decades as an approach to maximizing the impact of giving. This article evaluates the suitability of the nonprofit institutional form, specifically the US public charity, as a vehicle for instrumental philanthropy. The analysis identifies an incongruity between the informational requirements of instrumental philanthropy and the form and theory of the nonprofit. An alternative theory of licensure is proposed to illustrate the difficulty of the information problem. Analysis suggests that the viability of instrumental philanthropy hinges upon information costs. Several public policy options are considered as means of better supporting instrumental philanthropy, presuming that allocative efficiency in the production of public benefits is a desirable public policy objective.
Conference Paper
Virtual Call centers are increasingly becoming a new trend amongst organizations. However, this is not the case for most developing countries. This study explores the virtual call center phenomenon as a new innovation amongst organizations in the Western cape of South Africa. The purpose is to examine the factors that influence adoption, specifically the lack of adoption of virtual call center. The study follows a qualitative approach and in-depth interviews were conducted with five organizations within the call center industry. The findings show that the virtual call center is still perceived as a new innovation that is yet to be successfully implemented due to, among other factors, the lack of trialiability and observability within the industry; technology readiness and data security concerns; organizational culture and the socio economic status of employees. The study has both managerial and policy implications.
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This article synthesizes the literature on organizational capacity in an effort to improve our understanding of the relationship between capacity and various measures of nonprofit effectiveness. I define capacity as the means by which organizations achieve effectiveness, and propose a contingency model to explain how different measures of nonprofit effectiveness (via goal attainment, system resources, and the multiple constituencies models) suggest distinct ways of conceptualizing and assessing nonprofit capacity. Drawing from organizational theory, I consider capacity in terms of resource streams and operational activities. The article proposes a contingency model that will assist researchers in examining the extent to which particular organization capacity variables relate to different measures of organizational effectiveness. It also provides practitioners a useful tool for understanding and assessing nonprofit capacity and effectiveness in different scenarios, in light of various internal and external factors.
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Charities are under increasing pressure to be accountable. Using a novel dataset, we provide the first analysis of the characteristics of charities voluntarily disclosing details of serious incidents that may threaten their organisation. Financial loss, fraud and theft, and personal behaviour account for a majority of serious incidents reported. Larger, older organisations that have previously been subject to a regulatory investigation are more likely to report serious incidents. However, it is smaller, younger charities where the regulator perceives there to be greater risk of organisational demise arising from the incident.
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Self-regulation emerges as an option in response to government control of the institutional environment of nonprofit organizations (NPOs). While most research focuses on conceptualizing and arguing for self-regulation, this study examines self-regulation through the lens of the institutional perspective by focusing on a specific institutional domain of NPOs in Lebanon. Results indicate that a certain degree of normative isomorphism, through professionalization, has a positive impact on NPOs’ participation in self-regulation while mimetic practices do not yield the same results; coercive isomorphism is not a significant predictor. The results allude to certain implications both for management practices and for scholarly research.
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The INGO Accountability Charter is the only global, cross-sectoral regulatory initiative for international NGOs. This is the first independent study of perceptions of its effectiveness, based upon 26 in-depth semi-structured interviews with key individuals from 11 leading international NGOs. Firstly, it analyzes interviewees’ beliefs about the motivations of NGOs in joining the Charter. The findings contribute to the scholarly debate about the key drivers for voluntary regulation between ‘club theorists’ and ‘constructivists’ by demonstrating that NGO behavior in this regard is both self-interested and norm-guided. Secondly, it investigates the extent to which the interviewees believe that the Charter has been effective in enhancing the accountability of its members. Their responses further underline the applicability of club theory and constructivist explanations of NGO behavior, and lead to several policy recommendations about the future direction of Charter.
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This paper investigates perceptions of the extent to which NGO peer-regulation initiatives have been effective in enhancing levels of accountability across the humanitarian and development sector. It is based upon semi-structured interviews with individuals with responsibility for accountability policy from leading NGOs and focuses on two of the best-known initiatives: HAP and Sphere. It finds that the initiatives have prompted positive changes in practice, but there are significant concerns about their deleterious impacts. Participants describe a host of challenges, including the tendency of peer-regulation to become excessively bureaucratic and labor-intensive. They cast some doubt on the potential of the initiatives to assist NGOs to be more accountable to people and communities.
