What Does Accountability Mean to You?

There was plenty of finger pointing last Tuesday morning as WNYC's talk show host Brian Lehrer led a spirited discussion with a live audience on the subject of "Occupy New York." The most contentious topics were accountability for U.S. income disparity, and the causes of our financial crisis. Former New York governor Eliot Spitzer accused the Federal Reserve of lack of oversight; New York Federal Reserve Deputy Chairwoman Kathryn Wylde blamed international economic pressures; and Occupy Wall Street protester Jesse LaGreca blamed a non-representative democracy.

Yet despite their bickering, the panelists agreed that the income disparity in America is unacceptable; that the economy needs to improve; and that accountability is lacking. Amid the rapid-fire disagreements, there was a common struggle to grapple with the complex, systemic causes of our country's wobbly moment.

In an effort to poke a hole in LaGreca's arguments, business columnist Greg David asked, "What does accountability mean to you?" It's a fair question. Accountability is often vaunted as the unimpeachable principle missing from our country's response to recurring recessions and the widening income gap. And when we look at past bailouts of "black swan" level crashes and the moral hazard inherent in having institutions that are "too big to fail," it's clear that our system of accountability needs to be reconfigured. But how? In the heat of the debate, LaGreca defined accountability as investigations of bankers and corporate leaders, rather than a more global approach.

When Lehrer drew out LaGreca on the decision-making process underway at Occupy Wall Street, it became clear that LaGreca envisions the movement as a testing ground for a new form of accountable government. LaGreca is looking for a unicameral legislature (similar to Occupy Wall Street's General Assembly) where a 51 percent majority would be enough to pass a bill, thus ending the filibuster. He wants to eliminate political parties entirely and convert our system into a direct democracy.

With such a system, LaGreca contends, we would cut out the problems of campaign finance, party platforms, and special interests that stand in the way of true democratic consensus. Without party platforms or corporate interests to consider, he says, leaders would be accountable to their voters. With this new idea on the table, the meaning of accountability and its place in society has shifted.

LaGreca's plan is idealistic, and maybe impractical. Still, while parsing blame is a necessary step towards injecting accountability into the political-economic climate of the United States, it is clearly insufficient. We need more of the big-picture discussion that Lehrer was able to spark on Tuesday in order to truly confront and deal with the systemic lack of accountability.

[PHOTO CREDIT: Timothy Krause (CC).]

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.

(Photo by TW Collins.)