accountability in practice

Accountability In Practice: Mechanisms for NGOs

ALNOOR EBRAHIM *

Virginia Polytechnic Institute and State University, Blacksburg, USA

Summary. — This paper examines how accountability is practiced by nongovernmentalorganizations (NGOs). Five broad mechanisms are reviewed: reports and disclosure statements,performance assessments and evaluations, participation, self-regulation, and social audits. Eachmechanism, distinguished as either a ‘‘tool’’ or a ‘‘process,’’ is analyzed along three dimensions ofaccountability: upward–downward, internal–external, and functional–strategic. It is observed thataccountability in practice has emphasized ‘‘upward’’ and ‘‘external’’ accountability to donors while‘‘downward’’ and ‘‘internal’’ mechanisms remain comparatively underdeveloped. Moreover, NGOsand funders have focused primarily on short-term ‘‘functional’’ accountability responses at theexpense of longer-term ‘‘strategic’’ processes necessary for lasting social and political change. Keypolicy implications for NGOs and donors are discussed.� 2003 Elsevier Science Ltd. All rights reserved.

Key words — accountability, nongovernmental organizations, reporting, evaluation, self-regula-

tion, social audit

1. INTRODUCTION

Concerns about accountability in nongov-ernmental organizations (NGOs) 1 have in-creased over the past two decades, due in partto a series of highly publicized scandals thathave eroded public confidence in nonprofit or-ganizations, coupled with a rapid growth inNGOs around the world (Gibelman & Gelman,2001; Young, Bania, & Bailey, 1996). Thegrowth of NGOs, especially in the South, hasbeen fueled by a belief among donors thatNGOs are more cost-effective than govern-ments in providing basic social services, arebetter able to reach the poor, and are keyplayers in democratization processes––despite alack of sufficient empirical evidence to supportthese counts (Edwards & Hulme, 1996b, p. 963;Mackintosh, 1992, p. 80). In some cases, NGOsare themselves responsible for exaggeratingtheir claims to legitimacy, which may be basedmore on a belief in value-driven organizationsthan on actual monitoring and assessment oftheir accomplishments (Riddel, 1999, pp. 223–234). These views, however, are being increas-ingly challenged by long-time practitioners andscholars in the field who advocate movingbeyond seeing NGOs as ‘‘magic bullets’’ tothinking more concretely about issues of ac-countability (Edwards & Hulme, 1996a; Na-jam, 1996a, p. 340).

The purpose of this paper is to examinevarious ways in which accountability is prac-ticed by NGOs. First, I draw upon numerousdefinitions of accountability in order to developan integrated perspective. I then explore fivekey accountability mechanisms used by NGOsin practice: reports and disclosure statements,performance assessments and evaluations,participation, self-regulation, and social audits.Finally, I compare these mechanisms across aseries of analytic criteria in order to drawgeneral policy conclusions.

2. AN INTEGRATED PERSPECTIVE ONACCOUNTABILITY

Numerous definitions of accountability havebeen offered by scholars and practitioners ofdevelopment. For example, Edwards andHulme (1996b, p. 967) define it as ‘‘the meansby which individuals and organizations report

World Development Vol. 31, No. 5, pp. 813–829, 2003� 2003 Elsevier Science Ltd. All rights reserved

Printed in Great Britain0305-750X/03/$ - see front matter

doi:10.1016/S0305-750X(03)00014-7www.elsevier.com/locate/worlddev

*For their insightful comments and suggestions, the

author would like to thank the reviewers and editor of

World Development, Edward Weisband at Virginia

Tech, and participants in two seminars given at the

Program on Nonprofit Organizations (Yale University)

and at the Center for Development Research (University

of Bonn). Final revision accepted: 16 December 2002.

813

to a recognized authority (or authorities) andare held responsible for their actions.’’ In theirstudy of accountability in the World Bank andNGOs, Fox and Brown (1998, p. 12) similarlydescribe accountability as ‘‘the process ofholding actors responsible for actions.’’ In aspecial issue of the IDS Bulletin on ‘‘Account-ability through Participation,’’ Cornwall, Lu-cas, and Pasteur (2000, p. 3) broaden thisperspective by suggesting that accountability isboth about being ‘‘held responsible’’ by othersand about ‘‘taking responsibility’’ for oneself.As such, accountability has both an externaldimension in terms of ‘‘an obligation to meetprescribed standards of behavior’’ (Chisolm,1995, p. 141) and an internal one motivated by‘‘felt responsibility’’ as expressed through indi-vidual action and organizational mission (Fry,1995).This dual perspective is not unlike that pro-

posed by democratic accountability theorists,even though their focus is on public institutionsand representation by elected officials ratherthan on nonprofit organizations (e.g., Behn,2001; Dunn, 1999; Przeworski, Stokes, & Ma-nin, 1999; Weber, 1999). For example, Behnsuggests a ‘‘360-degree model’’ of accountabil-ity that would require public agencies to shiftfrom current adversarial modes of account-ability enforcement to an emphasis on cooper-ative responsibility, while Dunn proposesincreased transparency of information frompublic officials purporting to act in a publicinterest. More pointedly, James Madison him-self warned that in governance ‘‘the great dif-ficulty lies in this: you must first enable thegovernment to control the governed; and in thenext place oblige it to control itself’’ (51stFederalist Paper, as quoted in Przeworski et al.,1999, p. 1).The organizational behavior literature has

also influenced discussions on accountability,particularly through scholarship on resourcedependence and stakeholder theory. Whilemuch of the resource dependence literature hasfocused on private sector firms (e.g., Pfeffer &Salancik, 1974, 1978), it is equally applicable torelationships between NGOs and their funders.Indeed, NGO concerns about accountability todonors have often centered on asymmetries inresources that have resulted in excessive con-ditionalities or onerous reporting requirementsbeing attached to funding. Accountabilitymechanisms, such as annual project reports andfinancial records (discussed in more detail be-low), are used not only by funders to keep track

of NGO spending, but also by NGOs to le-verage funds by publicizing their projects andprograms. There is thus a resource interdepen-dence (albeit often asymmetric) in which NGOsrely on donors for money, and donors rely onNGOs for their reputations in development(Ebrahim, 2002; Hudock, 1999; Perera, 1997).Studies of resource dependence potentially offermuch insight on accountability, especially byrevealing the kinds of mechanisms used by or-ganizations to leverage responsiveness.What is missing from much of the debate

on accountability is an integrated look athow organizations deal with multiple andsometimes competing accountability demands.Stakeholder perspectives from the organiza-tional behavior literature have only just begunto fill this gap. Much of the early work in thisfield is credited to Edward Freeman�s (1984)writing on a ‘‘stakeholder approach’’ to strate-gic management in which stakeholders are de-fined to include not only stockholders but alsoother individuals and groups who can affect, orare affected by, a particular business. This workhas fed into a burgeoning literature on corpo-rate social responsibility, performance, andethics (e.g., Clarkson, 1995; Hummels, 1998;Jawahar & McLaughlin, 2001; Soule, 2002;Wheeler & Sillanp€aa€aa, 1997; Wicks, Gilbert, &Freeman, 1994) and has also led to the emer-gence of various accountability mechanismssuch as social auditing (discussed in more detailbelow), all of which have become only morerelevant in the wake of recent accountingscandals featuring such corporate giants asEnron, Arthur Anderson, and WorldComm.Yet while this literature has promoted a

wider view of corporate constituencies, it re-mains somewhat limited for reflecting on or-ganizations such as NGOs where stockholdersare not the primary stakeholders and whosemissions often do not include a calculus ofprofit-making. Arguably, NGOs face the com-peting demands of multiple stakeholders moreacutely and regularly than do private firms.Najam (1996a) has observed that NGOs areaccountable to multiple actors: to patrons,to clients, and to themselves. NGO-patron ac-countability or ‘‘upward’’ accountability (Ed-wards & Hulme, 1996b, p. 967) usually refersto relationships with donors, foundations, andgovernments and is often focused on the‘‘spending of designated moneys for designatedpurposes’’ (Najam, 1996a, p. 342). NGO ac-countability to clients refers primarily to rela-tionships with ‘‘groups to whom NGOs provide

