Should NPOs Follow International Standards for Financial Reporting? A Multinational Study of Views

Financial reporting is an important aspect of not-for-profit organisations’ (NPOs’) accountability. Globally, numerous and varying regimes exist by which jurisdictions regulate NPO financial reporting. This article explores whether NPOs should be required or expected to follow sector-specific international financial reporting standards. We investigate stakeholder perceptions on the nature and scope of any such developed standards, interpreting our findings through the lens of moral legitimacy. Using an international online survey of stakeholders involved in NPO financial reporting, we analyse 605 responses from 179 countries. Based on our findings, we argue that diverse stakeholder groups, especially those who are involved with NPO financial reporting in developing countries, are likely to grant moral legitimacy to developed NPO international accounting standards if the consequences are to enhance NPO accounting and accountability information, subject to agreement as to whether all or only NPOs of a certain size should comply and whether any such standards should be mandatory.     

Challenges and boundaries in implementing social return on investment: An inquiry into its situational appropriateness

Nonprofit organizations (NPOs) and social enterprises are increasingly under pressure to justify their use of resources and report their impact on society. Frameworks that monetize social value such as social return on investment (SROI) have emerged as a response. The existing literature highlights many benefits and technical challenges of SROI, but largely ignores strategic and organizational learning aspects. This paper explores the use of SROI in an NPO conducting cultural heritage preservation. By analyzing the challenges managers face in agreeing on a reliable (“correct”) computation of SROI and in assessing the validity and relevance (“appropriateness”) of SROI, we seek to understand the challenges and boundaries of SROI. Challenges with a reliable computation of SROI are identifying stakeholders, the choice of proxies, the time horizons, and deadweight factors. Challenges with an appropriate SROI calculation are comparability, subjectivity, legitimacy, and resource utility. We argue that SROI calculations might not be reliable or appropriate in organizations with fuzzy purposes, broad value creation goals, broad target groups, very individual or subjective proxies, strongly lagged outcomes, complex or unobservable causality, and with lack of legitimacy among stakeholders. Organizations should not trustingly adopt SROI without being aware of these limitations.     

How to be heard on microblogs? Nonprofit organizations' follower networks and post features for information diffusion in China

This study tackles the gap in public relations research on what drives users of microblogs in China to follow nonprofit organization (NPO) accounts and share (retweet) their posts, from a multidimensional perspective of the NPO, the microblog audience, and the post features. Using a content analysis of Sina Weibo data of 95 NPO accounts, results suggested that an NPO's status on Weibo is a significant predictor of its follower number. Follower numbers and activeness directly affected the NPO's number of retweets. Informative posts and posts that fulfill multiple gratifications were found to be more sharable than other post types. In addition, a post's originality, media richness, inclusion of opinion leaders, and endorsement by influential users all contributed to its level of circulation. This knowledge is essential for NPOs to spread information and build online communities that facilitate dialogic engagement and quality organization–public relationships with their stakeholders on social media in China's context.     

Balance with logic-measuring the performance and sustainable development efforts of an NPO in rural Ethiopia

The analysis of performance of Not-for-profit organisations (NPOs) is difficult because there are several objectives and perspectives to NPO performance and accountability, especially if considered sustainably and in long term. This suggests that performance analysis and measurement of NPOs might also involve multiple perspectives, such as in Balanced Scorecard (BSC) or in the Logical Framework (LF) models.This article is a case study of analysing the sustainable development and performance of an NPO in rural Ethiopia. We propose the Logic Balanced Scorecard (LBSC) model that combines elements of BSC and LF. This proposal was preliminarily used and tested in a five-year interventionist accounting case study among eight villages in rural Ethiopia. Advances in performance measurement may help improving the socioeconomic, agricultural and nutritional situation in the area. Further, an improved analysis of performance, sustainability and accountability of NPOs may make development projects easier to plan, follow and assess.     