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Much has been written during the last two decades about the theory of nonprofit organizations (NPOs). Researchers, policy makers, and practitioners in NPOs have repeatedly asked themselves variants of the following set of questions: • What do NPOs do that for-profit firms (FPFs) and government agencies are not doing already? • Do NPOs operate as efficiently as their for-profit counterparts? • Do NPOs serve the same broad groups as government units do? • Should NPOs receive special tax treatment?
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How does program sponsorship influence the design of voluntary programs? Why and how do voluntary programs on climate change sponsored by the state and federal governments in the United States vary in their institutional design? Scholars emphasize the signaling role of voluntary programs to outside stakeholders, and the excludable benefits that induce firms to take on non‐trivial costs of joining voluntary programs. Scholars have noted several types of benefits, particularly reputational benefits programs provide, but have not systematically studied why different programs emphasize different types of benefits. We suggest that excludable benefits are likely to take different forms depending on the institutional context in which program sponsors function. We hypothesize that federal programs are likely to emphasize less tangible reputational benefits while state programs are likely to emphasize more tangible benefits, such as access to technical knowledge and capital. Statistical analyses show the odds of a voluntary program emphasizing tangible benefits increases by several folds when the program is sponsored by the state as opposed to federal government.
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▪ Abstract With tools borrowed from the economic analysis of insurance, principal-agency theory has allowed political scientists new insights into the role of information asymmetry and incentives in political relationships. It has given us a way to think formally about power as the modification of incentives to induce actions in the interests of the principal. Principal-agency theory has evolved significantly as political scientists have sought to make it more applicable to peculiarly political institutions. In congressional oversight of the bureaucracy, increasing emphasis has been placed on negotiation of administrative procedures, rather than the imposition of outcome-based incentives, as originally conceived. Awareness of the problem of credible commitment has impelled more dramatic reformulations, in which agents perform their function only when their interests conflict with those of the principal, and they are guaranteed some degree of autonomy. The ‘political master’ finds himself in the position o...
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Although the importance of the public policy environment for strategic action of nonprofit organizations has become increasingly clear, research on nonprofits is often divorced from their policy context. The purpose of this article is to present a theoretically informed framework for analyzing policy environments that can inform nonprofit research. Drawing on insights from political science, organization theory, public management, and nonprofit studies, the authors propose that the framework reflects a policy field that is an identifiable set of elements in a specific environment that directly shapes local public service provision. These elements include the structures created by institutions that deliver public programs and the ways in which state and local actors interact with and shape these structures as they work on public problems. Through a research example, the article presents the policy field framework's analytic steps.
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Considers structural inertia in organizational populations as an outcome of an ecological-evolutionary process. Structural inertia is considered to be a consequence of selection as opposed to a precondition. The focus of this analysis is on the timing of organizational change. Structural inertia is defined to be a correspondence between a class of organizations and their environments. Reliably producing collective action and accounting rationally for their activities are identified as important organizational competencies. This reliability and accountability are achieved when the organization has the capacity to reproduce structure with high fidelity. Organizations are composed of various hierarchical layers that vary in their ability to respond and change. Organizational goals, forms of authority, core technology, and marketing strategy are the four organizational properties used to classify organizations in the proposed theory. Older organizations are found to have more inertia than younger ones. The effect of size on inertia is more difficult to determine. The variance in inertia with respect to the complexity of organizational arrangements is also explored. (SRD)
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This article examines the trust hypothesis: the claim that asymmetric information can explain the existence of non-profit enterprise in certain markets. We argue that this hypothesis, in order to be viable, has to meet three challenges: ‘reputational ubiquity’, ‘incentive compatibility’ and ‘adulteration’. Drawing on modern agency theory, we conclude that the trust hypothesis stands on shaky ground. It can be sustained only under particular conditions that have been neither carefully described in theory nor subject to empirical assessment. The available evidence, patchy and inadequate as it is, seems to suggests that there are some ownership-related differences in aspects of organisational performance connected with asymmetric information. However, there is little evidence that this relates to trustper se or provides a rationale for the existence of non-profit ownership in these industries. We conclude with a plea for substantial research on consumer expectations and provider motivations.