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services’’ although it may also include com-munities or regions indirectly impacted byNGO programs (Najam, 1996a, p. 345). Thishas also been termed ‘‘downward’’ account-ability (Edwards & Hulme, 1996b, p. 967). Thethird category of accountability articulated byNajam concerns NGOs themselves. This inter-nal accountability includes an NGO�s respon-sibility to its mission and staff, which includesdecision-makers as well as field-level imple-menters. These multiple and sometimes com-peting accountabilities can become even morecomplicated in cases where NGOs enter intocontractual relationships foreign donors, localgovernments, and multinational corporations(Meyer, 1999, pp. 110–115).Another useful distinction, developed by

Avina (1993, as cited in Najam, 1996a, p. 351),concerns functional accountability (accountingfor resources, resource use, and immediate im-pacts) and strategic accountability (accountingfor the impacts that an NGO�s activities haveon the actions of other organizations and thewider environment). This distinction is similarto that drawn between practical and strategicneeds by gender planning theorists (Moser,1989), and between tactical and strategic or-ganizational responses drawn by public ad-ministrators (Kearns, 1996, p. 43), in order toemphasize the difference between efforts thatfocus on short-term organizational change andlonger-term structural change. Najam suggeststhat while functional accountability of NGOsto patrons, operationalized through reportsand accounts, is typically high in practice,functional accountability to clients and NGOsthemselves is low. He also contends that stra-tegic accountability is weak on all fronts, im-plying that current accountability relationsamong NGOs, patrons, and clients are focusedon short-term activities rather than on long-term change.It is apparent from this brief introduction

that accountability is a complex and dynamicconcept. It may be defined not only as a meansthrough which individuals and organizationsare held responsible for their actions (e.g.,through legal obligations and explicit reportingand disclosure requirements), but also as ameans by which organizations and individualstake internal responsibility for shaping theirorganizational mission and values, for openingthemselves to public or external scrutiny, andfor assessing performance in relation to goals.Accountability operates along multiple dimen-sions––involving numerous actors (patrons,

clients, selves), using various mechanisms andstandards of performance (external and inter-nal, explicit and implicit, legal and voluntary),and requiring varying levels of organizationalresponse (functional and strategic). 2

3. MECHANISMS OF ACCOUNTABILITY

I now turn to a discussion of five broad (butfar from comprehensive) categories of ac-countability mechanisms used by NGOs inpractice: reports and disclosure statements,performance assessments and evaluations,participation, self-regulation, social audits. Thecomparative strengths and weaknesses of eachof these mechanisms, as well as their policyimplications, are further analyzed in the con-cluding section of this paper. The followingdiscussion only peripherally examines organi-zational management elements such as missionor vision statements and governing boardswhich, while crucial for internal accountabilitypurposes, have been extensively discussed else-where (e.g., Carver, 1990; Gibelman & Gelman,2001; Kearns, 1996). It also does not discussissues of democratic accountability, such asthose concerning NGO claims to legitimacy inrepresenting views of the poor or marginalized,given the fact that most NGOs are neithermembership organizations nor elected bodies.This matter would require a separate discussionon representation and legitimacy.Before discussing the mechanisms, it is help-

ful to differentiate between those that are‘‘tools’’ and those that are ‘‘processes.’’ 3 Inbasic terms, accountability tools refer to dis-crete devices or techniques used to achieve ac-countability. They are often applied over alimited period of time, can be tangibly docu-mented, and can be repeated. For example, fi-nancial reports and disclosures are tools thatare applied and repeated quarterly or annually,and are documented as financial statements,ledgers, or reports. Performance evaluationsare also often carried out at specific points intime, usually at the end of a specific project,and result in an evaluation report. On the otherhand, process mechanisms such as participationand self-regulation are generally more broadand multifaceted than tools, while also beingless tangible and time-bound, although eachmay utilize a set of tools (such as participatoryrural appraisal) for achieving accountability.Process mechanisms thus emphasize a course ofaction rather than a distinct end-result, in

ACCOUNTABILITY IN PRACTICE 815

which the means are important in and ofthemselves. There are also some mechanisms,such as social auditing, that straddle the tool-process boundary. These distinctions are dis-cussed in greater detail below.

(a) Disclosure statements and reports

Disclosure statements and reports are amongthe most widely used tools of accountabilityand are frequently required by federal or statelaws in many countries. In the United States,for example, nonprofit organizations that seekfederal tax exempt status are subject to the re-quirements of section 501(c)(3) of the InternalRevenue Code. With some exceptions, non-profits must provide quite detailed informationon finances, organizational structure, and pro-grams through an annual information returnknown as Form 990. This information is pro-vided to the Internal Revenue Service in orderto ensure that the organization is in confor-mance with tax exemption law, and especiallyto demonstrate that its activities are primarilyfor educational, charitable, religious, or scien-tific purposes and for public, rather than pri-vate, benefit. Furthermore, state law provisionsalso often include registration and reportingstatutes that involve annual financial reporting.Such legal disclosures enable some degree of

accountability to donors, clients and memberswho wish to access these reports. On the otherhand, donors and clients of a nonprofit orga-nization in the United States generally havevery limited legal standing to challenge an or-ganization for falling short of legal require-ments, with primary responsibility falling onthe attorney general as the ‘‘representative ofsociety at large’’ or on the Internal RevenueService for matters of tax exemption (Balda,1994, p. 72; Chisolm, 1995, p. 147). At the sametime, legal requirements can also be abused bygovernments to keep tabs on organizations,particularly those suspected of subversive ac-tivity. India�s Foreign Contribution RegulationAct (FCRA) of 1976, for example, was enactedshortly after a state of Emergency was declaredby the government of Indira Gandhi. The Actenabled the government to monitor the flow offoreign funds to NGOs, and to scrutinize thosecritical of the state (Fernandes 1986, as cited inSen, 1999, p. 338). To this date, all IndianNGOs receiving foreign funds must open spe-cial FCRA accounts that enable federal over-sight of the use of those funds.

