NGOs: ISSUES OF ACCOUNTABILITY

Carol Ann Tilt

School of Commerce
Flinders University
Email: Carol.Tilt@flinders.edu.au

SCHOOL OF COMMERCE RESEARCH PAPER SERIES: 05-7

ISSN: 1441-3906

Acknowledgements
The author would like to thank Mr Matthew Tilling for his comments on early drafts. All
errors are the responsibility of the author.

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 NGOs: ISSUES OF ACCOUNTABILITY

ABSTRACT

The increasing emphasis on NGOs as one of the stakeholders of corporations has

lead to academics, and social and environmental accounting scholars in particular,
to call for research to be undertaken on the level of accountability of the NGOs
themselves. This paper outlines the need for a different conceptualisation of
accountability for NGOs, than the one we use when calling for greater accountability
of corporations, and demonstrates there already exists effective accountability
mechanisms. A major flaw in the argument for greater NGO accountability is that it
is usually presented from a perspective that ignores the conflict between control and
the role that NGOs play in civil society - a role that provides a voice for those unable
to speak for themselves, and counters the views of more powerful groups. NGOs
play an important role in society and in the absence of motives for existence such as
profit or power it is necessary to apply different criteria when judging their
effectiveness.

INTRODUCTION

Corporations are being called upon to account for their actions that affect society and the
natural environment more and more. At the forefront of many of these calls are various non-
government organisations (NGOs) who demand that corporations provide information about
their actions to the public arena (Spar & Mure, 1997). In turn, academics have called upon
corporations to engage with NGOs in order to be more accountable (O'Dwyer, 2002;
O'Dwyer, Unerman, & Bradley, 2003; Unerman & Bennett, 2004).

This increasing emphasis on NGOs as one of the stakeholders of corporations has recently led
to academics, and social and environmental accounting (SEA) scholars in particular, to call
for research to be undertaken on the level of accountability of the NGOs themselves. Much of
this literature calls for NGOs to be made more accountable than they are currently, and
suggests that ‘social accounting’, the topic of a great deal of research in terms of corporations,
might also be applied to NGOs. Despite the implication such calls suggest – that there has not
been much research done on NGO accountability – there has, in fact, been a number of books,
reports, newspaper articles, special editions of journals, and an international comparative
study published on the issue. These publications however, are almost exclusively from
outside the accounting/business discipline, coming mainly from the not-for-profit and
development studies literature, but also from sociology, political theory and law. This
research will be reviewed in subsequent sections.

The main aim of this paper is to attempt to counter two implications of the current call for
more accountability of NGOs: First that the current level of accountability is insufficient; and
second, that requiring corporations to be more accountable might be hypocritical without
requiring the same accountability of NGOs. This paper does not suggest that NGOs should
not be accountable however, but rather shows that NGOs are already accountable in a variety
of ways. More importantly, it demonstrates the need for a different conceptualisation of
accountability for NGOs than the one used for the accountability of corporations. The
argument centres on the fact that any form of mandated accountability for NGOs unavoidably

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results in NGOs that “cease to be effective non-government organisations” (Wapner, 2002b,
p.159, emphasis in original), and that there are inherent contradictions and paradoxes in
requiring a ‘corporate’ style of accountability.

The following section reviews the research undertaken on the accountability of NGOs,
including a description of the different types of accountability and the major problems with
NGO accountability identified in the literature. This is followed by an examination of the
different conceptualisations of the nature of accountability accompanied by some definitional
issues. This section concludes with an argument in defence NGOs’ current level of
accountability. Finally, some general comments and conclusions are provided.

PRIOR RESEARCH ON NGO ACCOUNTABILITY

A review of the literature on NGO accountability identifies a number of issues revealing it as

a multifaceted and complex subject (Edwards & Hulme, 1996a). The questions raised include
to whom and how NGOs should be made accountable, what are the different types of
accountability that exist and what sort of accountability mechanisms are appropriate.

This literature has come from three major sources: The popular press, mainly as a response
from corporations and business who have been targeted by NGOs (Burton, 2003; D'Cruz,
2003; Maitland, 2003; Upadhyay, 2003); academic sources, predominantly legal,
development, and not for profit sector researchers (Najam, 1996; Spar & Mure, 1997;
Hudson, 1999, 2000; Jordan & van Tuijl, 2000; Spar & Dail, 2001; Spiro, 2001; Keohane,
2002; Slim, 2002; Kamat, 2003); NGO monitoring agencies (Steinberg, 2003; NGO Watch,
2004); and NGOs themselves (Uphoff, 1996; Marschall, 2002; Edwards, 2003; Kovach,
Neligan, & Burall, 2003b; Assokou, 2004; Vedder, 2004).

