Establishing Accountability For NGOs

As I conclude my three-part opinion series with my third piece, I would like to share some of my thoughts on the idea of establishing accountability for NGOs.

The first part covered the positive message in the changing landscape of philanthropy in India; the second part covered how development sector programs can succeed with effective stakeholder engagement; the third part will look at the key dimensions of establishing accountability for NGOs, given the current scenario.

When does one get the idea of starting an NGO? The spark gets ignited when they see an opportunity for citizen-led improvement in their society; the motivation is not to attract funds or showcase their contribution.

It is driven by an inherent belief about the circumstances in which people need to live in – a life of respect in a healthy surrounding in a sustainable environment. When social visionaries see that opportunity to create a positive social change, they step out of their comfort zone, get like-minded people around them and begin the journey.

As the Russian author Fyodor Dostoyevsky has aptly stated in his book, The Brothers Karamazov, “The mystery of human existence lies not in just staying alive, but in finding something to live for”. As NGOs take on an increasingly prominent role in the development of society, they get subjected to greater scrutiny and pressure to demonstrate that they are using their resources in an efficient, accountable and transparent manner.

Their legitimacy in managing aid resources is closely tied to their accountability to their donors and the public at large, their adherence to their mission, the transparency of their processes, and their effectiveness in fulfilling their mandate. Accountability has three dimensions – Transparency, Performance and Legitimacy.

All the three are of high significance to NGOs in view of their responsibilities to stakeholders including donors, sponsors, programme beneficiaries, staff, state and the public. In fact, they are considered to be of even greater importance to them than to commercial undertakings.

Transparency establishes trust amongst the people an NGO works with. It makes it easier for them to collaborate with the NGO, as they understand its work better and how it can best contribute to other efforts. Greater clarity in reporting and resource utilization enables operations to be better aligned to the goals of funders and beneficiaries equally.

NGOs have today realised that they do have a responsibility of their performance to donors and the public. It is no longer acceptable simply to reports in terms of program outputs.

They had to constantly work with an outcome focus and think long-term impact. The practice of social audit has also been actively explored by several NGOs.

Today, many NGOs adopt strategic planning and logical framework analysis that enable them to set specific objectives across their organisation and account for them.

Transparency and a focus on performance will certainly pave the way for the third dimension of accountability – legitimacy. The concept of legitimacy historically came to the fore as a reaction against NGOs who have been claiming to represent groups of people and talk on their behalf.

As NGO involvement in society grew, it became a natural extension for them to advocate or campaign on behalf of groups with whom they worked. Donors also started to question the right of NGOs to speak on behalf of others – questioning the basis from which they argued their advocacy stories.

It has therefore become imperative for NGOs to establish where their legitimacy comes from, and how transparent they are about their use of resources, decision making, and reporting of successes and failures. In 1997, the One World Trust created an NGO Charter, a code of conduct comprising commitment to accountability and transparency.

It is therefore crucial that all laws, policies, rules and regulations relating to NGOs must categorically safeguard their autonomy, while simultaneously ensuring their accountability. NGOs are critical stakeholders in the development process and have the legitimate right to operate freely in a democratic framework.

One must remember that these entities are working in a sector that not many in the organized sector are yet willing to tread. Existing laws can also be strengthened to instil more confidence in the system.

But water-tight government regulations could also lead to discouraging new NGOs to come up and instil doubts in the minds of donors about the credibility of the sector. In the new emerging paradigm in India, NGOs are seen as catalysts of policy innovation and social capital; as integrating the governmental and market institutions, playing the role of standing on behalf of the welfare of the poor and the marginalised; and as a builder of vibrant and diverse civil societies.

It is thus imperative to critically analyse the challenges faced by the sector. As the system evolves it will be highly beneficial in the Indian context to refer to global benchmarks and guidelines as mentioned above and adapt it to our local realities.

What India must do India should adopt a mechanism of systematic intervention to enable the functioning of these organisations. In a situation where the concept of philanthropy is still evolving, some hand-holding and guidance will help NGOs tread the path towards greater transparency, performance and legitimacy, and mature over time.

There could be many ways to enable greater accountability by NGOs in India. One way is to constitute a regulatory body with the apex at the national level and subsidiary operations in different states.

Another way could be to involve an entity like the Indian Institute of Corporate Affairs (IICA) that provides special focus on ethical corporate governance, corporate social responsibility, inclusive growth and sustainable development.

However, one must realize that this will take time. The structured development sector in India is still in its infancy. Like any other complex adaptive system, this space will also evolve over time as long as we are patient and open to learning.  

Rajneesh Chowdhury is Vice-President at The PRactice, a strategic public relations firm.

His work focuses on stakeholder engagement strategy, corporate reputation advisory and employee communications. He publishes widely in the field of management systems thinking and application.

Views of the author are personal and do not necessarily represent the website’s views.