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Principal-agent models have been the basis for an extensive set of studies relating bureaucracy to elected officials. Yet despite the outpouring of research, there has been little attempt to test the basic assumptions of the principal-agent model. The model makes two assumptions: that goal conflict exists between principals and agents and that agents have more information than their principals, which results in an information asymmetry between them. But how valid are these assumptions? Can instances be found in which these assumptions do not hold? What happens when we vary these assumptions? In this article, we present both a critique of the traditional principal-agent model and a presentation of a broader theoretical framework for conceptualizing bureaucratic politics.
Book
How can nonprofit organizations and NGOs demonstrate accountability to stakeholders and show that they are using funds appropriately and delivering on their promises? Many nonprofit stakeholders, including funders and regulators, have few opportunities to observe nonprofit internal management and policies. Such information deficits make it difficult for 'principals' to differentiate credible nonprofits from less credible ones. This volume examines a key instrument employed by nonprofits to respond to these challenges: voluntary accountability clubs. These clubs are voluntary, rule-based governance systems created and sponsored by nongovernmental actors. By participating in accountability clubs, nonprofits agree to abide by certain rules regarding internal governance in order to send a signal of quality to key principals. Nonprofit voluntary programs are relatively new but are spreading rapidly across the globe. This book investigates how the emergence, design, and success of such initiatives vary across a range of sectors and institutional contexts in the United States, the Netherlands, Africa, and Central Europe.
Article
Concerns about unethical and poor performance in the nonprofit sector have led to discussions of accountability and regulation, along with varied attempts to promote principles of best practice, codes of conduct, and ethical guidelines for the sector. Incentives are being crafted to encourage organizations to adopt specific practices beyond what is legally or administratively required (Gugerty, 2009). The sources of standards for practice include watchdog agencies such as the Better Business Bureau, agencies attempting to serve as the voice of the sector such as Independent Sector, and others. Attempts to shape nonprofit organizations have included simple statements of best practices, basic codes of ethics, customized standards of practice, and comprehensive certification programs. The specificity of the guidelines offered and the mechanisms for monitoring compliance vary greatly. No set of standards or principles has achieved a level of prominence and acceptance that suggests it has become widely institutionalized. What appear to be among the most endorsed and democratically produced efforts (e.g., The Donor Bill of Rights, The Accountable Nonprofit Organization, and Independent Sector's ethical guidelines) have all been characterized as failing miserably (Bothwell, 2001). Not only may bad behavior go uncorrected if standards and principles are not enforceable, the principles themselves may be criticized for not allowing adequate flexibility or, conversely, for being too vague. In the business sector, accountability programs created and managed through industry and trade associations to signal members' quality and adherence to standards have come under increasing scrutiny by researchers.
Article
What makes for a good theory in economics? Tastes and opinions differ on this important issue, with some admiring the mathematical elegance and logical completeness of analysis, some admiring the metaphoric insight provided by deep description, and others admiring the development of new analytic tools rather than the application of those tools to nonprofit issues. In this Chapter, I choose to evaluate economic theories of the nonprofit sector by their ability to answer what I regard as the central questions in (a) describing the sector; (b) formulating governmental policy towards the sector; and (c) managing nonprofit organizations. More specifically, I discuss theories’ ability to enlighten our understanding of the scope of inquiry, the determinants of the size and scope of the nonprofit sector, and the behavioral responses of donors, volunteers, paid staff, and nonprofit organizations to changes in their external environment. I then turn, more briefly and selectively, to theories’ ability to inform tax policy towards donations, taxation of nonprofit entities, competition among and between organizations in the various sectors, and fundraising regulation. Finally, I briefly discuss theories’ ability to improve the pricing, fundraising, and evaluation functions of nonprofit management.