The Call for Accountability

The pressure for NGOs to be made accountable is quite often accompanied by some form of
questioning of the legitimacy and credibility of NGOs. The criticism has predominantly come
from those affected by NGO actions, including multi-national corporations, governments and
international organisations (Hudson, 2000). In Australia governments are scrutinising NGO
activity (Kremmer, 2003) and there is “a corporate funded think-tank is proposing a system of
accreditation for non government organisations” (Burton, 2003, p.1). NGO disclosure and
fund-raising laws are often disparaged as being “vague and not enforced” (D'Cruz, 2003, p.1).
A report by SustainAbility suggests that accountability is vital for international NGOs
(Maitland, 2003) and a 2004 press report suggests that “millions of groups… are (not)
subjected to …meaningful oversight” (Christensen, 2004, p.1). Even some NGOs themselves
have joined others in expressing the need for, and importance of, accountability (Marschall,
2002), but some voices also speak of the dangers of increased accountability requirements
(Cronin & O' Regan, 2002b) and these will be outlined later.

When it comes to whom NGOs owe accountability, there is a list of the usual suspects,
including donors, members, the poor and disadvantaged, and society itself. The majority of
respondents to a recent survey when asked this very question, considered that NGOs owe
accountability mainly to those who provide resources, “donors, trustees and boards of
governors”, rather than being accountable “for the positions they take” (Hudson, 2000, p.5).

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This issue will be considered in more detail in the final section of this paper on the
conceptualisation of NGO accountability.

When considering mechanisms for ensuring accountability, the most obvious is to ensure that
NGOs are transparent as full disclosure about their activities will enhance public trust
(Marschall, 2002). This is the model we have applied to corporations. Reporting alone is
insufficient, however, as there must also be access to the information (Neligan, 2003). A
major report was undertaken in 2003 on the accountability of international NGOs that
investigated access to online information and information on member control of governance
for NGOs, inter-governmental organisations (IGOs) and transnational corporations (TNCs)
(Kovach, Neligan, & Burall, 2003a; Kovach, et al., 2003b). The report concluded that
international NGOs provide little online information about their activities compared with
other organisations (Kovach, et al., 2003a). In particular, the section of the report focussing
on access to online information measured accountability by looking for the public
accessibility of certain attributes in their reporting. These are summarised in Table I.

Table I: Global Accountability Report

Access to Online Information – Good Practice
Description of targets objectives and activities
Evaluations of main activities
Identification of key members of the organisation
Number of votes each member holds
Description of decision making bodies
Identification of individuals on executive body
Agendas, draft papers and minutes
Disclosure policy
Annual reports that are audited
Information in other languages

This type of accountability mechanism however, is based on the assumption that

accountability is the same for any type of organisation. The Global Accountability Report
(Kovach, et al., 2003b) itself makes direct comparisons between NGOs and corporations.
This assumes we can treat NGOs in the same way that we treat companies, an argument
which has a number of flaws. Not least is the proposition that NGOs have quite a different
role to play in society as will be discussed later, but it should also be noted that companies
themselves seek to avoid accountability where possible, and have often been shown to have
weak accountability mechanisms (The Economist, 1994; Edwards & Hulme, 1996b, 1998).
One only has to consider the spate of recent corporate collapses for examples of significant
accounting requirements but little accountability.

Types of Accountability
A number of authors consider it important to distinguish between internal and external
accountability of NGOs (Spiro, 2001; Keohane, 2002). Internal accountability, to members or
boards, is often directly contrasted to the accountability of states to their electorate,
highlighting the problem that members have little ability to effectively monitor or influence
the actions of the NGO as voters do with governments. On the other hand, competition
between NGOs serves as an accountability mechanism as it is easy for members to transfer
their membership at relatively little cost (Spiro, 2001). External accountability mechanisms

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include international law and participation in international forums such as those organised by
the United Nations (Spiro, 2001).

An NGO’s reputation amongst both its members and its peers is also seen as an important
type of accountability (Keohane, 2002; Marschall, 2002). Limitations in funding and weak
levels of influence mean that in order to be effective, NGOs must cooperate with each other in
networks and earn the trust and respect of their peers (Keohane, 2002; Wapner, 2002a).