Apart from legally mandated reports, donorsrequire regular reports from organizations thatthey fund. The nature of these reports variesconsiderably among funders and projects, andit is subject to some degree of negotiation. Forexample, the European Commission, whichprovides bilateral assistance to Southern gov-ernments is increasingly funding NGOs, oftenrequiring highly detailed quarterly and annualreports on ‘‘physical’’ achievements resultingfrom funded projects (e.g., numbers of irriga-tion systems built, hectares of land afforested,and numbers of village organizations formed)as well as accounts of expenditures based onpre-specified line items. The Norwegian Agencyfor Development Cooperation (NORAD), onthe other hand, which also provides substantialfunds to governments and NGOs, requires onlyvery brief annual reports from NGOs and oftendoes not impose any specific format (Ebrahim,1999). In many cases, NGOs with multipleforeign donors expend considerable care incomplying with the auditing system of eachfunder. Some organizations, such as Fundaci�oonNatura in Ecuador, even make available ayearly financial audit by Pricewaterhouse-Coopers (Meyer, 1999, p. 92).Such reports and legal disclosures are sig-

nificant tools of accountability in that theymake available (either to the public or tooversight bodies) basic data on NGO opera-tions. Their distinct and tangible nature makesthem easily accessible. Yet, the bulk of this re-porting emphasizes upward reporting of finan-cial data, with only limited indication of thequality of NGO work and almost no attentionto downward accountability to stakeholders.These are external approaches to accountabil-ity, enforced through punitive threats such asthe loss of nonprofit status or revocation offunds. While important, these external ap-proaches have only limited potential for en-couraging organizations and individuals to takeinternal responsibility for shaping their orga-nizational mission, values, and performance orfor promoting ethical behavior.

(b) Performance assessment and evaluation

Another widely used set of tools for facili-tating accountability includes various kinds ofevaluation, including performance and impactassessments. It is useful to distinguish betweenexternal and internal evaluations. Donorscommonly conduct external evaluations ofNGO work near the end of a grant or program


phase, and are increasingly employing mid-term assessments as well. Such evaluationstypically aim to assess whether and to whatextent program goals and objectives have beenachieved and are pivotal in determining futurefunding to NGOs. These appraisals may focuson short-term results of NGO intervention (i.e.,‘‘outputs’’ or ‘‘activities’’ such as training pro-grams offered and irrigation systems built) ormedium- and long-term results (i.e., ‘‘impacts’’or ‘‘outcomes’’ such as improvements in clientincome, health, natural resource base, etc.)(Levy, Meltsner, & Wildavsky, 1974; Roche,1999, p. 22). Internal evaluations are alsocommon, in which NGO staff gauge their ownprogress, either toward the objectives of exter-nally-funded programs or toward internal goalsand missions. Hybrid internal and externalevaluations are not uncommon, with NGO staffworking jointly with external evaluators.Both external and internal evaluations run

into a series of problems concerning mea-surement and relevance. First, there are con-flicts among NGOs and funders over whetherthey should be assessing processes suchas ‘‘participation’’ and ‘‘empowerment’’ orwhether they should measure more tangibleproducts such as the numbers of schools built,trees planted, and land area irrigated. For themost part, donor appraisals tend to focus onproducts––they are short-term and emphasizeeasily measurable and quantifiable results overmore ambiguous and less tangible change insocial and political processes. An appraisaltool increasingly used by bilateral donoragencies is logical framework analysis (LFA).The logical framework is a matrix in which aproject�s objectives and expected results areclearly identified, along with a list of indica-tors that are to be used in measuring andverifying progress toward achieving thoseobjectives and results. While LFA can beproductively used as a tool for initially fram-ing a project, and it has been helpful in en-abling many NGOs to articulate better theirobjectives and expected results, the frame-work�s tendency toward simplification andquantification make it inadequate for moni-toring complex development interventions.Edwards and Hulme (1996a, p. 968) suggestthat the wide use of logical frameworks andtheir derivatives may ‘‘distort accountabilityby overemphasizing short-term quantitativetargets and favoring hierarchical managementstructures––a tendency to �accountancy� ratherthan �accountability.� ’’

A second set of problems concerns NGOperspectives on the relevance of evaluation.Riddel (1999) lists several reasons why NGOsare skeptical about the need for and purpose ofevaluation. On one side, NGO culture tends toemphasize action over analysis. NGO staff are,by and large, ‘‘doers’’ that gain legitimacy byhelping the poor than by conducting time-consuming and costly evaluations. In addition,the tendency of donor evaluations to focus ondiscrete projects limits their relevance in ex-amining longer-term processes. A reasonabledonor response to such skepticism is, of course,that evaluations can help NGO staff becomebetter ‘‘doers’’ by uncovering weaknesses inproject planning or by developing more stra-tegic interventions, and that evaluations can bedesigned to assess longer-term processes andoutcomes rather than simply short-term out-puts.It is more difficult, however, to respond to

NGO concerns that performance assessmentsgive funders the arsenal to base funding on‘‘successful’’ projects, thereby rewarding NGOsthat stick to discrete and proven product-basedapproaches to development, while punishingthose which attempt to develop and test moreinnovative and risky process-based approaches(Riddel, 1999, pp. 225–226). An additionalcrucial concern raised by small NGOs is thattheir limited staff and resources are stretchedtoo thin by evaluation and reporting requestsof funders. Donors sometimes fail to recognizethat complex evaluation requirements canoverwhelm small organizations (and even largeones at times), and that NGO size and capacityshould be key factors in determining the scaleof an appraisal. Onerous data requirements canlead NGOs to develop monitoring and evalu-ation systems that, while satisfying donor needsfor information, are viewed as irrelevantfor internal NGO decision-making (Ebrahim,2002).A third, and more fundamental, skepticism

centers on the purpose of evaluation. There is atendency to equate evaluation with assessmentof performance. While it makes sense to con-duct evaluations in order to assess progresstoward objectives, should this be the sole, oreven the primary, purpose of evaluation? Per-formance assessments tend to focus attentionon projects or programs, while overlooking theNGO or organization itself (Fowler, 1996).Evaluations have the potential for facilitatingbroader organizational change, particularlythrough capacity building and organizational


learning. In his study of a number of donor andNGO experiences with evaluation, Riddel(1999, p. 237) concludes that ‘‘donor fundswould probably be better spent in helpingNGOs develop and experiment with differentmethods of assessment than in undertaking alarge number of impact studies based onmethods used to date.’’ This conclusion isparticularly important given that in manycountries the capacity for fairly basic moni-toring and assessment is severely limited(Cornwall et al., 2000, p. 2).This observation also points to the potential

use of evaluation as a tool for learning, ratherthan simply for impact and performance as-sessment. Organizations can be seen as learning‘‘by encoding inferences from history intoroutines that guide behavior’’ (Levitt & March,1988, p. 320). Learning, as such, involves gen-erating knowledge by processing informationor events and then using that knowledge tocause behavioral change. Evaluations that re-ward success while punishing failure (e.g.,through revocation of funds or additionalconditions on funding) seem unlikely to en-gender organizational learning since they en-courage NGOs to exaggerate successes, whilediscouraging them from revealing and closelyscrutinizing their mistakes (Smillie, 1996, p.189). External evaluators such as donors canthus improve NGO accountability (upward anddownward) not merely by assessing perfor-mance, but by building NGO capacity to con-duct self-evaluations, and by encouraging theanalysis of failure as a means of learning. Inorder for this to occur, however, donors willneed to make funding less contingent on sim-plistic assessments of success, and more closelylinked to criteria of capacity-building andlearning. Smillie (1996, p. 190) has suggestedthat many donor countries, including theNetherlands, the United States, and Canada,are far from adopting such an approach andgenerally use evaluation ‘‘more as a control andjustification mechanism. . . than as a tool forlearning or for disseminating findings.’’