Article
Andreas Ortmann and Mark Schlesinger, in their article “Trust, Repute, and the Role of Nonprofit Enterprise,” examine what they term “the trust hypothesis,” namely “the claim that asymmetric information in the markets for certain goods and services can explain the existence of nonprofit enterprise in those markets” (this volume). There is much that is sensible in what they say, and they have performed a valuable service in pulling together some of the more recent empirical literature on asymmetric information in markets heavily populated with nonprofit firms. I have some concerns, however, both with respect to the authors’ formulation of the trust hypothesis and with their approach to its verification.
Article
Why do some nonprofits signal their respect for accountability via unilateral website disclosures? We develop an Accountability Index to examine the websites of 200 U.S. nonprofits ranked in the Chronicle of Philanthropy’s 2010 “Philanthropy 400.” Our intuition is that nonprofits recognize that the “nondistributional constraint” by itself may not generate sufficient trust. We expect nonprofits’ incentives for website disclosures will be shaped by their organizational and sectoral characteristics. Our analyses suggest that nonprofits appearing frequently in newspapers disclose more accountability information while nonprofits larger in size disclose less. Religion-related nonprofits tend to disclose less information, suggesting that religious bonding enhances trust and reduces incentives for self-disclosure. Nonprofits in the health sector disclose less information, arguably because governmental regulations in which they are embedded reduce marginal benefits from voluntary disclosures. Education nonprofits, on the other hand, tend to disclose more accountability information perhaps because they supply credence goods.
Article
Three years after the terrorist attacks on New York City and Washington, D.C., confidence in charitable organizations continues to languish well below its pre-September 11 levels. Despite hopes that the confidence would rebound with the mere passage of time, the controversies surrounding disbursement of the September 11 relief funds and subsequent nationally-visible scandals surrounding the Nature Conservancy and several private foundations appear to have left a durable imprint that has yet to fade. The number of Americans who express little or no confidence in charitable organizations increased significantly between July 2001 and May 2002, and remains virtually unchanged to this day. (See Tables 1 and 2 attached to this fact sheet.) As I argue in Sustaining Nonprofit Performance: The Case for Capacity Building and the Evidence to Support It, which is being released by the Brookings Press at the same time as this fact sheet, charitable organizations did not get any of the post-September 11 "rally" in confidence that boosted government and other civic institutions, but received all of the decline as America returned to a semblance of normalcy in 2002. As a result, confidence in charitable organizations stands roughly 10-15 percent lower today than it was in the summer of 2001.
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This article examines how the quality of domestic regulatory institutions shapes the role of global economic networks in the cross-national diffusion of private or voluntary programs embodying environmental norms and practices. We focus on ISO (International Organization for Standardization) 14001, the most widely adopted voluntary environmental program in the world, which encourages participating firms to adopt environmental stewardship policies beyond the requirement of extant laws. We hypothesize that firms are motivated to signal environmental stewardship via ISO 14001 certification to foreign customers and investors that have embraced this voluntary program, but only when these firms operate in countries with poor regulatory governance. Using a panel of 129 countries from 1997 to 2009, we find that bilateral export and bilateral investment pressures motivate firms to join ISO 14001 only when firms are located in countries with poor regulatory governance, as reflected in corruption levels. Thus, our article highlights how voluntary programs or private law operates in the shadow of public regulation, because the quality of public regulation shapes firms' incentives to join such programs.
Book
The second edition of The Nonprofit Sector provides a novel, comprehensive, cross-disciplinary perspective on nonprofit organizations and their role and function in society. This new, updated edition keeps pace with industry trends and advances as well as with the changing interests and needs of students, practitioners, and researchers. As before, every chapter has been written to stand on its own, providing sufficient background for the reader to follow the argument without referring to other chapters-allowing readers to selectively choose those chapters that are most relevant to a particular course, interest, or issue. The Nonprofit Sector: A Research Handbook includes twenty-seven new or updated chapters. Relevant chapters from the previous edition have been refined, and new chapters have been added to fill in gaps, making this the authoritative reference for all who want an accessible, perceptive, and all-inclusive rendering of the nonprofit sector. The contributors-prominent scholars in their respective fields-carefully reflect upon the variety of changes in the rapidly growing world of nonprofits, examining a wide array of organizations, international issues, social science theories, and philanthropic traditions and covering a broad range of topics including the history and scope of nonprofit activities in the United States and abroad, the relation of nonprofits to the marketplace, government-nonprofit issues, key activities of nonprofits, aspects of giving to and joining nonprofits, and nonprofit mission and governance. For anyone who wishes to have a deeper understanding of the nonprofit sector, this remains the essential guide. © 2006 by Walter W. Powell, Richard Steinberg, and Yale University. All rights reserved.
