Thinking Through Accountability

1. Thinking Through Accountability Nilda Bullain European Center for Not-for-Profit Law (ECNL) Budapest

2. Why is this in the focus now? • The growth both in influence and in numbers of NGOs.. • The need to generate indigenous resources.. • Some publicized cases of financial mismanagement or even fraud.. • The desire to take advantage of favorable tax regimes.. (Social Edge report)

3. Why should it be in the focus? • It is a principle issue: NGOs have to be accountable because • They are formed to someone’s benefit (members, beneficiaries, community, public) • They are supported by the public (members, donors, users, taxpayers)

4. The Accountability Gap • There is usually a gap between those who support (fund) the NGO and those who receive its benefits. • Unlike in the case of the business or the government sector, there is not a direct & objective & measurable indicator of whether we are accountable.

5. So how to measure it? • Approaches • Idealistic / Holistic • Look at the whole system including organization and its environment • Focus on theory of change in a development paradigm • Aim to measure impact building on good process • Pragmatic / Specialized • Look primarily at the organization itself • Focus on performance of areas of organizational life that are key to accountability • Aim to measure process leading to quality impact

6. How to measure? • Basic values and principles shared by all approaches. • All look at both effectiveness and efficiency. • All recognize that measuring accountability is an on-going learning process for the organization.

7. Key principles in measuring accountability • Transparency / Access to information • Honesty / Credibility / Trust • Participation / Outreach /Stakeholder involvement • Reflection / Learning / Feedback • Defining what result is being measured • Defining what process is being measured

8. (Some) Key dilemmas in measuring accountability • Regulatory, contractual or voluntary? • Standardized - to what extent? Are there non-negotiables? • How to match inherent diversity with standards? • What can we apply from the government and the business sector?

9. Element: Impact • What is our theory of change (presumptions)? • What change do we want to achieve (aims)? • How will it look like (impact)? • How do we know we achieved it (indicators)? • What steps lead to such change (based on our theory of change)? • What are the principles in achieving those steps (that determine but not prescribe process)? • Strategic management, RBPM, Logframes, policy development

10. Element: Performance • What is important in the process for it to be accountable? (E.g. transparency, participation) • How to adapt in the midst of constant change? (E.g. learning organization) • How to invest the money where it will produce the best results? (E.g. SROI) • How to balance stakeholder interests and ensure stakeholder satisfaction? (E.g. balanced scorecard) • How to ensure quality in our work?(QA systems)

11. Element: Governance • Governance – a system of checks and balances to ensure accountability. • Ultimately responsible for impact and performance of the organization. • Good governance is therefore central to accountability of organizations (public or private, profit or non-profit).

12. Element: Stakeholders • Ultimate judges of the accountability of the organization. • One stakeholder group may be biased but the overall picture is likely objective. • Therefore, in being accountable it is key to have access to all stakeholders’ input and feedback on an ongoing basis.

13. Initial understanding of elements of an accountability framework Accountability principles Self-regulation Impact Governance Stakeholders Performance Contractual relationships Regulatory environment