Reporting for the greater good? A systematic literature review on public-nonprofit accountability

• In Event: Accountability

Abstract

Relations between government and nonprofit organizations (NPOs) in the postwar era have undergone distinct, cumulative phases. The phase of Public Administration (PA) emphasized big bureaucratic structures and a mutual trust between government NPOs (Bode, 2006). Conversely, the New Public Management (NPM) phase has cultivated a market-oriented environment, thereby eroding the welfare partnership in favour of contractual frameworks predicated on effectiveness and efficiency (Hustinx et al., 2015). These shifts have consequently altered the public-nonprofit accountability relationship (Furneaux & Ryan, 2014), from a relation of accountability towards to process to accountability in terms of performance (Lægreid, 2014).

In the changing accountability relationship, divergent agendas surrounding accountability have emerged. Governments impose accountability mechanisms to ensure both effectiveness and efficiency. For effectiveness, the government will implement practices such as financial reporting, auditing or watchdog organizations to control spending and prevent misconduct (Bies, 2010; Gugerty et al., 2010; Phillips & Levasseur, 2004). To ensure efficiency, governments will require performance assessments and control short-term outcomes (Gibson et al., 2007; Greiling & Stotzer, 2015). NPO often perceive accountability as a necessary evil. For example, externally imposed performance systems can lead to prioritising short-term outputs over long-term outcomes, leading to mission drift (Christensen & Ebrahim, 2006; Knutsen & Brower, 2010). Another example is the risk of losing democratic legitimacy towards the community, because NPOs are more likely to comply with the funders interest (Ebrahim, 2016).

In some cases, both agendas co-exist successfully. For example, accountability when using informed rational planning, also gives the opportunity for organization learning (LeRoux & Wright, 2010; Suykens et al., 2022). Essentially, the performance information can spill over into organizational decision-making, and thus lead to more evidence-based organizational steering (Lall, 2019). Another example is the importance of goal congruence in performance contracts (Brunjes, 2023). When the government and NPOs have shared objectives both parties have a higher change to achieve the desired outcomes, are less likely terminate the contract early or have mission drift (Brunjes, 2023; Romzek & Johnston, 2002).

Despite the importance of the configuration, there is still a research gap for an overview of the organizational effects and boundary condition of public-nonprofit accountability, causing a limited understanding of all possible and most likely consequences of public-nonprofit accountability (Romero et al., 2023) . Also, only a few studies adopt a relational perspective and examine simultaneously both sides of the coin. This is important, as it underexposes the interdependence and the power dynamics between the government and NPOs (Bies, 2010). Concluding from those examples, we state that there is a dearth of insight under what boundary conditions accountability is likely to purposefully work for both the government (effective control allowing to avoid misuse of public funding) and NPOs (organizational effectiveness). To address these limitations, this study engages in a systematic literature review according to the PRISMA guidelines, and asks the following questions:
RQ1: What are the organizational effects of the public-nonprofit accountability relationship in terms of organizational effectiveness?
RQ2: What are the boundary conditions under which the public-nonprofit accountability relationship can ensure organizational effectiveness?

References

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Authors

• Aaron Van Steenlandt

• Bishoy Zaki, University Ghent

• Ben Suykens, Ghent University