Finally, NGOs are considered to have a moral obligation to act in the public interest and are
accountable for what they say and the positions they take on particular issues (Slim, 2002),
thus they must be accountable for the values they promote: “It is what it does, and not
representation, that makes an NGO legitimate” (Marschall, 2002, p.2).

These issues are considered in more detail later in the paper, when examples of how NGOs
are currently held accountable are provided.

The Problems
A major theme to emerge from the literature in this area is that there are limitless problems
inherent in trying to determine if and how NGOs should be held accountable. The variety of
NGOs that exist in terms of size, issues and power (Ginsburg, 1998; Hudson, 2000) means
that a ‘one size fits all’ approach to applying accountability is inappropriate. The notion that
global civil society1 itself is a unified subject is fallacious (Keane, 2003) and equally it cannot
be suggested that NGOs are a homogeneous group. NGOs range from ‘grassroots’ generally
single-issue organisations, to large international ‘macro-level’ advocacy groups (Kovach, et
al., 2003a). For grassroots organisations it is easier to determine to whom they are
accountable – those with an interest in the single issue. For international ‘macro’ groups
however, it is much less clear. Applying a single model of accountability across the sector
can thus lead to “inappropriate accountability” being accorded to some (Leat, 1988, p.37).
Similarly, when discussing NGOs do we include groups such as the Ku Klux Clan? Do we
include business-related organisations? These definitional problems – trying to determine
what we mean by the term ‘NGO’ – will be discussed further below.

Just as there is a variety of different types of NGOs, the claims made upon NGOs are not
“coherently aligned with one another” either, as NGOs have a variety of stakeholders (Brown
& Moore, 2001, p.574). Ebrahim (2003, p.814) argues that NGOs face the competing
demands from these multiple stakeholders “more acutely and regularly than do private firms”.
The issue of multiple stakeholders, while at best making accountability more complex (Leat,
1988), can be additionally problematic because such competing demands can actually lead to
poorer performance – satisfying clients and donors can sometimes be in conflict with the
organisation’s long term goals (Brown & Moore, 2001). An example provided by Brown and
Moore (2001, p.580) describes a large children’s program that was closed down by the
auditors because one of the partners had been “padding an expense account”.

Problems also arise through the difficulty in evaluating and measuring what NGOs do given
the sometimes very specific nature of work done by single issue organisations (Marschall,

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NGOs are often considered a major component of global civil society, and the term is often used to describe
NGOs. Keane describes global civil society as including “individuals, households, profit-seeking businesses,
not-for-profit non-governmental organisations, coalitions, social movements and linguistic communities and
cultural identities. The concept, and the role of NGOs, is a complex one, but further discussion is beyond the
scope of this paper.

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2002). There is no “straightforward …measure of organizational …effectiveness, …(NGOs)
have no readily acknowledged ‘bottom line’” (Fowler, 1996, p.174). There are also implicit
inclusions of normative principles in setting benchmarks for accountability (Spar & Dail,
2001; Keohane, 2002). Uphoff (1996, p.32), suggests that attempts to measure and quantify
the work done by NGOs will in fact “conflict with the objective of sustainability”. He
suggests that the emphasis will necessarily be on short-term, measurable benefits, overlooking
positive externalities, particularly those that will benefit future generations. Similarly, in a
report from an aid issues group, it is suggested that NGOs and their projects are “treated as
closed systems for the sake of analysis, …yet there may be …benefits outside of this closed
system” (Cronin & O' Regan, 2002b, p.5, emphasis in original).

Finally, the effect of making NGOs accountable on their ability to contribute to society,
particularly as a ‘dissenting voice’ to counterbalance government and corporate actions, is
extremely important (Edwards, 2003). Leat (1988, p.7) describes this problem:

The voluntary sector is valued for its independence and flexibility; because it is
valued it becomes more central; because it is more central it must be made more
accountable; but how is greater accountability to be achieved without damaging
independence and flexibility?

It is this point that this paper considers paramount to any discussion of whether NGOs’
current level of accountability is sufficient. Before any questions about NGO accountability
can really be addressed however, it is necessary to first consider the role of NGOs in our
society. This issue is therefore the subject of the next section.

CONCEPTUALISING NGO ACCOUNTABILITY

Defining an NGO
Before we can understand the issue of accountability of NGOs it would seem important to
define them and consider their major roles. Neither of these is a simple task and the act of
defining an NGO is referred to by Martens (2002, p.271) as a “mission impossible”. After
providing accounts of both the juridical and sociopolitical perspectives of NGOs, she
advances the following definition:

NGOs are formal (professionalized) independent societal organizations whose

primary aim is to promote common goals at the national or the international level.
(Martens, 2002, p.282)

It is beyond the scope of this paper to discuss the difficulties in defining an NGO in detail,
and while this is acknowledged as a limitation, the arguments discussed in this paper could be
applied to most NGOs that operate at a national or international level. Therefore, for the
purposes of this paper, all not-for-profit organisations that meet the above definition are
included when referring to NGOs2.