(c) Participation

As an accountability mechanism, participa-tion is quite distinct from evaluations and re-ports because it is a process rather than a tool,and it is thus part of ongoing routines in anorganization. In examining participation, it ishelpful to distinguish between different levels orkinds of participation. Drawing from Adnan

(1992 as cited in Gardner & Lewis, 1996, p.111) and Arnstein (1969), I make four generaldistinctions between types of participation. Atone level, participation refers to informationabout a planned project being made availableto the public, and can include public meetingsor hearings, surveys, or a formal dialogue onproject options. In this form, participation in-volves consultation with community leadersand members but decision-making power re-mains with the project planners. A second levelof participation includes public involvement inactual project-related activities, and it may bein the form of community contribution towardlabor and funds for project implementation,and possibly in the maintenance of services orfacilities. At a third level, citizens are able tonegotiate and bargain over decisions withNGOs or state agencies, or even hold vetopower over decisions. At this level, citizens areable to exercise greater control over local re-sources and development activities. Finally, ata fourth tier of participation, are people�s owninitiatives which occur independently of NGO-and state-sponsored projects. Examples of thiskind of participation include social movementssuch as Chipko in the 1970s in which peasants,particularly women, in the Himalayan moun-tains mobilized against commercial logging(Gardner & Lewis, 1996; Guha, 1989), or ac-tions of local resistance and civil disobediencein India�s Narmada River Valley against largedam projects (Khagram, 1998).The first two forms of participation are

commonly espoused by state agencies, donors,and NGOs, and are based on an assumptionthat poverty can be eliminated by increasinglocal access to resources and services. At bothof these levels, very little decision-making au-thority is vested in communities or clients, withactual project objectives being determined byNGOs and funders long before any ‘‘partici-pation’’ occurs. This sort of participation iswhat Najam (1996a, p. 346) has referred to as‘‘a sham ritual’’ functioning as little more than‘‘a �feel-good� exercise for both the local com-munity and the NGO.’’ In linking this problemto accountability, he argues that ‘‘the sham ofparticipation translates into the sham of ac-countability’’ because ‘‘[u]nlike donors, [com-munities] cannot withdraw their funding; unlikegovernments, they cannot impose conditional-ities’’ (Najam, 1996a, pp. 346–347). The act ofparticipation or the exercise of ‘‘voice’’ (to useHirschman�s term) is largely symbolic in suchsettings; it is not ‘‘political action par excel-


lence’’ (Hirschman, 1970, p. 16). Rarely, inmainstream development practice, has the no-tion of participation been extended to forms ofpoliticized activity that directly challenge socialand political inequities (levels three and fourabove), thus creating benefits that might exceedthe costs of exercising voice. These more radicalversions of participation stress that poverty isbased in power structures embedded in socialand political relations. As such, without somemechanism for addressing unequal power re-lations, participation appears unlikely to leadto downwards accountability.While participatory methods––such as par-

ticipatory rural appraisal (PRA) and partici-patory learning and action (PLA)––have beenpart of the ‘‘toolkit’’ of most developmentagencies for several years now, the mere use ofthese tools is inadequate for ensuring down-ward accountability. 4 For example, Edun�s(2000) examination of six health care projects inNigeria (funded by the World Bank and thebilateral development agencies of the UnitedKingdom, United States, and Canada) con-cluded that although each of the projectsclaimed ‘‘community involvement,’’ their vari-ous failures showed that they did not ade-quately consider community needs, strengths,and conditions prior to design and imple-mentation. In addition, Roche�s (1999, p. 148)study of several participatory impact assess-ments observed that ‘‘participatory exercises ingroups can neglect some people�s views (forinstance, women�s or children�s) and, moreover,validate and legitimate the views of dominantgroups, thus increasing their power vis-�aa-visothers.’’ He noted that for participatory toolsand methods to reflect differences in power andperspective, they must be part of a more de-liberate intervention and research strategy.Two useful examples of how more meaning-

ful participation can be built into large andcomplex development projects are provided byHoward-Grabman (2000), who reviewed a pairof USAID-funded projects carried out by Savethe Children/US and Johns Hopkins Univer-sity. Both projects aimed to increase commu-nity participation in health care in LatinAmerica by building partnerships between ser-vice providers and clients. The projects in-volved communities not only in assessingservices but, equally crucially, in developingservice goals and objectives in collaborationwith service providers. One project, in Bolivia,established a health information system whichutilizes simple forms, community maps, and

easy-to-understand graphics to assist commu-nity members and service providers in jointlymaking decisions, setting priorities, and moni-toring progress. The second project, in Peru,learned from previous findings that ‘‘a majorbarrier to clients� utilization of reproductivehealth care services is how health care providerstreat them.’’ As a result, the project emphasizeddialogue between clients and service providersin order to identify priorities and strategies toincrease community use and ownership ofpublic health services. While actual citizencontrol over both of these projects was limited,these examples demonstrate that it is possibleto develop collaborative arrangements betweenNGOs, government agencies, and communitiesin a manner that gives citizens considerableleverage over development interventions. Partof this leverage is obtained through tools suchas participatory appraisal and asset mappingwhich can, at least in part, reverse or moderateconventional relations of authority and power.Actual sharing of power, however, would re-quire both of these projects to go even fur-ther––not only by requiring dialogue and openaccess to all project-related information, butalso by enabling communities to share inprogrammatic and financial decision-makingthrough voting membership on key decisionbodies, and even by recruiting communitymembers into management staff. 5

Downward accountability can also be en-hanced through participatory evaluation. Aspreviously noted, communities are unable tohold NGOs or donors accountable by threat-ening to withdraw funding or by imposingconditionalities. As such, systematic involve-ment of communities in evaluating NGOs andfunders is a key mechanism that can serve toincrease their leverage. Similarly, downwardaccountability of funders to NGOs requiresthat evaluations systematically integrate NGOviews on the performance of funders with thetraditional ‘‘top–down and bureaucratic’’funder evaluations of NGOs (Roche, 1999,p. 29). In this way, tools of evaluation canbe combined with processes of participationto develop complex downward accountabilitymechanisms.

