The longitudinal effect of proper governance on government-nonprofit relations

• In Event: Governance

Abstract

This research is focused on effective governance of welfare provision by analysing patterns of checks and balances, accountability and transparency. We study the case of welfare provision by the Jewish communities in Amsterdam during the 17th-19th centuries. Since each group had to take care of its own poor, the Jewish communities established their own welfare system. The dynamics of the community leadership with the Dutch government can be analysed by using the well documented regulations of Jewish self-help organisations and the Dutch legislation. This social historical case offers a unique longitudinal perspective into nonprofits-government relations.

Proper management, accountability and transparency are vital for the existence of nonprofits. It affects their reputation, legitimacy, and licence to operate [Tyler 2013, 9, 93-94; Chapman, Hornsey, Gillespie & Lockey 2023, 293; Suchman 1995, 574, 577], as well as their relationship with government [Young 2010, 47, 49-50, 52; Brinkerhoff & Brinkerhoff 2002, 9]. Longitudinal research on proper management of nonprofits can lead to a more comprehensive understanding of the complex nonprofit-government relations.

The research is done by analysing multiple archival texts in Yiddish, Hebrew and Dutch. Intra community regulations, amendments, protocols, letters and pamphlets are used alongside municipal decisions, letters and legislation. The analysis is done using qualitative methods, by coding the texts into themes and revealing patterns and phenomena.

This historical research enables us to track the internal and external long-term effects of insufficient checks and balances on the Jewish welfare system [Heydemann & Toepler 2006, 18]. The expected findings are that while individual occurrences of irregularities are negligible, systematic inappropriate management results in the collapse of a nonprofit, as it gradually loses its right to operate.

Focusing on means for ensuring proper governance, the research exposes 3 phases in the relationship between the Dutch government and Jewish nonprofits and the effect of [insufficient] checks and balances and exceptions to the rules. The findings are that systematic improper governance severely damaged Jewish welfare organisations. At the climax, both the community itself and the Dutch government had very low trust in the Jewish self-help organisations, and this impaired their legitimacy and their ability to alleviate poverty. When the Dutch Jews were emancipated [became equal citizens], the old, oligarchic, Jewish welfare system collapsed and alternative nonprofit welfare mechanisms slowly developed to support the poor. Due to negative past experiences of the government with improper management of Jewish self help organisations, the government did not rush to support the new self-help initiatives.

The theoretical contribution is improving our understanding of longitudinal patterns of nonprofit-government relations, and the importance of proper governance principles as the core source of nonprofits' right to operate. Moreover, examining internal and external effects of improper governance of nonprofits can enhance our in depth knowledge on government-nonprofit relations.
These findings are important since they can teach us on the necessary governance standards and procedures nonprofits need to adopt in order to maintain and improve their legitimacy. Such standards can in turn lead to a better relationship with stakeholders: the community and the government.

References

Brinkerhoff, J. M., & Brinkerhoff, D. W. (2002). Government–nonprofit relations in comparative perspective: evolution, themes and new directions. Public Administration and Development: The International Journal of Management Research and Practice, 22(1), 3-18.

Chapman, C. M., Hornsey, M. J., Gillespie, N., & Lockey, S. (2023). Nonprofit scandals: A systematic review and conceptual framework. Nonprofit and Voluntary Sector Quarterly, 52(1_suppl), 278S-312S.

Heydemann, S., & Toepler, S. (2006). Foundations and the challenge of legitimacy in comparative perspective. The legitimacy of philanthropic foundations: United States and European perspectives, 3-26.


Suchman, M. C. (1995). Managing legitimacy: Strategic and institutional approaches. Academy of management review, 20(3), 571-610.

Tyler, J. (2013). Transparency in philanthropy: An analysis of accountability, fallacy, and volunteerism. The Philanthropy Roundtable.

Young, D. R. (2010). Nonprofits and public policy in the United States: The evolution of accountability. Policy initiatives towards the third sector in international perspective, 45-66.

Authors

• Ronny Reshef, Rotterdam School of Management, Erasmus University Rotterdam

• Lucas Meijs, Erasmus University Rotterdam

• Bart Wallet, University of Amsterdam