Tuesday, December 11, 2007

Holding Charities Accountable

When author Michael Conroy spoke at the Carnegie Council recently about his book on the certification revolution that is changing the way corporations behave, I asked him a somewhat controversial but nonetheless pressing question in the nonprofit community: Governments are elected, corporations have stockholders, but to whom are NGOs accountable?

Conroy gave a thoughtful answer, referring to democracy and the markets. In an ideal world, he said, governments that are democratically elected would listen to civil society and the initiatives that this part of civil society is advocating.

Second, these initiatives are calling consumer and business-to-business preferences on a set of values. If civil society pushes for something that the population as a whole doesn’t support, it won’t have much impact. If these advocacy campaigns don’t ring true with consumers, it won’t have impact. It speaks to the democratization of information, he said.

I would add that nonprofits have other effective stakeholders as well: Their funders, their boards, and public opinion. If they aren’t doing good work, their funding will dry up, their boards will force change, and public opinion will exacerbate the first two phenomena. To be sure, as nonprofits become more powerful, it is important to make sure they live up to the values that they espouse.

You can listen to the conversation with Michael Conroy here.

This week, The Wall Street Journal published an insert devoted to the growing philanthropic sector worldwide, focusing on the effectiveness, the power, and the accountability of this happening. On the front page of the insert, Sally Beatty cites some sobering polls taken by NYU scholar Paul Light. Based on a 2006 survey of 1,000 respondents in the United States, the following percentage agreed with these statements: About 71 percent said that charities waste a great deal or a fair amount of money; 44 percent said that directors of charities are paid too much; and only 18 percent said charities do a good job running their programs and are fair in the decisions.

Beatty suggested a three-prong approach to improve charities: 1. provide more information about the challenges and successes of charities; 2. adopt higher standards and better ways of measuring results; and 3. adhere to those standards. She suggests that charities should be more open about the problems they have encountered and publish their travails online.

Speaking of the power of the individual, a chart derived from Giving USA 2007 shows that 75 percent or about $223 billion of giving in 2006 came from individuals. Foundations come in second at 12 percent, bequests third at about 8 percent, and corporations last at 4 percent. But companies are becoming more adept at stepping in to help charities when needed, for example in the case of disasters.

Where does the money go? According to the same article, about 33 percent goes to religion, 14 percent to education, and 10 percent to human services. International affairs, our sector at the Carnegie Council, gets only 4 percent of the pie.

I would like to take this opportunity to show you our new donations web page for our program at the Carnegie Council here. We try to be as open, transparent, and accountable as possible. Please consider giving generously.


Anonymous said...

This topic has interested me for a while now. Thanks for bringing it up - and thanks for a great and thought-provoking blog.

My contention with Mr. Conroy's perspective is that NGOs, operating in the manner you described, are forced to be very results-oriented, focused on the statistically significant and immediate results that they can produce, not making a more long-term or perhaps culturally sensitive impact that might take much longer or not appear most effective to funders with Western values. It also plays deeply into the "CNN effect," support of highly-publicized causes or initiatives in certain areas only whilst it is a new phenomenon and in the media's spotlight. NGOs end up spending more time on marketing schemes, pitching their approach and less time on the ground doing.


Devin Stewart said...

The anonymous posting touches on a huge concern in the think tank world. Many worry that several factors are taking the thinking out of think tanks.

Those factors include: the 24/7 news cycle, the use of short sound bites in the context of TV commentary, the political polarization of funding and think tanks themselves, the increasing influence funders have on think tanks, and the proliferation of think tanks that results in a sharper competition for resources. James McGann has examined these problems extensively and has published his findings in "Think Tanks and Policymaking in the US: Academics, Advisors and Advocates." Here is a link:


One upside of the increased accountability or the use of "statistically significant" results is that think tanks must produce research and programming relevant to the public.

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