Accountability in the context of nonprofit organizations entails holding actors answerable for actions. It may stipulate how entities and individuals report to identified authorities and are held accountable for their conduct. It incorporates several components (Ebrahim, 2016). Firstly, transparency encompasses gathering information and making it accessible and available for public analysis. Secondly, justification articulates the organization, providing clear reasoning for decisions and actions, incorporating those not implemented to necessitate reasonable questioning (Ebrahim, 2016). Thirdly, compliance via assessment and monitoring processes and results, combined with transparency in reporting them. Another component is sanctions or enforcement for deficits in transparency, justification or compliance. Accountability ensures that the entity meets the predetermined standards of behavior. The organization commits itself to balancing and responding to the needs of stakeholders in the decision-making procedures and operations and performing against this commitment. In the nonprofit industry, entities are accountable to their volunteers, grantees, staff members, community partners, donors and boards. Accountability aids in recognizing how things within the organization should be conducted.
Notably, several measures can be adopted to ensure nonprofit organizations practice accountability. The entity is anticipated to be accountable for numerous purposes, such as mission, performance, governance and finances (Ebrahim, 2016). They are being proactive rather than reactive. It ensures the organization constantly assesses its effectiveness and strengths, searching for techniques to improve and grow before difficulties occur. Reports and disclosure of statements. For example, filing the relevant form provided by the government of the nation in which it is working, which requests disclosures on funds (Ebrahim, 2016). Significantly, legal disclosures facilitate some degree of accountability to clients, donors and individuals who want to access these records. Moreover, it acts as a method for the NGOs to satisfy their fiduciary responsibility.
Adaptive learning will ensure the organization establishes periodic opportunities for analysis and critical reflection, which will aid in achieving the outlined missions. This practice will provide a forum for nonprofit leaders to address and concentrate on short-term needs, further generating more sustained outcomes (Ebrahim, 2016). It focuses mainly on the organization’s internal environment to reduce unnecessary internal bureaucracy.
Another way an entity can practice accountability is through evaluation and assessment. This exercise is geared towards determining to what extent program objectives and goals have been accomplished. The organization will be better positioned to recognize areas of strength and weaknesses in accountability, making it easy to implement vital measures in addressing the situation. It can focus on long, medium- or short-term results. Internal assessment helps staff gauge progress toward inner missions, goals, and externally funded programs.
Additionally, the organization can concentrate on self-regulation, which increases accountability. It incorporates the efforts of NGO networks to establish codes or standards of performance and behavior (Ebrahim, 2016). It redeems the organization’s image by developing norms around quality and, in some cases, foreseeing probable restrictive national administration regulation.
The entity should be transparent to the public, shareholders and stakeholders regarding its operations, resulting in satisfaction. It should be honest with who makes decisions about the nonprofit. This practice is crucial in increasing fundraising success and enhancing organizational effectiveness (Ortega-Rodríguez et al., 2020). Another measure is communicating effectively and efficiently to relevant parties. It will make them recognize the predetermined goals and objectives and avoid disputes. Instructions and concepts are articulated to others who learn more about the entity.
Nevertheless, the nonprofit organization should be willing to accept criticism and amend its strategies accordingly. For it to be an accountable entity, it must be open to receiving and getting feedback, even in cases where it is negative. It is critical for any improvement to make the institution learn and grow.
Accountability is fundamental in increasing the entity’s survival rate and ensuring the concerned parties are satisfied. It promotes operational excellence. Shareholders and stakeholders understand their obligations and how the institution is evaluated, leading to them putting more effort into essential activities. Secondly, this activity safeguards the institution’s resources. The organization becomes responsible and honest with its actions (Han & Hong, 2016). When held accountable, stakeholders match the entity’s standards and utilize available resources efficiently. They are less likely to mistreat the institution’s assets since there is a repercussion for their actions.
Accountability builds trust in sponsors, community and donors, creating a positive organizational image. It continuously earns the public’s trust through internal controls, ethics, governance, and financial transparency, which exhibits the institution’s accountability. Considerably, it makes it easy to get funding because the donors’ and sponsors’ confidence in the institution increases, resulting in financial success. To work effectively and efficiently with the entity, it must believe it is competent, honest, well-run, and efficient with its resources. Noteworthy, accountability leads to more accurate results. Therefore, Ms. Bene and her team will be better positioned to provide the resources necessary to the community more efficiently. With standards of accountability, the institution has boundaries of tolerable deviation. It eliminates effort and time spent in conducting unproductive activities. Through fault, the team will know the value of their work.
Nonprofit organizations are expected to be accountable to their missions, funders, themselves and clients (Ebrahim, 2016). However, it may vary depending on the organization type, such as service, membership and advocacy networks. Asymmetric relationships among the concerned parties can lead to skewing toward an accountability system that fulfills the interests of the influential actors. Accountability in these institutions can be rendered through monitoring, measuring and reporting performance, necessitating meeting their clients’ and funders’ needs, demands and expectations.
Remarkably, accountability involves the nonprofit organization being held accountable by standards and external actors and assuming internal responsibility for actions. Notably, the leaders of these institutions encounter numerous and, at times, contending accountability needs from different participants or actors for varying objectives and requiring various phases of institutional response articulating strategic and compliance. Accountability can be practiced in several ways, including adaptive learning, self-regulation, performance evaluation, effective communication and disclosure of statements and reports. These entities should be accountable in every aspect to gain trust and get committed funders, which increases their survival rate. Considerably, practices such as financial transparency, governance and ethics show accountability.
