YouthNet blog

Tuesday Feb 20, 2007

Non-profits and accountability - again

Ever since I read Michael Schrage's article in the Financial Times on transparency in the voluntary sector I've been mulling over why it gets my goat so much.

I think part of it is that I'm getting seriously bored hearing the same thing about accountability and transparency. I also think the article contains quite a few huge generalisations that aren't particularly helpful to the whole debate.

To kick things off, Michael says:

"...corporate results are measured in the marketplace while philanthropic results are not. That invites mischief and mismanagement."

I'm sure this has been written to provoke debate (or wind up people like me in the voluntary sector), but I don't think you can draw immediate comparisons between the private and voluntary sectors when it comes to measuring results. I don't believe outcomes for non-profits are as clear cut as the financial performance of a company.

For example, how do you measure the success of a young person leaving the care system managing to budget for their weekly shop for the very first time? Is that comparable to a strong performance over the financial year? I'm being slightly facetious here – I know he's talking about financial performance in both the private and voluntary sectors, but I still think it demonstrates the point that solutions for the voluntary sector don't always involve replicating what the private sector does.

All too often it feels like "big business" thinks it can rock up and tear into the way charities operate – don't get me wrong, of course there are an awful lot of lessons the voluntary sector can learn from the business world, but there seems to be little or no reciprocation in terms of the private sector taking things from successful non-profits.

Later, Michael says:

"Freedom and fairness demand individuals and institutions have a right financially to support lawful ideals and causes. That right does not entitle philanthropists to policies subsidising inefficiency and opacity."

I completely agree – but he seems to miss the point that all this transparency and opacity comes at a cost. Who should fund the time, systems and processes needed to bring all this transparency in?

Increasingly, non-profits find themselves spending more of their time reporting on how they've spent donations, which of course is central to the push for accountability.

However, I wonder how many donors would be happy to know that rather than their donation funding 10 vaccinations, or a new well for example, the charity has used it to send time reporting on how they've spent a donation from someone else?

If the business world is so exasperated by the lack of transparency in the voluntary sector, rather than moaning about it perhaps it should put its hand in its pocket and provide the resources (and cash) that charities need to improve.

Interestingly enough, another article in today's FT says that: 

"Consumers in five of the worlds leading economies believe business ethics have worsened in the past five years and are turning to "ethical consumerism" to make companies more accountable."

So, perhaps the corporate sector has still got some work to do around  accountability then.

Or maybe I'm just feeling a bit defensive about it all...

Posted by Sam Thomas ( 5:12 PM ) Link to this post Comments[4]

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Destination 2014

Consultation lovers will, no doubt, already have discovered the Destination 2014 website. It's where you can have your say about the plans of Capacitybuilders in the aftermath of their decision to play a more central role in running the voluntary sector infrastructure at the expense of the sector Hubs.

NCVO, one of the organisations that stands to lose most from the Hubs reduced role, has produced an interesting briefing about the Destination 2014 document, welcoming some proposals but expressing strong concerns about what appears to be an extension of Capacitybuilders role.

3.4 Capacitybuilders appears to have given itself a much broader focus, describing its vision for the sector as a whole, and setting out its remit in a way which goes substantially beyond its agreed mission... And yet the consultation does not ask whether voluntary and community organisations agree with the role Capacitybuilders sees for itself and how it plans to move forward and achieve change and its key objectives. Capacitybuilders needs to seek agreement with the sector as to where it should prioritise its energies, in order to then determine its operational activities.

It will be interesting to see how many people express similar comments throughout the consultation, and how Capacitybuilders - an organisation launched only a year ago and currently funded solely by government - responds.

Posted by Tom Green ( 9:50 AM ) Link to this post Comments[0]

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