Article
How do public regulations shape the composition and behavior of non-governmental organizations (NGOs)? Because many NGOs advocate for liberal causes such as human rights, democracy, and gender equality, they upset the political status quo. At the same time, a large number of NGOs operating in the Global South rely on international funding. This sometimes disconnects from local publics and leads to the proliferation of sham or “briefcase” NGOs. Seeking to rein in the politically inconvenient NGO sector, governments exploit the role of international funding and make the case for restricting the influence of NGOs which serve as foreign agents. To pursue this objective, states worldwide are enacting laws to restrict NGOs’ access to foreign funding. We examine this regulatory offensive through an Ethiopian case study, where recent legislation prohibits foreign-funded NGOs from working on politically sensitive issues. We find that most briefcase NGOs and local human rights groups in Ethiopia have disappeared, while survivors have either “rebranded” or switched their work from proscribed areas. This research note highlights how government can and do shape the population ecology of the non-governmental sector. Because NGOs seek legitimacy via their claims of grassroots support, a reliance of external funding makes them politically vulnerable. Any study of the NGO sector must include governments as the key component of NGOs’ institutional environment.
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This paper relates quality and uncertainty. The existence of goods of many grades poses interesting and important problems for the theory of markets. On the one hand, the interaction of quality differences and uncertainty may explain important institutions of the labor market. On the other hand, this paper presents a struggling attempt to give structure to the statement: “Business in under-developed countries is difficult”; in particular, a structure is given for determining the economic costs of dishonesty. Additional applications of the theory include comments on the structure of money markets, on the notion of “insurability,” on the liquidity of durables, and on brand-name goods.
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Ecological studies have consistently reported that younger organizations are more likely to close or disband than older organizations. This article uses neo-institutional theory and social capital theory to explore this finding. We derive hypotheses from these perspectives and test them on a panel of nonprofit organizations in Minneapolis-St Paul (USA) using event history analysis. We find that larger organizations and organizations more dependent upon private donations are less likely to close, and government funding reduces the age effect on mortality; that is, older and younger publicly funded organizations are equally likely to survive or fail. However, among older organizations, not having government funding increases chances of survival. In contrast, volunteer staffing accentuates the age effect. Older organizations that were more dependent on volunteers had a lower likelihood of closure than younger organizations dependent on volunteers, while age had no effect on closure for organizations not dependent on volunteers. We conclude by examining our findings in light of the extant thinking on the liability of newness and the role of institutional and network embeddedness on the chances of organizational survival.
Article
The general topic of this chapter is the relation of the society outside organizations to the internal life of organizations. Part of the specific topics have to do with the effect of society on organizations, and part of them concern the effects of organizational variables on the surrounding social environment. I intend to interpret the term “social structure” in the title in a very general sense, to include groups, institutions, laws, population characteristics, and sets of social relations that form the environment of the organization. That is, I interpret “social structure” to mean any variables which are stable characteristics of the society outside the organization. By an “organization” I mean a set of stable social relations deliberately created, with the explicit intention of continuously accomplishing some specific goals or purposes. These goals or purposes are generally functions performed for some larger structure. For example, armies have the goal of winning possible military engagements. The fulfillment of this goal is a function performed for the larger political structure, which has functional requirements of defense and conquest. I exclude from organizations many types of groups which have multiple purposes (or which perform multiple functions for larger systems, whether these are anyone's purposes or not), such as families, geographical communities, ethnic groups, or total societies. 1 also exclude social arrangements built up on the spur of the moment to achieve some specific short-run purpose. For instance, I will not consider a campaign committee for some political candidate as an “organization,” although a political party would definitely meet the criterion of continuous functioning and relatively specific purposes.