Moreover, they continuously earn the public’s trust. The majority of the parties involved should be satisfied with the decision implemented by the organization. Most of its stakeholders should perceive the nonprofit organization’s operation positively. Improving systems for downward accountability provides the individuals served by the organizations with the voice and choice of the services they get, and it is through strengthening these systems nonprofit leaders ensure key responsibilities are met.
Challenge of Accountability in Nonprofit Organizations
Significantly, nonprofit organizations need help with accountability. Firstly, they enhance downward accountability from funders to the organization and from the entity to the clients (Ebrahim, 2016). It may impact their relationships and how services are offered. It can be challenging for nonprofit leaders to strike a balance between the interests of its multiple stakeholders, which undermines accountability. When performance criteria differ among stakeholders, like in empowerment, policy advocacy or rights-based work, it may be challenging for the organization’s leaders to prioritize and coordinate among various constituents and interests.
Another factor affecting these entities’ accountability is control over expenditure and transparency (Baapogmah et al., 2015). Nonprofit leaders may be dishonest with their activities, significantly threatening the organization’s integrity. Consequently, most managers are highly aware of this practice and controls; however, some struggle because they need more resources. Moreover, efficiency remains to be tested, and it becomes challenging to equate institutions as more certifications that outline the standards of nonprofit organizations are created. In addition, Baapogmah et al. (2015) also explain that monitoring costs and transparency can prove challenging to nonprofits. Limited resources or fraudulent financial management practices by nonprofit leaders can threaten the organization’s integrity. These issues are not limited to topics about accountability, but they also limit fundraising efforts, whereby people cannot trust where their money will go.
Nonprofits address different stakeholders’ needs, creating a sophisticated accountability relationship that incorporates obligations with community partners, donors, clients, volunteers and staff members. As a result of the pressure from distinct stakeholders, these institutions prioritize accountability to governments, foundations and donors over that to the population and clients served by the entity. The organization may embrace its responsibilities and improve efficiency. By focusing on accountability, the nonprofit can meet obligations to the concerned parties affected by the programs and services and create a positive image. They are tasked with frequently embracing and servicing client perspectives, representing one of the primary purposes. Enhancing downward accountability benefits the entity by empowering the parties it serves, its effectiveness and its legitimacy. Accountability is a challenge to nonprofit entities because they face numerous competing demands relating to this activity from their stakeholders, which makes it deliberate in prioritizing these needs.
Moreover, according to Ebrahim (2016), balancing the interests of various stakeholders is yet another major challenge that nonprofit organizations encounter. The nonprofits have several entities that they report to, like funders, volunteers, staff, community partners, donors, and boards. Every stakeholder has various expectations about what the organization should offer to them. An example could be a funder wanting tangible results from their investment, whereas a volunteer prefers feeling appreciated and having meaningful time spent. This leads to hard-to-manage relationships in the organization with a variety of stakeholders.
Government bodies such as foundations and donors fund nonprofits about funding and support (Han & Hong, 2016). Despite this, they are also liable to the community they live in and their clients. Pressure from funders’ set performance criteria makes nonprofits prioritize downward accountability to their clients rather than an upward one to the same stakeholders. Failure to do this may lead to ignoring community needs or poor-quality programs. Another issue for nonprofits arises concerning balancing efficiency and effectiveness in accountability (Baapogmah et al., 2015). Nonprofit staff must report on their activities frequently, which often involves stringent regulatory frameworks that take up much of their time. Another challenge includes limited resources that prevent measuring outcomes accurately while comparing them to other qualified nonprofits, which confuses funders with what a thriving organization can achieve.
Conclusion
Accountability is vital for nonprofit organizations because it promotes transparency, justification, compliance and enforceability. These entities can effectively be accountable to their stakeholders by adopting proactive approaches, self-regulation, evaluation and auditing, effective communications, and disseminating statements and reports. Nevertheless, nonprofits, too, have their own set of accountability challenges, including, among other things, managing the demands of diversified constituents and funding over need. Nonprofit leaders must address these challenges to enhance downward accountability to those they serve within their organization. In general, it must be practicable if an organization makes its programs more efficient and effective, has confidence in donors, and builds trust for its programs in the society where it operates.
References
Baapogmah, F. A., Mayer, R. W., Chien, W.-W., & Afolabi, A. (2015). Control mechanisms and accountability challenges in nonprofit organizations. Global Journal of Business Research, 9(1), 27–38.
Ebrahim, A. (2016). The many faces of nonprofit accountability. 102–123.
Han, Y., & Hong, S. (2016). The impact of accountability on organizational performance in the U.S. federal government: The moderating role of autonomy. Review of Public Personnel Administration, 39(1), 3–23. https://doi.org/10.1177/0734371×16682816
Ortega-Rodríguez, C., Licerán-Gutiérrez, A., & Moreno-Albarracín, A. L. (2020). Transparency as a key element in accountability in nonprofit organizations: A systematic literature review. Sustainability, 12(14), 1–21. https://doi.org/10.3390/su12145834
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