(d) Self-regulation

The term ‘‘self-regulation,’’ as used here, re-fers specifically to efforts by NGO or nonprofitnetworks to develop standards or codes of be-havior and performance. 6 Partly in an effort to


redeem the image of the sector (as a result ofpublic scandals or exaggerated claims of per-formance), and partly to forestall potentiallyrestrictive government regulation, nonprofitshave begun to turn to various forms of self-regulation (Schweitz, 2001). While some degreeof external intervention may be appropriate indealing with this problem of public trust (e.g.,government oversight, especially through re-porting and disclosure requirements), self-reg-ulation presents a complementary path thatallows nonprofits to address directly their ownsector-wide problems while retaining some in-tegrity. The focus of this section is on formal,rather than informal, codes of conduct devel-oped by NGOs. While such a focus is some-what narrow, since there are likely manyexamples of less formalized self-regulatorynetworks, it is useful for illustrative purposessince the codes are an articulation of appro-priate, or accountable, behavior for an entiresector. Moreover, as the Philippine examplebelow demonstrates, formalized codes some-times provide a visibility that is helpful in en-hancing the reputation of the NGO sector.The process of developing a code of conduct

is, in effect, ‘‘an opportunity for self-definitionby national NGO networks, as well as forpublic presentation of their collective mission,principles, values, and methods’’ (Schweitz,2001, p. 2). The legitimacy of a code, however,is influenced by the process through which it isestablished, thus making the code creationprocess crucial to its eventual adoption. 7 Intheir study of national and international codes(Schweitz and Kunugi 1999, as cited inSchweitz, 2001) provide examples of self-regu-lation from Australia, Bulgaria, Canada, Co-lombia, India, Japan, Lesotho, Nepal, thePhilippines, South Africa, and the UnitedStates, as well as from transnational organiza-tions such as the Commonwealth Foundation,the International Council for Voluntary Agen-cies, and the International Red Cross and RedCrescent Movement. The code process in all ofthese cases involved some degree of participa-tory negotiation, frequently lasting over twoyears, with most codes also including someform of compliance assessment or certification.Most of these codes have been adopted withinthe past 10 years, reflecting not only an effortby NGOs to improve their image, but also anincreasing sectoral recognition of the necessityfor establishing ‘‘common positions, strategicalliances, coordinated action, and proof of ac-countability’’ in order to influence effectively

national and international policy (Schweitz,2001, p. 4).While the content of these codes varies, they

essentially agree on key principles and ethics ofdevelopment (e.g., participatory and people-centered development), and they also provideguidelines on NGO management (Schweitz,2001, pp. 8–9):

The most basic requirements of accountability statedin these codes are that the organization have (1) aclearly specified purpose or mission, and (2) a trans-parent internal management system, free of conflictsof interest, discrimination, favoritism, secrecy, corrup-tion, and all other unethical practices. Some of thecodes explicitly require an elected, independent boardof directors and specify its responsibilities. Anothercrucial aspect of accountability is proper, complete,and open financial accounting that. . . is stressed inall codes but with varying degrees of specificity.

In the United States, for example, a setof standards was developed in 1993 by Inter-Action, a membership association of US pri-vate voluntary organizations (PVOs). Thesestandards lay out, in some detail, requirementsconcerning governance, organizational integ-rity, finances, public communication and dis-closure, management and hiring practices(including promoting gender equity), programs,and public policy involvement. For instance,the governance standards require that the or-ganization have an independent board of di-rectors and even specify some of the tasks ofthe board. The integrity standards emphasizetruthfulness in conduct and require that eachorganization develop a written standard ofconduct for its directors, employees, andvolunteers. In addition, guidelines and re-quirements for promoting gender equity, di-versity, and people with disabilities are foundthroughout the code. Implementation of thesestandards is based on self-certification, subjectto review by a Standards Committee whichis also empowered to investigate complaintsabout noncompliance (InterAction, 2001).These standards have had impacts beyond theUnited States, with other consortiums such asthe Canadian Council for International Co-operation (CCIC) using them as a basis fordeveloping their own codes. In fact, the CCICCode of Ethics contains almost identical cate-gories and very similar content to InterAction�scode (CCIC, 1995).While InterAction�s standards of ethical

conduct emerged from an internal decision byits executive committee, the impetus for devel-


oping codes can also emerge from threats bygovernment regulators. In the Philippines, theproliferation of NGOs––estimated at over60,000––fueled government concern about theformation of nominal NGOs serving as taxshields. This led the Department of Finance tochallenge NGOs to create a self-regulatorybody ‘‘to certify nonstock, nonprofit organiza-tions for tax-efficient donee institution status’’(Soledad, 2001, p. 26). In response, the Philip-pine Council for NGO Certification (PCNC)was established in 1999 by six of the country�slargest NGO networks in order to evaluate andcertify NGOs on six criteria: vision, mission,and goals; governance; administration; pro-gram operations; networking; and, especially,financial management. Unlike InterActionwhich uses self-certification subject to investi-gation, the PCNC has trained about 750 NGOofficers as volunteer evaluators who, in teamsof three, evaluate applicant organizations. Be-tween its launching in February of 1999 andDecember of 2000, the PCNC evaluated 85organizations, certifying 75, deferring certifi-cation on three, and denying certification toseven organizations. In addition, although thePCNC was initially formed to protect the spe-cial tax status enjoyed by NGOs and to legiti-mate and encourage donations to NGOs, it hasalso begun to exert policy influence at a na-tional level (Soledad, 2001). Numerous similarumbrella organizations have emerged in otherparts of Asia, including the Association ofDevelopment Agencies in Bangladesh whichhas its own code of ethics, and the VoluntaryAction Network India which has adopted the‘‘Guidelines for Good Policy and Practice’’developed by the UK�s Commonwealth Foun-dation (Commonwealth Foundation & Volun-tary Action Network India, 1995; VoluntaryAction Network India & International Centerfor Not-for-Profit Law, 1997). The actual im-pacts of these various codes remain to be em-pirically examined.Each of the above cases demonstrates codes

developed by national-level network associa-tions. The formation of NGO codes applicableat an international level is considerably morecomplex, given the nascent nature of a globalgovernance structure and norms within whichto situate and enforce standards. Humanitarianresponses to natural disasters and conflict, forexample, frequently involve numerous bilateraldonor agencies, multilateral organizations,government agencies, and international andlocal NGOs, all operating in highly turbulent

political, physical, and social contexts. Theperformance of organizations in this environ-ment is often dependent on the performance ofothers in the system. For example, the UN�sWorld Food Programme, which provides bulkfood aid in emergency situations, is dependentnot only on the voluntary support of bilateraldonors to fund food procurement and shipping,but also on multiple NGOs to distribute food(Borton, 2001). Codes that can enhance coor-dination and accountability in such settingshave the potential to improve the performanceof emergency operations.A number of such codes have begun to

emerge over the past decade. For example,eight of the world�s largest disaster responseagencies developed, in 1994, the Code of Con-duct for The International Red Cross and RedCrescent Movement and NGOs in DisasterRelief. 8 It lays down 10 principles of behaviorfor NGOs, and also provides recommendationson behavior to governments of disaster affectedcountries, donor governments, and intergov-ernmental organizations (International Feder-ation of Red Cross & Red Crescent Societies,1994). Subsequent efforts by European and USNGOs led to the publication, in 2000, of aHumanitarian Charter and Minimum Stan-dards in Disaster Response (the ‘‘SphereStandards’’). It provides universal minimumstandards in the core areas of water supply andsanitation, nutrition, food aid, shelter and siteplanning, and health services. In addition, agroup of organizations in the United Kingdom,has been exploring possibilities for a huma-nitarian ombudsman, in response to an inter-national evaluation of emergency assistanceto Rwanda (Borton, 2001). This effort, nowknown as the Humanitarian AccountabilityProject, aims to ‘‘act as an impartial and in-dependent voice for those affected by disasterand conflict’’ (Ombudsman Project WorkingGroup, 1998, p. 1). In addition to handling thecomplaints and concerns of local populations, ahumanitarian ombudsman could also become acentral player in scrutinizing NGO behavior inrelation to accepted codes of practice.In sum, self-regulation presents numerous