As outlined above, NGOs range in size, nature and scope and it could be argued that such a
“heterogeneous set of institutions” (Ginsburg, 1998, p.1) cannot be treated as one group.

2
In this paper the term NGO is used exclusively. However, other terms are used which represent a particular
section of NGOs (such as community-based organisation (CBO)), or terms which attempt to encompass all
NGOs (such as The Third Sector) and these are often used inconsistently and/or interchangeably.

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However, three major functions of NGOs can be broadly identified: to provide services
(welfare); to provide education; and public policy advocacy (Stromquist, 1998; Brown &
Moore, 2001). These functions are particularly important “in the absence of stable political
parties or organized low-income constituencies to carry out such activities” (Stromquist,
1998, p.2). Their crucial role in representing the disempowered, and monitoring the actions
of governments, cannot be understated, yet in calling for increased accountability, there is an
undertone of criticism of NGOs, suggesting that they are not carrying out their role
appropriately. While there are obviously examples of NGOs acting inappropriately, it seems
harsh to single out NGOs “in a world of discredited governments and unaccountable
corporations” (Edwards, 1998, p.1).

The Role of NGOs – Legitimacy and Credibility

The arguments presented in support of, or against, NGOs are characterised by the different
perspectives the authors bring to their analysis. These perspectives are “captured by
typologies or mappings of social theory paradigms” and their views of the role of the state
(Ginsburg, 1998, p.1). The lack of, or weak, state structures in many countries is cited as a
direct driver of the increased numbers of NGOs seen in more recent times (Salamon, 1994;
Spiro, 1995).

Those who view NGOs from a functionalist perspective employ equilibrium theory and view
NGOs as essential to compensate for the inefficiencies of the state, whereas conflict theorists
view the state as unresponsive to the needs of local “workers, women, and minority/ethnic
groups” as they concentrate on the needs of “national or global capitalists” (Ginsburg, 1998,
p.2). Thus, Ginsburg (1998) suggests that from either paradigm NGOs can be seen as playing
an important role, and it is the conceptualisation of democracy that results in different
evaluations of NGOs. Those who perceive the state as it currently stands as desirable may
criticise NGOs as being less accountable than governments because NGOs are not
democratically elected. On the other hand, particularly “in the context of authoritarian
regimes” (Ginsburg, 1998, p.2), NGOs are “an essential counterweight to state power”
(Edwards & Hulme, 1998, p.1) and thus an integral component of the mechanisms for holding
governments accountable, challenging the political order, and the development of more
participatory politics (Dalton, Kuechler, & Burklin, 1990; Edwards, 2003).

The critical research, from both paradigms, appears to centre around issues of whether NGOs
are legitimate and credible (Edwards, 1998; Hudson, 2000; Fries, 2003). Their legitimacy and
credibility having a direct impact on the question of whether they are, or should be,
accountable. Slim (2002, p.7, emphasis in original) discusses the various “sources” of
legitimacy of NGOs from two viewpoints: that it is “derived” from moral and legal sources,
and is “generated” from tangible and intangible sources.

NGOs derive Legal legitimacy by acting within international law and by being law abiding.
In particular, NGOs are recognized by Article 71 of the United Nations (UN) Charter. NGOs
also use international law to further their causes by referring to “human rights law,
international humanitarian law and refugee law” (Slim, 2002, p.6). NGO legitimacy however,
is broader than being recognised under the law, and is fundamentally “morally derived” (Slim,
2002, p.7). The case made for NGOs’ very existence is based on values such as “equality,
dignity, impartiality, justice, freedom and personal and collective responsibility … that
resonates with the moral reasonableness of people across the world” (Slim, 2002, p.7).

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The generation of legitimacy is accomplished through receiving tangible support from those
people the NGO seeks to help – members and supporters. Even for non-membership
organisations, the financial support provided by the public, and the in-kind support supplied
by volunteers, provides tangible evidence of an NGO’s legitimacy. Legitimacy is also
generated by good performance. NGOs that perform well will receive greater tangible
support and this provides evidence that they are achieving the goals they set out to
accomplish. Hence, the link between legitimacy and accountability is very important (Slim,
2002). Intangible sources of legitimacy include reputation, credibility, trust and integrity.
“These intangible qualities generate what an accountant might call ‘goodwill’ on her balance
sheet” (Slim, 2002, p.8).