Managing stakeholder relationships and nonprofit organization effectiveness

This research examined how nonprofit organizations manage their relationships with stakeholders and how these practices relate to perceived organization effectiveness. We conducted semistructured, open‐ended interviews with executive directors of nonprofit organizations (NPOs) to discover whom they see as their stakeholders, the types of expectations they encounter from stakeholders, and the practices they use in managing stakeholder relationships. The two nonprofits that were evaluated as most effective used a consistent, thematic rationale in dealing with stakeholder issues: one organization discussed its actions in terms of its mission and core values, the other based its actions in terms of building relationships and networks. Our study suggests that organizations that ground their external relations in issues that are recognized as good nonprofit management, and do so consistently across stakeholder groups, will tend to be rated as more effective by multiple, external evaluators.     

Nonprofit organizations in between the nonprofit and market spheres: Shifting goals,governance and management?

In spite of the belief instilled by the New Public Management reforms that nonprofit organizations (NPOs) can benefit from more management, more measurement and more market practices, systematic knowledge on the organizational effects of NPOs incorporating business practices in their day‐to‐day functioning remains absent to date. This research note addresses this limitation by reviewing 49 research articles. The focus lies on the redefinition of nonprofits' mission and income streams, changing governance arrangements and shifting management practices. We find that, despite numerous detrimental effects cited in the literature, (a) generating commercial income can contribute to the financial stability of NPOs, and (b) hybridization towards the market domain can strengthen the organizational legitimacy of NPOs, suggesting that imitating for‐profit enterprises might contribute to nonprofit functioning in perception, rather than in practice.     

Nonprofit Comparative Research: Recent Agendas and Future Trends

Comparative research on nonprofit organizations (NPOs) has been a prominent approach for advancing our understanding of these organizations. This article identifies the primary drivers that shape the NPO comparative research agenda and explores new research trends. Based on a systematic literature review, nine definitional aspects and ten impulses are identified as drivers of NPO research. This article conducts a correspondence analysis to study the relationships between the definitional aspects and impulses that are discussed in 111 articles that were published in philanthropic and third-sector journals in the period January 2001–January 2015. Based on our results, we suggest three new clusters for future comparative research: investment and growth, participation and social impact, and social cohesion and civil society.     

The Inherently Contested Nature of Nongovernmental Accountability: The Case of HAP International

While the principled case for humanitarian accountability is relatively straightforward, the practice is demonstrably more complicated, necessitating constant negotiation among stakeholders. However, despite the wave of research into nongovernmental accountability, few empirical studies have grappled with the phenomenon’s inherently contested nature. This paper foregrounds tensions arising in the elaboration of nonprofit accountability. Its approach is informed by critical constructivist theory, an international relations approach attuned to social power, identity and exclusion, and conceptual contestation; its conclusions are supported by interview data with key stakeholders. Focusing on the Humanitarian Accountability Partnership (HAP) International, it finds that initial consensus on the desirability of beneficiary (downward) accountability quickly gave way to principled disagreements and operational difficulties. Specifically, the initiation stage of HAP was marked by two conflicts—a debate about enforcement and a turf war over control—culminating in rebranding and relocation. The implementation stage was characterized by tensions over certification and intra-organizational struggles over leadership. The contemporary practice of accountability is shown to be a contingent and contested social process, with humanitarian identity and practice ultimately at stake.

     

Volunteers for NPOs in Welfare Services in Iceland: A Diminishing Resource?

The question of declining membership of non-profit organizations (NPOs) has been central in academic discussion and research has indicated changes in the way people volunteer. Less emphasis has been on the functions of volunteers as a resource for NPOs and how changes such as increased reliance on professionals in their operations can influence the volume and type of volunteering. This paper examines the value of volunteers as a resource for Icelandic NPOs in the field of welfare services. It is based on a study of the majority of active Icelandic NPOs in the welfare field, as well as an analysis of their respective websites. The findings show that volunteer contributions do not constitute a significant part of the activities of most Icelandic NPOs in welfare services. Apart from membership of boards, volunteers seem to be used primarily as a means of supplementing other resources, such as temporary fundraising efforts. However, the level of volunteering varies according to the size and operational type of organization.     