opportunities for NGOs not only to better theirpublic image, but also to enhance performance.Self-regulation through codes of conduct, om-budsmen, and other avenues not discussed here(such as accreditations), provide importantmechanisms through which NGOs can improveaccountability to funders, communities, and tothemselves. A key challenge, especially at the


international level, will lie in the coordinationof these emerging standards and accountabilitymechanisms so that they come to be viewed aslegitimate means of improving accountabilityand humanitarian response, rather than as in-struments of control and isomorphism. Theadoption and implementation of such codeswill depend both on the processes throughwhich they are developed and thus legitimated,as well as on the mechanisms through whichthey are enforced. Self-regulation as such, andcodes of conduct in particular, are not simpletools of accountability but are part of a com-plex accountability process linked to sectoralidentity, legitimacy, and normative views onorganizational behavior.

(e) Social auditing

Finally, as another mechanism of account-ability, social auditing refers to a processthrough which an organization assesses, re-ports, and improves upon its social perfor-mance and ethical behavior, especially throughstakeholder dialogue (Gonella, Pilling, &Zadek, 1998, p. 21; Volunteer Vancouver, 1999,p. 1). It is not simply a kind of evaluation––social auditing is a complex process that inte-grates elements of many of the accountabilitymechanisms discussed above, including disclo-sure statements, evaluations, participation, andstandards of behavior. While social auditinghas not been widely adopted by NGOs (nor bythe private or public sectors for that matter), itmerits examination as a distinct accountabilitymechanism because of its conceptual integra-tion of the accountability tools and processesalready discussed.A variety of models for assessing and im-

proving upon social performance have arisenover the past decade, with significant differ-ences among them. For example, the ‘‘EthicalAccounting Statement’’ developed by Pruzanand Thyssen (1994) in Denmark, focuseslargely on stakeholder dialogue and percep-tions, with limited use of systematic accountingand external benchmarking. This model wasalready in use by about 50 organizationthroughout Scandinavia by 1994 (Mayo, 1996,p. 17). Similarly, ‘‘Social Performance Re-ports’’ and their variants used by a range ofcompanies such as Ben and Jerry�s ice-creamand multinational corporations such as ShellInternational and British Petroleum, includestakeholder perspectives and a limited degreeof external benchmarking and systematic ac-

counting, but without a common standard. The‘‘Social Auditing’’ processes developed by theInstitute of Social and Ethical Accountabil-ity (ISEA) in London combines stakeholderdialogue with development of indicators andassessment protocols. The organization devel-oped a formal standard for social auditing in1999, which it revised in 2002 (ISEA, 1999,2001). Despite their differences, each of theseapproaches involves (to varying degrees)five key elements of the process: stakeholderidentification, stakeholder dialogue, use of in-dicators and/or benchmarks, continuous im-provement, and public disclosure (Gonella et al.,1998, p. 22).Proponents of social auditing offer numerous

reasons why nonprofit organizations shouldadopt the process. First it offers internal man-agement advantages in terms of monitoringperformance (Pearce, 1996, p. 7 as cited in Vol-unteer Vancouver, 1999, p. 8). A key componentof social auditing is the development of socialand environmental information systems. This isparticularly useful for NGOs that do not alreadyhave systems for analyzing and reporting ontheir social performance. Second, as a mecha-nism of accountability, social auditing enablesviews of stakeholders (such as communities andfunders) to be considered in developing or re-vising organizational values and goals, and indesigning indicators for assessing performance(i.e., downward and upward accountability).Third, social auditing can serve as a valuabletool for strategic planning and organizationallearning if the information on stakeholder per-spectives and social performance is fed back intodecision processes (Mayo, 1996, p. 9). Fourth,the external verification of social audits providesa way for NGOs to enhance their public repu-tations by disclosing information that is basedon verified evidence rather than on anecdotesor unsubstantiated claims (Pearce 1996, p. 7 ascited in Volunteer Vancouver, 1999, p. 8). Thisdisclosure and verification function is especiallyimportant not only as a response to public fearsabout the quality and integrity of nonprofitwork, but also as a means of tempering exag-gerations by nonprofits of their own achieve-ments.Despite the apparent advantages of social

audits, a number of factors have constrainedtheir adoption by nonprofit organizations.Perhaps the most important factor is cost. Thesocial auditing process can impose significantburdens of time and money, especially on smallorganizations, particularly if external certifica-


tion is desired. On the other hand, the effortand resources spent are likely to diminish withtime as the auditing process is integrated withother related systems such as strategic planningand evaluation, annual reporting, and financialauditing (Dawson, 1998). The potential forsocial audits to overwhelm NGOs with addi-tional information collection and analysis canbe countered by insisting on systems that aresimple, clear and built upon the existing ca-pacity of the NGO. For example, a study onthe relevance of social auditing for OxfamGreat Britain found that the organization wasalready following some of the key principles ofthe process and concluded that, ‘‘rather thanadopting social audit as a new cycle, a costlyand time-consuming exercise, ways should besought to ensure existing systems live up to itsprinciples’’ (Dawson, 1998, p. 1457). Similarly,Maderas del Pueblo, a rural development NGOin Mexico, has sought to integrate elements ofsocial auditing with its experience in participa-tory rural appraisal and developing local com-munity indicators (Raynard, 1998).An additional concern about social audits is

the uncertainty associated with its impact ondonors. What if an audit turns up seriousproblems in the organization or, more likely, itshows that the organization falls short of itsrhetoric on participation and poverty allevia-tion? Are not such findings more likely to deterthan attract donors? The ultimate response tosuch potential findings is dependent on keyorganizational motivations for undertaking asocial audit––whether it was undertaken pri-marily for purposes of improving performanceand accountability, or whether it was seenlargely as an exercise for enhancing publicstanding. Indeed, there is even the potential forsocial assessments to be overmarketed by or-ganizations for public relations purposes. Forexample, the Body Shop faced much negativescrutiny upon its announcement that it wasundertaking social audits to show that it was an‘‘ethical’’ company. On the other hand, theVancouver City Savings and Credit Union re-ceived favorable press in advance of its report,and even more following its release in 1998(Volunteer Vancouver, 1999, pp. 15–16). ForOxfam�s managers in the United Kingdom,information disclosure is seen as likely to en-hance the NGO�s reputation as being trust-worthy and honest. They also indicate concernby recommending the release of information ina ‘‘carefully controlled manner, to avoid themisuse of information received out of context

by those with only a partial view of the wholepicture’’ (Dawson, 1998, p. 1461). For NGOsmore generally, the use of social auditing im-plies a shift from highly circumscribed evalua-tions of individual projects or programs to abroader assessment of the organization as awhole (Raynard, 1998).Another key challenge to the adoption of