In order to improve their credibility, a number of NGOs have begun to organise themselves
into groups or associations such as the Union of International Associations (UIA3). This
association provides a registry of information on over 40,000 international NGOs, and aims to
facilitate networks, conduct research and disseminate information about NGOs. Others,
particularly in the area of humanitarian aid, have developed inter-agency charters, codes and
other accountability mechanisms (Slim, 2002), discussed further below.

Defining Accountability of NGOs

It is important to begin this section with a definition of accountability generally before it is
possible to consider NGO accountability. Gray et al. (1986; 1988; 1996) describe
accountability as “the duty to provide an account …or reckoning of those actions for which
one is held responsible” (Gray, et al., 1996, p.38). For NGOs, unlike corporations, this
predominantly involves accounting for their actions and effects on society, rather than
accounting for their financial performance to a specific set of stakeholders. NGOs by their
very nature make little or no profit and therefore calls for ‘corporate’ style accounting make
little sense in this context, notwithstanding that most research in the area to date has focussed
on this type of accountability to donors (Edwards & Hulme, 1996c; Najam, 1996). More
appropriate, may be the type of social and environmental accounting (SEA) that is the subject
of much research, and some experimentation by business (Gray, 1992; Gray, et al., 1996;
Deegan, 2000).

Much of the research on corporate accountability, even in the SEA literature, focuses on
‘public’ accountability. Accountability of NGOs however, is a dynamic concept (Ebrahim,
2003) and arguably more complex than simply making them transparent and allowing public
scrutiny, which highlights the issue of competing stakeholder interests. NGOs, like other
organisations, must prioritise their stakeholders, but this can have dire consequences for their
existence. Brown and Moore (2001, p.581) suggest that it makes sense for many NGOs to
“commit themselves to more accountability to their clients (rather than donors)”. They argue
that if they provide assessments of their performance to clients, the clients will only be
prepared to talk about problems if donors are not also evaluating the program, for fear of
losing future funding if they criticise the program. Ironically, if NGOs resist the demands for
accountability made by funding bodies and donors, they may lose funding anyway (Brown &
Moore, 2001; Ebrahim, 2003).

Slim (2002) in an overview of the NGO Accountability literature over the last ten years,
outlines two kinds of accountability for NGOs: ‘performance’ accountability and ‘voice’

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http://www.uia.org/uia

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accountability. Performance accountability requires NGOs to be accountable for what they
do, and in the 1990s, in response to a number of criticisms, the humanitarian NGOs responded
by developing a “Code of Conduct, a Humanitarian Charter and a set of technical standards”
(Slim, 2002, p.3). They also developed the “Humanitarian Accountability Project4 (HAP),
…(placed) a new emphasis on the quality and transparency of evaluations, …(created) an
active learning network …(and developed) initiatives to explore quality models and
professional accreditation” (Slim, 2002, p.3). This kind of accountability is similar to that
which we require from corporations, and is focussed on accountability to donors (patrons) and
clients (Najam, 1996).

Voice accountability on the other hand, requires NGOs to be accountable for what they say.
That is, they are accountable to “an abstract purpose” (Brown & Moore, 2001, p.570). This
form of accountability is similar to what Najam (1996, p.348) calls “accountability to
themselves”, where NGOs are accountable for their goals and aspirations, and for their
mission. Over the last ten years NGOs have had to respond to both “the veracity of what they
said and the authority with which they spoke” (Slim, 2002, p.4, emphasis in original). Their
response has been to develop research capacity within NGOs or to make strategic alliances
with academics or other research groups. NGOs are also discussing voice accountability
within themselves. This has mainly centred around “how their voice relates to the people they
are primarily concerned about – the poor, people whose rights have been violated, and the
victims of war” (Slim, 2002, p.5). These discussions are summed up by Slim (2002, p.5,
emphasis in original) who asks “do NGOs speak as the poor, with the poor, for the poor or
about the poor?”

The answer to this question depends on the nature of the NGO. A local Community Based
Organisation (CBO) is usually made up of poor people or victims and hence is speaking as.
Those organisations who work within the community would be considered speaking with.
Those groups that work for people who are unable to speak for themselves are said to be
speaking for. And those who are so large or general that they could not be considered any of
the previous three, are thus speaking about. Of course, in many circumstances, an individual
NGO may be doing two or more at the same time thus highlighting the disparate and complex
roles that NGOs play in our society (Slim, 2002).