Article
Property in transition (Book I, chapter 1) …The typical business unit of the 19th century was owned by individuals or small groups; was managed by them or their appointees; and was, in the main, limited in size by the personal wealth of the individuals in control. These units have been supplanted in ever greater measure by great aggregations in which tens and even hundreds of thousands of workers and property worth hundreds of millions of dollars, belonging to tens or even hundreds of thousands of individuals, are combined through the corporate mechanism into a single producing organization under unified control and management.… Such an organization of economic activity rests upon two developments, each of which has made possible an extension of the area under unified control. The factory system, the basis of the industrial revolution, brought an increasingly large number of workers directly under a single management. Then, the modern corporation, equally revolutionary in its effect, placed the wealth of innumerable individuals under the same central control. By each of these changes the power of those in control was immensely enlarged and the status of those involved, worker or property owner, was radically changed. The independent worker who entered the factory became a wage laborer surrendering the direction of his labor to his industrial master. The property owner who invests in a modern corporation so far surrenders his wealth to those in control of the corporation that he has exchanged the position of independent owner for one in which he may become merely recipient of the wages of capital.
Article
International crises are modeled as a political “war of attrition” in which state leaders choose at each moment whether to attack, back down, or escalate. A leader who backs down suffers audience costs that increase as the public confrontation proceeds. Equilibrium analysis shows how audience costs enable leaders to learn an adversary's true preferences concerning settlement versus war and thus whether and when attack is rational. The model also generates strong comparative statics results, mainly on the question of which side is most likely to back down. Publicly observable measures of relative military capabilities and relative interests prove to have no direct effect once a crisis begins. Instead, relative audience costs matter: the side with a stronger domestic audience (e.g., a democracy) is always less likely to back down than the side less able to generate audience costs (a nondemocracy). More broadly, the analysis suggests that democracies should be able to signal their intentions to other states more credibly and clearly than authoritarian states can, perhaps ameliorating the security dilemma between democratic states.
Book
The governance of natural resources used by many individuals in common is an issue of increasing concern to policy analysts. Both state control and privatization of resources have been advocated, but neither the state nor the market have been uniformly successful in solving common pool resource problems. After critiquing the foundations of policy analysis as applied to natural resources, Elinor Ostrom here provides a unique body of empirical data to explore conditions under which common pool resource problems have been satisfactorily or unsatisfactorily solved. Dr Ostrom uses institutional analysis to explore different ways - both successful and unsuccessful - of governing the commons. In contrast to the proposition of the 'tragedy of the commons' argument, common pool problems sometimes are solved by voluntary organizations rather than by a coercive state. Among the cases considered are communal tenure in meadows and forests, irrigation communities and other water rights, and fisheries.
Article
This paper establishes a framework for examining self-regulating occupations and their relationships with government, the public and other occupational groups. It then examines one aspect of this regulative bargain, the tools used by self-regulating organizations to enforce their statutory monopolies, in order to maintain jurisdictional boundaries. Evidence of these strategies was found through a review of the literature on the pros and cons of self-regulation, and legislation, regulations, and by-laws sent to the author by self-regulating occupations in Canada. The paper concludes with a discussion of trends in occupational self-regulation that may affect professional monopolies. Sommaire: Dans cet article, on établit un cadre permettant d'examiner les professions auto-r églement ées, ainsi que leurs relations avec le gouvernement, le public et les autres groupements professionnels. Ensuite, on y examine un aspect particulier de cette entente r églementaire, » est-à-dire les outils qu'utilisent ces organismes pour faire respecter leur monopole statutaire afin de pr éserver leurs frontières juridictionnelles. Les éléments de ces stratégies ont été identifiés au moyen d'un examen bibliographique des avantages et désavantages de l'auto-réglementation, ainsi que par une analyse des lois, des règlements et des statuts sociaux envoyés à l'auteur par les professions auto-réglementées au Canada. En conclusion, l'auteur discute des tendances de I'auto-réglementation professionnelle qui risquent d'influer sur les monopoles professionnels.