social auditing is the lack of convergence onappropriate and externally verifiable standards.The variety of emergent approaches has led toa proliferation of standards which, while in-dicative of a growing field, make it difficultto compare performance across organizations.Some of the standards, such as ISEA�s Ac-countAbility (AA) 1000 and the InternationalStandard Organization�s (ISO) 14001 Environ-mental Management Systems standards, are‘‘process-based’’ in that they specify the ‘‘pro-cesses that an organization should follow toaccount for its performance, and not the level ofperformance the organization should achieve’’(ISEA, 1999, p. 13). Such standards aim to as-sist organizations in institutionalizing processessuch as indicator development, informationcollection and analysis, integration of findingswith decision processes and, in the case of AA1000, stakeholder involvement. These standardsdo not actually rank the social or environmentalperformance of an organization in relation tosome external benchmark. Performance-basedstandards, on the other hand, attempt to setcommon benchmarks that allow for such com-parisons. Examples of these include the GlobalReporting Initiative�s new Sustainability Re-porting Guidelines and Social AccountabilityInternational�s (SAI) 8000 standard for work-place conditions in supply chains. 9

These standards, along with many others,have been accompanied by a growth in trainingand auditor certification programs offered byorganizations like ISEA and SAI, with ac-counting giants such as KPMG developingspecial divisions for ‘‘Social, Environmental,and Ethical Performance’’ directed largely atcorporate, rather than nonprofit, organizations.The extent to which these developments willlead to the use of social auditing as a mechanismfor enhancing accountability, rather than sim-ply as a public relations and management con-sulting fad, will depend on the rigor andcomprehensiveness of the emerging process andperformance standards. Initial analysis of cer-tification programs in the forest-products andapparel industries suggests that market forcesand the drive toward standardization may lead


firms to adopt the lowest common-denominatorstandards, unless watchdog groups are active indelegitimizing weak standards (Gereffi, Garcia-Johnson, & Sasser, 2001).Nonetheless, the integrated nature of social

auditing makes it a potentially valuable mech-anism for enhancing accountability. It com-bines a series of tools (e.g., use of disclosuresand evaluations) with processes (e.g., partici-pation of various stakeholders). Given its vol-untary and emergent nature, the impact andrelevance of this management approach willdepend largely on how it is marketed by its keypromoters and certification agencies, as well asby how it is used by implementing organiza-tions. A social audit can improve upward anddownward accountability only if its users seeksystematically to incorporate stakeholders intodialogue, indicator development, and perfor-mance assessment. It can increase organi-zational transparency if information that iscollected and analyzed––including evidence offailure––is disclosed to stakeholders or thepublic. As a mechanism for internal account-ability, social auditing offers a coherent frame-work for integrating organizational values andgoals with governance and strategic planningonly to the extent that its users are committedto acting on findings.

4. CONCLUSIONS: SUMMARY ANDPOLICY IMPLICATIONS

Key characteristics of the accountabilitymechanisms discussed above are summarized inTable 1. The first column lists each of the fivemechanisms, and distinguishes among those thatare tools and those that are processes. FollowingNajam�s (1996a) framework, the second columnresponds to the question of ‘‘accountability towhom?’’––upward to donors, downward to cli-ents and communities, or internally to NGOsthemselves. For example, disclosure statements,reports, and evaluations are currently usedprimarily for upward accountability fromNGOsto donors, although evaluations also have tre-mendous potential for downward accountabil-ity––by making NGOs more accountable tocommunities and by making funders more ac-countable to NGOs. While funders frequentlyrequire NGOs to seek community input in eval-uating projects, they rarely seek NGO input inevaluating themselves. Similarly, participation,which is primarily conceived by NGOs as a toolof downward accountability to communities,

has received only scant attention as a tool forincreasing the responsiveness of funders toNGOs.There are two key policy implications to

these observations. First, while traditional ap-proaches to improving accountability, such asincreased oversight through reporting and dis-closure requirements, enable a degree of up-ward accountability, they are of limited use forenhancing downward accountability. A morebalanced approach thus requires a greater rolefor NGOs in evaluating funders and for clientsin evaluating NGOs. Yet is it realistic to expectthat funders be held accountable to grant re-cipients, particularly given the asymmetries inresources and power between NGOs andfunders? There is some empirical documenta-tion of successful NGO efforts to minimizethese asymmetries, either through strategies toreduce vulnerability and sensitivity to a smallnumber of funding sources, or through the useof resources controlled by NGOs (such as in-formation and reputation) to increase their owninfluence on funders (Ebrahim, 2002; Hudock,1999, pp. 24–26; Meyer, 1999, p. 81). Whilethese rare efforts to resist donor pressures arenot couched in the language of accountability,they may be viewed as an attempt to reduce theabusive potential of too much upward ac-countability and too little downward account-ability. The key point is that downwardaccountability mechanisms remain compara-tively underdeveloped, and that NGOs are thusresponding indirectly with efforts to protectthemselves from unwanted interference fromfunders. While few, if any, donors are likely toentertain the possibility of being evaluated byNGOs that they fund, downward accountabil-ity will likely prove impossible to attain withoutserious attention to such mechanisms.A second policy implication is that improv-

ing accountability within NGOs themselvesalso needs attention to special mechanisms.Social auditing and self-regulation are twopossible mechanisms, the former being focusedon intraorganizational accountability (and withstakeholders), and the latter emphasizing sec-tor-level concerns.The third column in Table 1 focuses on the

inducements or drivers behind each account-ability mechanism. In many cases the induce-ments are external, such as legal requirementsfor annual reports (e.g., for retaining nonprofittax status) or requests by donors for quarterlyprogress data, backed up by sanctions fornoncompliance (such as loss of funding). Ex-


ternal inducements can also be more subtle,such as the erosion of public confidence inNGOs as a result of scandals or exaggeratedclaims of achievement. Internal inducementsare also common, especially in mission-drivenorganizations that believe in participation, or inthe importance of valuing the environmental,social and ethical dimensions of their activities.Accountability, as such, is not simply about‘‘being held responsible’’ (i.e., externallydriven) but also about ‘‘taking responsibility’’(i.e., internally driven).Again, the key policy implication is that ex-

ternal inducements of accountability, such asreporting requirements mandated by law or byconditions of funding, are only part of the ac-countability equation. While externally drivenmechanisms are backed up by threats that cancertainly reduce noncompliance, the legitimacy

and reputation of the NGO sector need to bebuttressed by internally driven mechanisms.For a sector that views itself as largely mission-driven, there is an urgent need to take perfor-mance assessment seriously in order to justifyactivities with substantiated evidence ratherthan with anecdote or rhetoric. Funders andregulators also bear responsibility in this re-gard. An emphasis by donors on building theinternal capacity of NGOs to develop their ownlong-term assessment tools, rather than on re-quiring regular reports of a pre-specified na-ture, might go a long way toward internalizingperformance assessment in NGOs.The final column in Table 1 characterizes each

mechanism in terms of the primary type oforganizational response that it generates––functional (i.e., accounts for resource use andshort-term results) or strategic (i.e., accounts for

Table 1. Characteristics of accountability mechanisms

Accountability

mechanism

(tool or process)

Accountability to whom?

