Panel Paper: “Accountability, Performance Management, and the Nonprofit Sector”

Saturday, November 10, 2012 : 9:10 AM
International B (Sheraton Baltimore City Center Hotel)

*Names in bold indicate Presenter

Steven Smith, Georgetown University

Nonprofit organizations play an essential role in the representation of citizen interests and the implementation of public policy.  They also can be critical to the capacity of citizens to hold government accountable and to the initiation of policy reform.  Yet, the role of the nonprofit sector in public policy continues to evolve in the US and abroad. The growth of nonprofit organizations as service delivery organizations has meant a much different relationship between nonprofits and government.  Moreover, the advent of the New Public Management (NPM) has increased the scrutiny of nonprofit organizations by government especially through new policies such as performance based contracting and required outcome evaluations.  Many governments have also instituted new regulations requiring more reporting and transparency by nonprofit organizations in their governance and operations.  These new initiatives are often supported by leading foundations and think tanks who call for greater efficiency and effectiveness in nonprofits.  Amidst this call for greater accountability, broadly defined, nonprofits may find their capacity to represent citizens to be severely constrained.  Nonprofits may be reluctant to actively engage in advocacy, lest their advocacy interfere in their relationship with government.  Alternatively, nonprofits may participate in the policy process but focus on organizational concerns rather than broader community or citizen interests.  Research also suggests that greater accountability expectations and regulations tend to professionalize nonprofits which may diminish their connections to local communities. The focus of the paper will be an investigation of the implications of accountability for the governance of nonprofit organizations, especially in the fields of social and health services.  Absent shareholders, nonprofits are accountable to a volunteer board of directors.  But nonprofits are also indirectly accountable to government and the taxpayers since they receive tax benefits and subsidies.  Arguably, nonprofits are also accountable to their local communities at least indirectly since they hire and provide services to local citizens.  Nonprofits are also accountable to local communities because they typically emerge from a particular community of interest such as citizens concerned about high-risk youth.   Increased accountability expectations for nonprofits may shift the orientation of nonprofits away from this community of interest to public and private funders, with profound consequences for the governance of nonprofits and their relationship to service users.  The empirical research for this paper is based upon ongoing research by the author on the new performance management expectations upon nonprofit organizations and their implications for the accountability of nonprofits, especially their accountability to government and their communities.  The focus will be upon local community-based organizations in social and health care and is directly relevant to current public management initiatives such as performance contracting and the performance initiatives of private funders and intermediary organizations such as Charity Navigator.