Communicating Engagement in Corporate Social Responsibility: A Meta-Level Construal of Engagement

Organizations are increasingly seeking stakeholder support through engagement to demonstrate their corporate social responsibility (CSR) credentials. These credentials are, in turn, used to support claims of legitimacy for organizational operations. This article uses a process model of antecedents, implementation, and consequences to study the connection between engagement and CSR. CSR reports show organizations perceive engagement in CSR as both communication and activities between organizations and their stakeholders; and as a second, meta-level of communication about that engagement with stakeholders beyond those directly involved, thereby broadening the scope of organizational claims to legitimacy. Understanding what engagement is and how and why it is carried out in CSR provides a framework for understanding engagement in public relations.     

From Consultation to Participation

Empirical research in the literature on accountability of nonprofit organizations (NPOs) toward their beneficiaries is scarce, and the available studies have a number of limitations. Our study attempts to overcome some of them and focuses on one specific component of accountability toward beneficiaries: beneficiary impact on organizational decision making and output. Data were collected by surveying general managers of 790 Belgian NPOs in fourteen industries. Results show that most NPOs implement some mechanisms to involve beneficiaries and their representatives in organizational policy making, mechanisms that vary between and within industries. Despite the existence of such mechanisms, their perceived association with impact on policy making and associated potential organizational effects is weak, though positive.     

Success and Failure of Nonprofit Organizations: Theoretical Foundations,Empirical Evidence,and Future Research

Success and failure of nonprofit organizations (NPOs) have been prominent themes in the nonprofit community for more than 30 years. However, since there is no common understanding on success and failure of NPOs, the research field is still fragmented. Drawing from research on organizational success and failure in the for-profit context as a theoretical background, this paper systemizes the academic knowledge on NPO success and failure. By shedding light on theoretical approaches used, empirical evidence on the determinants of these constructs, and the sectors analyzed most frequently in this regard, the paper develops an instructive research agenda concerning studies on success and failure of NPOs.     

Financial Reporting Lags in the Non-profit Sector: An Empirical Analysis

We examine financial reporting lags among a large sample of Belgian non-profit organizations (NPOs). Doing so, we add to the literature on financial reporting and accountability in the non-profit sector. Next to drivers of the financial reporting lag that have been identified in prior studies based on private firms (e.g., delaying the disclosure of bad news), we find that the way of funding the NPO (i.e., reliance upon donations and/or grants) and its specific area of activity are significantly related to the financial reporting lag. Our results also suggest that important changes in accounting regulation significantly delay the financial reporting process. Importantly, we note that 17.2 % of the sample organizations do not file their financial statements within the legal time span.     

Who Has the Power? The Role of NPOs in Local Authorities

Recent years have seen accelerated processes of decentralization and devolution of social services from central government toward local authorities and from them to non-profit organizations (NPOs). This article describes a case study of the process of transition of power from a local authority to a NPO and the outcomes of this transition on public policy making. The findings presented in the article are based on a qualitative analysis of documents over a period of 7 years (1999–2006) in a large local authority in Israel and its relations with a NPO which provide services for the elderly.     

Advancing nonprofit organizational effectiveness research and theory: Nine theses

Drawing on the general literature on organizational effectiveness, the specialized literature on nonprofit organizational effectiveness, and recent research in the field, this article advances nine theses, or conclusions, about the effectiveness of public benefit charitable, nonprofit organizations (NPOs). NPO effectiveness is (1) always comparative, (2) multidimensional, (3) related to board effectiveness (but how is not clear), (4) related to the use of correct management practices but not in any simple “best practices” way, and (5) a social construction. Furthermore, (6) it is unlikely that there are any universally applicable best practices that can be prescribed for all NPO boards and management, (7) organizational responsiveness is a useful organizational‐level effectiveness measure, (8) distinguishing among types of NPOs is important and useful, and (9) level of analysis makes a difference in researching and understanding effectiveness. The article concludes by considering implications for organizational practice, boards and governance practices, program evaluation, including program outcomes assessment, and capacity building and capacity builders.     