(upward, downward, or to

self)

Inducement

(internal or external)

Organizational response

(functional or strategic)

Disclosures/

reports (tool)

––Upward to funders andoversight agencies

––Downward (to a lesser de-gree) to clients or memberswho read the reports

––Legal requirement––Tax status––Funding requirement(external threat of loss offunding or tax status)

––Primarily functional, with afocus on short-term results

Performance

assessment

and evalua-

tion (tool)

––Upward to funders––Significant potential fordownward from NGOs tocommunities and fromfunders to NGOs

––Funding requirement(external)

––Potential to become alearning tool (internal)

––Primarily functional atpresent, with possibilitiesfor longer-term strategicassessments

Participation

(process)

––Downward from NGOs toclients and communities

––Internally to NGOsthemselves

––Significant potential fordownward from funders toNGOs.

––Organizational values(internal)

––Funding requirement(external)

––Primarily functional ifparticipation is limited toconsultation andimplementation

––Strategic if it involves in-creasing bargaining powerof clients vis-�aa-vis NGOs,and NGOs vis-�aa -vis funders

Self-regulation

(process)

––To NGOs themselves, as asector

––Potentially to clients anddonors

––Erosion of public confi-dence due to scandalsand exaggeration of ac-complishments (externalloss of funds; internalloss of reputation)

––Strategic in that it concernslong-term change involvingcodes of conduct

Social auditing

(tool and

process)

––To NGOs themselves (bylinking values to strategyand performance)

––Downward and upward tostakeholders

––Erosion of public confi-dence (external)

––Valuation of social, en-vironmental, and ethicalperformance on par witheconomic performance(internal)

––Functional to the extent itaffects the behavior of asingle organization

––Strategic to the extent itaffects NGO-stakeholderinteraction, promoteslonger-term planning,and becomes adoptedsector-wide


longer-term and structural impacts on the widerNGO environment). The key observation here isthat the most common mechanisms of account-ability, such as disclosure statements, reports,and project evaluations, mainly serve a func-tional purpose because they tend to focus onaccounting for funds and measuring their short-term impacts. The complex nature of develop-ment suggests, however, that attention to morestrategic processes of accountability are neces-sary for lasting social and political change. As aresult, while reporting requirements and frame-works that are biased in favor of easily mea-surable and quantitative assessments of progress(e.g., logical framework analysis) might be suf-ficient for funding and regulatory purposes, theyundervalue long-term and qualitative assess-ments that are essential for understanding thereal impacts of development activity. Develop-ing an internal capacity in NGOs for conductinglong-term evaluations of their own work is anessential strategic response.Self-regulation and social auditing are two

additional strategic mechanisms. Self-regula-tion is strategic in the sense that it is targetedtoward change at a sector-wide level, not onlyby establishing codes for NGO behavior, butalso by forming NGO umbrella organizationsthat can engage in national-level policy de-bates. Social auditing is a strategic responsein that it can assist NGOs in forming long-termapproaches to addressing social develop-ment problems, particularly by better includingstakeholders into decision-making and bylinking organizational values to plans. For or-ganizations hesitant to engage in a full-scalesocial audit process due to resource constraints,strategic accountability is also possible through

a rethinking of existing practices, such as bymodifying short-term performance assessmentsto focus on longer-term impacts and by movingtoward participation models that increase theleverage of weaker stakeholders.The various mechanisms discussed above

demonstrate that accountability is both aboutbeing held responsible by external actors andstandards, as well as about taking internalresponsibility for actions. An integrated per-spective on accountability suggests that it op-erates along multiple dimensions––involvingnumerous actors (patrons, clients, selves), usingvarious mechanisms and standards of per-formance (external and internal, legal and vol-untary), and requiring differing levels oforganizational response (functional and strate-gic). The current emphasis among NGOs anddonors on the upward and external dimensionsof accountability is problematic in that it en-courages the formation of relationships withhighly imbalanced accountabilities. In suchcases, patrons can abuse their powers of pun-ishment by threatening NGOs with a lossfunds, by imposing conditionalities, or by tar-nishing NGO reputations (Hudock, 1999, p. 46;Najam, 1996a, p. 344; Perera, 1997). Similarly,the present emphasis on functional forms ofaccountability tends to reward NGOs for short-term responses with quick and tangible im-pacts, while neglecting longer-term strategicresponses that address more complex issues ofsocial and political change. The challenge ofaccountability lies in directly addressing thesemuch neglected components in order to even-tually find a balance between external and in-ternal, upward and downward, and functionaland strategic approaches.

NOTES

1. The terms nongovernmental organization (NGO),

nonprofit organization (NPO), and private voluntary

organization (PVO) are all used interchangeably in this

paper. For taxonomies of the sector, see Najam (1996b)

and Vakil (1997).

2. Kearns (1996, p. 43) proposes a similar integrated

framework for conceptualizing accountability organized

along three dimensions: ‘‘the higher authority to whom

organizations and individuals are accountable, the

standards of performance––explicit or implicit––for

which organizations are held accountable, and the

responses to the accountability environment––tactical

or strategic––from inside the organization.’’

3. I am grateful to an anonymous reviewer for alerting

me to this distinction.

4. For an overview of PRA and a summary of key

evaluation tools and methods, see Chambers (1994) and

Roche (1999).

5. The characteristics of such ‘‘member-accountable’’

organizations are discussed in considerable detail by


Smith-Sreen (1995). Her framework for examining NGO

accountability to members is divided into three constit-

uent parts: mechanisms for adequately addressing

member problems and suggestions, sharing of power,

and providing timely support. Although much of Smith–

Sreen�s analysis focuses on membership organizations,

many of her insights apply equally well to nonmember-

ship NGOs.

6. While the terms ‘‘sectoral’’ or ‘‘mutual’’ regulation

might be used in place of ‘‘self-regulation,’’ I use the

latter term because it seems to have more currency in the

literature. It also more clearly emphasizes an internal

rather than external dimension of accountability, while

simultaneously indicating its sectoral significance.

7. Drawing from Scott (1992, p. 305), ‘‘legitimacy’’

may be viewed as ‘‘the property of a situation or

behavior that is defined by set of social norms as correct

or appropriate,’’ or more specifically as ‘‘a condition

reflecting cultural alignment, normative support, or

consonance with relevant rules or laws’’ (Scott, 1995,

p. 45). Legitimacy, as such, is a ‘‘condition’’ to be

achieved, particularly through a process that is broadly

perceived as being socially appropriate.

8. The key sponsers were Caritas Internationalis,

Catholic Relief Services, The International Federation

of Red Cross and Red Crescent Societies, International

Save the Children Alliance, Lutheran World Federation,

Oxfam, The World Council of Churches, and The

International Committee of the Red Cross.

9. Numerous other standards and guidelines include

the Caux Round Table Principles for Business, CERES

Principles, European Ecomanagement and Audit

Scheme, Ethical Trading Initiative, Forest Stewardship

Council, Global Sullivan Principles, ICFTU Basic Code

of Labour Practice, ICC Buisiness Charter for Sustain-

able Development, and Sunshine Corporate Reporting

(ISEA, 1999, p. 52–54).

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