Article
In the 1990s, the integrity and performance of nonprofit organizations in the United States have come increasingly under attack, and there are new calls to hold nonprofit organizations more accountable for their behavior and performance. This article reports on a study of the organizational structures of national nonprofit associations and asks how these umbrella organizations can help to self-regulate the sector through appropriate checks and balances between the national organization and local affiliates. The authors identify a number of differences in how associations with alternative structures hold local affiliates and national organizations responsible for their performances, and they conclude that structure is an avenue of self-regulation for nonprofit organizations deserving further attention.
Article
In this article we examine how information problems can cause agency slippages and lead to governance failures in nonprofit organizations. Drawing on the principal–agent literature, we provide a theoretical account of an institutional mechanism, namely, voluntary regulation programs, to mitigate such slippages. These programs seek to impose obligations on their participants regarding internal governance and use of resources. By joining these programs, nonprofit organizations seek to differentiate themselves from nonparticipants and signal to their principals that they are deploying resources as per the organizational mandate. If principals are assured that agency slippages are lower in program participants, they might be more likely to provide the participants with resources to deliver goods and services to their target populations. However, regulatory programs for nonprofit organizations are of variable quality and, in some cases, could be designed to obscure rather than reveal information. We outline an analytical framework to differentiate the credible clubs from the “charity washes.” A focus on the institutional architecture of these programs can help to predict their efficacy in reducing agency problems.
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This study uses board governance as an analytical lens for exploring the effects of government funding on the representational capacities of nonprofit organizations. A typology of governance patterns is first developed that captures the board’s strength relative to the chief executive and its representation of community interests. Using this typology and employing multinomial logit analyses of survey data from a sample of urban charitable organizations, the study tests how nonprofit governance is mediated by levels of government funding. Controlling for other relevant environmental and institutional factors, reliance on government funding decreases the likelihood that nonprofit organizations will develop strong, representative boards. In recent years, government has emerged in the United States as a major “philanthropist,” the major philanthropist in a number of the principal, traditional areas of philanthropy. —Filer Commission (Commission on Private Philanthropy and Public Needs 1975, 89)
Article
In this article we explore how much state is necessary to make governance work. We begin by clarifying concepts of governance and the “shadow of hierarchy” and we follow this clarification with a brief overview of empirical findings on governance research in developed countries. We then discuss the dilemmas for governance in areas of limited statehood, where political institutions are too weak to hierarchically adopt and enforce collectively binding rules. While prospects for effective policymaking appear to be rather bleak in these areas, we argue that governance research has consistently overlooked the existence of functional equivalents to the shadow of hierarchy. We assert that governance with(out) government can work even in the absence of a strong shadow of hierarchy, we identify functional equivalents to the shadow of hierarchy, and we discuss to what extent they can help overcome issues of legitimacy and effectiveness in areas of limited statehood.
Book
Can businesses voluntarily adopt progressive environmental policies? Most environmental regulations are based on the assumption that the pursuit of profit leads firms to pollute the environment, and therefore governments must impose mandatory regulations. However, new instruments such as voluntary programs are increasingly important. Drawing on the economic theory of club goods, this book offers a theoretical account of voluntary environmental programs by identifying the institutional features that influence conditions under which programs can be effective. By linking program efficacy to club design, it focuses attention on collective action challenges faced by green clubs. Several analytic techniques are used to investigate the adoption and efficacy of ISO 14001, the most widely recognized voluntary environmental program in the world. These analyses show that, while the value of ISO 14001's brand reputation varies across policy and economic contexts, on average ISO 14001 members pollute less and comply better with governmental regulations.
Article
This article examines the structure of nonprofit voluntary accountability and standard-setting programs, arguing that these programs can be understood as collective action institutions designed to address information asymmetries between nonprofits and their stakeholders. Club theory and the economics of certification suggest that such programs have the potential to provide a signal of quality by setting high standards and fees and rigorously verifying compliance. Such mechanisms can signal quality because higher participation costs may allow only high-quality organizations to join. The article examines the implications of signaling theory using an original dataset on the structure of 32 nonprofit accountability programs across the globe. While many programs set high standards for compliance, the key distinction between strong and weak programs is the use of disclosure or verification mechanisms to enforce compliance. Contrary to theoretical expectations, compliance standards and verification do not appear to be substitutes in creating stronger voluntary programs.