An important issue when considering the accountability of NGOs is the means by which they
will be required to provide an account. Leat (1988, p.20) outlines three types of
accountability, “explanatory accountability…, accountability with sanctions… (and)
responsive accountability”, suggesting that the only “full accountability” is that where
sanctions are imposed if the account or actions are inadequate. Corporations are regulated,
and sanctioned, by Governments to report on their activities, but regulation by governments
of an organisation whose most important role is often to counter the power of those
governments presents a paradox that is difficult to resolve, particularly when many NGOs
work across national borders. Thus, the problem inherent to political accountability also
applies to NGOs – “There is no single, global, public will” making it difficult to be
accountable to conflicting views of what is “good” (Wapner, 2002b, p.159). Notwithstanding
these problems, and that there are currently few mandated reporting requirements for NGOs,
most NGOs do in some way try to influence state behaviour. Therefore, they must often
“adjust their strategies, goals and relationships to appear attractive to states”, which already
adds a “layer of accountability to their actions” (Wapner, 2002b, p.158-9).

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http://www.hapgenva.org

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NGOs are in fact already accountable in a number of ways including to their members,
donors, boards, their own networks, international organisations, and governments (Brown &
Moore, 2001; Spiro, 2001; Wapner, 2002a, 2002b). Their involvement in political
engagement itself instils “habits of cooperation and public spiritedness within” and enhances
“collaboration and social solidarity outside it” (Wapner, 2002b, p.155). Just as “most states
obey most agreed rules… most of the time” (Bull, 1977, p.137), most NGOs also follow
agreed rules and are thus supported by millions of people (Wapner, 2002b). Some of the
ways that NGOs are already accountable are now discussed.

Demonstrating Accountability of NGOs

While recent calls for accountability of NGOs suggests a corporate style of accountability be
adopted, as mentioned above, a lot of research examines the accountability of NGOs in
comparison with the accountability of states (Spiro, 2001; Wapner, 2002a). This section
briefly addresses both these streams of literature.

Politicians are accountable to their constituents who voted them into power and “the liberal,
democratic state stands as the paragon of accountability” (Wapner, 2002a, p.198). Leaders of
NGOs on the other hand are rarely democratically elected and thus have no ‘constituents’ to
account to. Thus, they are usually considered accountable either to their donors and sponsors
or to society in general – the onus being on them to account for what they believe in – and
many critics suggesting that they are not accountable at all.

Such a comparison however, is flawed. The support for NGOs without political
accountability or elections is a “deliberate choice of our society” and society recognizes that
the existence of NGOs “enhances and stabilizes civil society” (Chisolm, 1995, p.150). In
addition, there is ample evidence that the accountability of states, even liberal democratic
states, is “far from perfect” (Spiro, 1995; Wapner, 2002a, p.205). Currently around 40% of
the world’s governments are undemocratic and “thus enjoy few internal mechanisms that hold
state officials accountable to their people” (Wapner, 2002a, p.205). Theories of democracy
“explain ways in which the will of the people is often subverted …as citizens try to have their
interests expressed in a representative framework” (Wapner, 2002a, p.205). Even
international accountability mechanisms such as U.N. membership, serve as weak constraints
on states with many finding ways around these rules or guidelines, or simply ignoring them
(Wapner, 2002a). Discussion of undemocratic regimes in the literature criticising NGOs is
often not present. While it is true to say that NGOs have different constraints upon them
when compared with states, it is not true that they are therefore not accountable – rather they
“are held accountable differently than states” (Wapner, 2002a, p.200, emphasis in original).

Moreover, NGOs have no tools of coercion, such as police or armies, that are at the disposal
of states. Their existence depends on their reputation and credibility, thus the provision of
inaccurate or misleading information risks the very foundation of the organisation (Wapner,
2002a). NGOs, unlike states, are “sovereignty-free” (Rosenau, 1990, p.36), thus work for
people throughout the world, not only those within their territorial boundaries, and therefore
the geographical scope of their constituency is wider and differently constituted than states,
making them “arguably more accountable to global citizenry than states” (Wapner, 2002a,
p.204, emphasis in original).

