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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]
Mallen Baker, Development Director for Business in the Community.
Posted by DK on February 21, 2007 at 10:05 AM GMT+00:00 #
Posted by Roz on February 23, 2007 at 02:36 AM GMT+00:00 #
demonstrable value for money will increase - not decrease - donations and support...
Posted by michael schrage on February 28, 2007 at 01:46 PM GMT+00:00 #
Thanks for your response - and I completely agree about donors having the right to see how their donations are spent.
I just find it frustrating as I think the issue of accountability is massively clouded, both on the side of the organisation receiving the donation and on the side of the donor. By this I mean that in general too many charities aren't transparent with how they use their donations, and in general many donors don't make their donations having looked at how the charity will use the money.
I think the responsibilty for gaining a little clarity in this situation sits with both the charities and the donors themselves - in other words charities do need to be more accountable, and maybe donors should see their donations more as a social investment rather than on purely emotional terms.
Also I'm not sure it's laziness that prevents accountability in most cases - I think it's just trying to get an awful lot done with very limited resources.
Sam
Posted by Sam on March 01, 2007 at 09:54 AM GMT+00:00 #