Article
Amid calls for NGOs to become more accountable, this work examines discrepancies between what NGOs say and do. Using a unique dataset of NGOs in Uganda it investigates the inaccuracies in reported financial transparency and community participation. We find that the threat of being caught reduces the likelihood of financial misrepresentation, while a desire to maintain a good reputation leads to misrepresentation of community consultation. Analysis provides indications that: NGOs with antagonistic relations with government may be more likely to hide information; and that unrealistic donor demands may be an obstacle to transparency. Findings caution against an overly naïve view of NGOs and a reliance on self-reported information.
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In recent years, government's primary response to the emergent problems of homelessness, hunger, child abuse, health care, and AIDS has been generated through nonprofit agencies funded by taxpayer money. As part of the widespread movement for privatization, these agencies represent revolutionary changes in the welfare state. Steven Smith and Michael Lipsky demonstrate that this massive shift in funds has benefits and drawbacks. Given the breadth of government funding of nonprofit agencies, this first study of the social, political, and organizational effects of this service strategy is an essential contribution to the current raging debates on the future of the welfare state. Reviews of this book: "An insightful analysis of the implications of an important, broad trend of the past thirty years in the social welfare policy of the United States and many other countries...[Smith and Lipsky] demonstrate that we do not have to read about other countries to find a comparative perspective that sheds light on the choices we face in our national health care debate." --Bradford H. Gray, Health Affairs "The most comprehensive account we have of the history, extent, nature, and meaning of delivering social services that are paid for by government and delivered through nonprofit organizations." --H. Brinton Milward, Public Administration Review "An interesting, absorbing, and important book." --William T. Gormley, Jr., American Political Science Review "An important contribution to welfare state scholarship." --Kirsten A. Gronbjerg, Contemporary Sociology
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This chapter discusses job market signaling. The term market signaling is not exactly a part of the well-defined, technical vocabulary of the economist. The chapter presents a model in which signaling is implicitly defined and explains its usefulness. In most job markets, the employer is not sure of the productive capabilities of an individual at the time he hires him. The fact that it takes time to learn an individual's productive capabilities means that hiring is an investment decision. On the basis of previous experience in the market, the employer has conditional probability assessments over productive capacity with various combinations of signals and indices. This chapter presents an introduction to Spence's more extensive analysis of market signaling.
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I. Introduction, 488. — II. The model with automobiles as an example, 489. — III. Examples and applications, 492. — IV. Counteracting institutions, 499. — V. Conclusion, 500.
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This synthetic literature review briefly summarizes general literature on principal–agent problems, then shows how this literature has been or can be adapted to look at nonprofit governance, accountability, and performance. It concludes with discussions of differences between agency problems in the for-profit and nonprofit sectors and difficulties in developing normative theories of accountability. Nonprofit organizations should be accountable to their legitimate stakeholders. Of course they should. This proposition seems so obvious that public regulators, watchdog agencies, major funders, and nonprofit managers use it every day, despite the vacuous nature of the statement. What does accountability mean? Who is a legitimate stakeholder? What if stakeholders disagree? The form of the statement suggests substance, lending legitimacy to thin arguments. For example, some implicitly replace “legitimate stakeholders” with a single category, privileging, say, donors. Then they assert something like “donors want fundraising costs to be as low as possible”, so that a high-cost charity lacks accountability. That argument seems sensible until one remembers that donors are not the only class of stakeholders, and that other mission-critical stakeholders (like indigent clients) might be harmed if fundraising costs (and hence revenues) are too low. Another example, familiar to many readers, is a nonprofit university. The list of arguably legitimate stakeholders here is staggeringly long: students, faculty, staff, administrators, donors, alumni, sports fans, private foundations, local tax authorities, for-profit research partners, employers, curators, politicians, advocates, and undoubtedly others.