Internally, like businesses, NGOs have their own organisational structure and processes that
“effect mechanisms of responsibility and obligation to others” (Wapner, 2002a, p.205). They

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are held accountable to their members in that failing to satisfy members’ needs will result in
loss of patronage in terms both of membership and financial support (Wapner, 2002a). NGOs
are also held accountable to their Boards of Directors or equivalent. Like corporations, NGO
boards often include outside experts and are made up of people not involved in the day to day
operations of the organisation, giving them a broader and more objective perspective. Boards
can remove managers and “shape the broad outline of campaign work” and therefore act “as
monitors, evaluators, and reviewers …providing an additional, internal layer of
accountability” (Wapner, 2002a, p.202). And as we have seen NGOs becoming more
professional in recent times, more accountability mechanisms are put in place.

Externally, NGOs are held accountable by donors or funding bodies who often employ
experts and impose technical criteria to assess the data collection and analysis for particular
programs (Ebrahim, 2003). They are accountable to these resource providers “as a matter of
prudence... as a matter of law… and as a matter of ordinary morality” (Brown & Moore,
2001, p.578).

The recent proliferation of NGOs has also resulted in competition between groups for
members and funding, itself serving as a check on power and thus a form of accountability
(Wapner, 2002a). Notwithstanding the competition however, NGOs also often share a
community, meaning they share information and collaborate closely. This cooperation brings
with it responsibilities and obligations, as collaboration opens the NGOs up to scrutiny and
evaluation. When collaborating with each other, “accountability becomes part of the price of
increased transnational effectiveness” (Wapner, 2002a, p.202). Further, NGOs are also
accountable to IGOs with whom they wish to work. International organisations require
certain competencies to be demonstrated by NGOs before they are allowed to participate in
conventions or other fora (Wapner, 2002a). Wapner (2002a, p.203) suggests that “somewhat
paradoxically”, NGOs will also be accountable to states when they choose to become
involved in partnerships and participate in policy formation.

NGOs discharge their accountability in a number of ways, including disclosure and reporting,
undertaking performance assessment, engaging in community participation and through self
regulation (Ebrahim, 2003). There are various reporting requirements in law in many
countries, particularly in order for an NGO to gain tax exemptions and these requirements are
directed at providing accountability to the public at large (Chisolm, 1995; Ebrahim, 2003).
These often require quite detailed information about finances, organisational structure and
programs, but such regulation of reporting has also been abused by governments who use it to
control NGOs they consider subversive (Ebrahim, 2003). As discussed above, donors usually
require performance assessments but while providing an accountability mechanism they also
“focus attention on projects or programs, while overlooking the NGO …itself” (Ebrahim,
2003, p.817). Participation with the community is emphasised by NGOs (Leat, 1988) and is
an important means of accountability they employ (Cronin & O' Regan, 2002a). This can
include “public meetings…, surveys, or a formal dialogue on project options” or actual
involvement of community members in the project (Ebrahim, 2003, p.818). Finally, self
regulation, as described by Ebrahim (2003), is the efforts by NGOs to develop their own
standards or codes of conduct. A number of such codes or charters have been developed over
the last ten years and include work by the International Red Cross, the Red Crescent
Movement and the HAP project discussed earlier (Ebrahim, 2003). “The more standards of
governance, management, and financial controls are developed internally, the less need there
is for external regulation” (Fries, 2003, p.236).

11
Thus, NGOs can demonstrate that a variety of accountability mechanisms are in place to
ensure they are responsible for the actions they undertake. Their actions and activities
themselves, often being highly visible to society with increased public access to information
via the internet and press, mean that being unaccountable is not really an option, particularly
for smaller organisations. This, combined with the fact that most calls for accountability
come from those who have been targeted by NGO actions (Burton, 2003; D'Cruz, 2003;
Maitland, 2003; Upadhyay, 2003), suggests that before making blanket calls for increased
accountability of NGOs, we need to consider in more detail, who it is we wish to make more
accountable, and what sort of account we require.

CONCLUSIONS

The call made in this special issue of Accounting, Auditing and Accountability Journal may
be somewhat belated. Similar calls were made over ten years ago when The Economist
(1994) ran a special issue on the lack of accountability of NGOs. These and similar claims
resulted in NGOs responding in the early 1990s when they “came together to try and put their
house in order”, producing their own charters and codes, and embracing the need to be more
accountable (Slim, 2002, p.3). Since this time there has been an increase in attempts by
NGOs to assess their own performance (Fowler, 1996).

It may also be a particularly Western view that there is hypocrisy in asking for corporations to
be more accountable without corresponding requirements on NGOs. In a Western context
this may be (arguably) an appropriate response, but the majority of the growth in NGOs is in
places such as Nepal, Bolivia, Tunisia and South Asia. In these countries, NGOs provide
services that governments lack the resources to provide. More importantly, they have become
“the preferred channel for service provision, in deliberate substitution for the state” (Edwards
& Hulme, 1996b, p.2, emphasis in original).