Non-Profit Organizations in Mental Health: Their Roles as seen in Research

Non-profit organizations (NPO) for mental health are becoming significant actors. Here, their roles in welfare society as understood in research are identified and analyzed. Results from recent research publications on the mental health field are synthesized and categorized in order to find out their origin, theoretical orientation, and view on mental health NPO’s in relation to the public welfare systems. Relevant publications are primarily from the US, empirically oriented, and addressing surveys on both individual and organizational level. NPOs were most often seen as consensus-oriented service organizations, while very few (4%) were seen as conflict-oriented advocates (i.e., anti-professional). It is concluded that these NPOs are most often studied as complements or alternatives to existing public welfare services rather than on their own terms, and that research on the topic lacks more complex theoretical attempts.     

Resource-Based Accountability: A Case Study on Multiple Accountability Relations in an Economic Development Nonprofit

In economic development nonprofits, the disparity between the nonprofit’s, its donor’s and the poor’s expectations concerning poverty alleviation has been identified as the main reason for ineffective aid delivery. The study at hand contributes to this discussion by following this question: How do the nonprofit, its donors, the supported SMEs, and the poor refer to the nonprofit’s mission of poverty alleviation when negotiating accountability? To answer this question, the study follows the literature on accountability and resource dependency and presents results of an empirical case study on multiple accountability relations between a donor, a development aid nonprofit, its supported SMEs, and the poor living in the environment of the supported SMEs. The results show a pattern we call “resource-based accountability.” This pattern is constituted by the observation that most of the stakeholders tried to meet the expectations of the resource owners with respect to the resource owner’s understanding of successful poverty alleviation. Finally, the paper introduces a hypothesis for further studies.     

Nonprofit Organizational Effectiveness: Contrasts Between Especially Effective and Less Effective Organizations

How do key stakeholders of nonprofit organizations (NPOs) judge the effectiveness of their organization? Are the judgments of stakeholders similar, and how are board effectiveness and the use of practitioner-identified correct management procedures related to judgments of effectiveness? This study focuses on a subset of especially effective and less effective NPOs from a larger sample and finds that the especially effective have more effective boards (as judged by various stakeholder groups), have boards with higher social prestige, use more practitioner-identified correct management procedures, and use more change management strategies. Practical implications discussed include adopting more correct management procedures and change management strategies.     

The Drivers of Voluntary Transparency in Nonprofits: Professionalization and Partnerships with Firms as Determinants

This research analyzes the drivers of voluntary transparency in nonprofit organizations (NPOs). Particularly, we assess the influence of key internal and external resource providers—paid staff and business partners—on the extent to which NPOs make accessible relevant information about themselves for public scrutiny on a voluntary basis. First, we conceptualize transparency as one of the critical dimensions of accountability and explain how it has become a key issue for NPOs. Second, we discuss professionalization and business–nonprofit partnerships as business-oriented strategies directly connected to the main challenges (and controversies) NPOs face. Third, following institutional theory as core theoretical framework, we propose a set of hypotheses linking those strategies to transparency. Their influence will be measured through an empirical research based on a survey to a representative sample of 325 NPOs. Regression analysis and probit models will be used to test the hypotheses. The results confirm the positive effects of both professionalization and partnerships, although each strategy influences different dimensions of transparency.     

Social accountability as social movement outcome: Protests in a Chinese city

ABSTRACT

Social accountability is a concept that has been used much in development studies and democratic theory to study informal ways for civil society to achieve social change and hold governments accountable. Surprisingly, it has been far less used in social movement scholarship and we argue that social accountability, understood as a combination of answerability, legal claim attainment, and sanction, is a useful way to examine social movement outcomes in China. Social accountability directs the focus of research towards the target of protest and not only whether the protest resulted in policy changes or not. Based on field work in 2013–2015, this article examines four cases of social protests in the Chinese city of Hangzhou. In line with previous research we find that when citizen claims accord with government policies and protesters are well-organized, local authorities tend to accommodate the protesters’ claims. However, answerability and sanction do not always follow the same pattern. Answerability can be relatively high also when legal claims are unsuccessful. This means that cases that are commonly seen as unsuccessful protests because the legal demands were not accommodated may still result in partial social accountability. In addition to the presentation of original empirical findings, the study makes a theoretical contribution by linking the two research fields of social movement and social accountability, which will be of interest to a wider scholarly audience.