The major flaw in the argument for the need for greater NGO accountability is that the
argument is presented from a mainly functionalist perspective (Ginsburg, 1998). When
considered from a conflict theory paradigm it is clear that NGOs play a vital role in civil
society, providing a voice for those unable to speak for themselves, and often providing the
voice of dissent in countering the views of more powerful groups (Ginsburg, 1998; Edwards,
2003). Requiring NGOs to be accountable, in terms of the corporate accountability model,
thus results in a contradiction that is difficult to resolve. Brown and Moore (2001, p.585)
state that there “is no single accountability structure that is right for all organizations”. The
needs of a transparent and standardised reporting and accounting mechanism for large scale
service delivery, conflict with the requirements of providing the services and voice to those in
need. Edwards and Hulme (1996b, p.6) describe the need for “standardized delivery
mechanisms, … structures that can handle large amounts of external funding, and systems for
speedy – and often hierarchical – decision making” but emphasise that “effective performance
as an agent of democratization rests on organizational independence, closeness to the poor,
representative structures, and a willingness to spend large amounts of time in consciousness-
raising and dialogue”.

There is also the political dilemma faced by NGOs, given their goal of giving voice to those
less powerful. Transparency of their actions and performance can only make it easier for
vested interests to identify and therefore oppose what they are doing. At worst, it could lead

12
to “the deregistration and closure of the organization for being subversive” (Edwards &
Hulme, 1996b, p.11).

Thus, when considering the role NGOs play, it would appear that in asking how we make
them accountable, we might be asking the wrong question. Before we ask for increased
accountability, we must first sort out the complex issues of diversity, power imbalance, size,
scale and purpose of NGOs. In addition, the question of how accountable the NGO sector
should be must be addressed, particularly how we “combine innovation, diversity,
experimentation and …control with the protection of the people and public money” (Leat,
1988, p.88).

Moreover, should we not also consider some type of formal recognition for NGOs in
international decision making? Such recognition although involving some loss of
independence, would result in them becoming more accountable as they would have to
subscribe to the decision making bodies’ codes and regulations (Spiro, 1995). Then the
challenge is to change the emphasis of current calls for accountability from short-term,
tangible outputs, which “encourages the formation of relationships with highly imbalanced
accountabilities” where some stakeholders can abuse their power, to longer-term responses
that address issues of social and political change (Ebrahim, 2003, p.826).

In conclusion, as indicated at the outset, this paper does not suggest that NGOs should not be
accountable. It does suggest that the case may have been overstated, and that the focus of the
research undertaken to date is too narrow, as “the heterogeneity of global civil society, (and
NGOs) works against enforced unity” (Keane, 2003, p.15). Rather than seeking a
standardised ‘corporation-style’ model of accountability that simply sets targets and outputs
(Edwards & Hulme, 1998) we would be better served by investigating the development of a
‘constitution-style’ model for democratic civil society that incorporates “wider issues of
representation, roles, legitimacy, sanctions, organic mechanisms for determining
membership… and means to proceed in the face of fundamental disagreement” (Kingsbury,
2002, p.194). The “mercantile tradition of accountability long has its roots in western
capitalism but has now been challenged by progressive business people, NGOs and others
who demand that corporate accountability become deeper and broader”. These views are
reflected in the recent progress of the development of SEA for business, and such challenges
apply equally to the not-for-profit sector (Slim, 2002, p. 2).

While there has been much written about the ‘problem’ of NGO accountability, and the
difficulties faced such as “the lack of obvious means for holding …civil society accountable”,
such claims are “easily and frequently exaggerated” (Florini, 2000, p.234). As outlined in this
paper, NGOs already hold each other accountable and respond to criticisms from corporations
and other agencies. Importantly, NGOs add “an essential layer of checks and balances into
the international system, …(helping) to ensure that excluded views are heard” (Edwards,
2003, p.2). Further still, NGOs are now called upon “to do more with less, to act as catalysts
for rapid change, and to foster sustained improvement in intransigent problems of sustainable
development, economic justice, and political democratization around the world” (Brown &
Moore, 2001, p.586). We should not forget that it is still the case that the “balance of power
…favours governments and corporations, whose resources will always vastly outweigh those
available to the advocacy element of the third sector” (Florini, 2000, p.235).

13
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