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Document Information:
- Year: 2006
- Country: Philippines
- Language: English
- Document Type: Publication
- Topic: CSO Accountability and Transparency
The Evolution of NGO Accountability Practices and their
Implications on Philippine NGOs
A literature review and options paper for the Phili ppine Council for NGO
Certification
By: Danilo A. Songco
Introduction Philippine NGOs have been at the cutting edge of NGO self-regulation. The
Caucus of Development NGO Networks (CODE-NGO), the big gest coalition of NGOs in
the Philippines, established a Code of Conduct for Development NGOs in 1991. It was
the first to establish a Code of Conduct among NGOs in Asia (Sidel, 2003) and probably
one of the first in the global NGO community. CODE- NGO’s Code of Conduct has since
been signed by over a thousand NGOs and was recently updated to provide for clearer
enforcement mechanisms. In 1998, the Philippine Co uncil for NGO Certification
(PCNC) was established by 7 of the biggest NGO coalit ions. It is one of the very few
government recognized NGO certification system in th e world and has been the subject
of discussion and possible replication by NGOs in di fferent countries. Both initiatives
are repeatedly cited as models and analyzed in many of the documents that were
reviewed for this paper.
Today, however, after 8 years of existence, PCNC has certified only 1,000 NGOs-
–nowhere near its potential market of 6,000 NGOs w hen it was established.
1 While there
are a number of factors that could have contributed to this less than expected
performance, the challenge to PCNC (as well as the e ntire NGO community in the
Philippines) is how to take NGO accountability throu gh self-regulation to the next level.
This is an overwhelming challenge at a time when Ph ilippine NGOs are facing a serious
crisis of sustainability and relevance. This crisis in the Philippines has strong parallelism
to the global NGO situation.
The global discourse on NGO accountability is creati ng a wealth of literature.
Many of them shed light on the issues at hand. Oth ers simply add more fuel to heat up
the debate. This review does not intend to cover t he entire scope of such literature
because the sheer volume makes it nearly impossible to do so. Instead, this review
attempts to build upon more current papers and summ ative documents that already
synthesize learning from a large collection of writ ings. This paper is prepared primarily
for the members and leadership of PCNC in its effort to make NGO self-regulation more
effective NGO in the Philippines. More specifically , the objectives of this review are: (1)
1 There were 6,000 NGOs with donee institution statu s in the Bureau of Internal Revenue (BIR) in 1998.
Part of PCNC’s Memorandum of Agreement with the Phi lippine government when it was established is
that henceforth all NGOs will be required to obtain certification from PCNC before they are granted do nee
institution status. All those with such status wer e given 3 years to obtain such certification or the ir status
will be considered expired.
The Evolution of NGO Accountability Practices and their Implications on Philippine NGOs
Page 2 of 39
to appreciate the breadth of discourse on NGO accoun tability and, (2) to identify different
approaches that would be useful to PCNC’s efforts to increase accountability of
Philippine NGOs. By strengthening its accountabilit y practices, PCNC hopes to
contribute to reviving the vigor and dynamism of th e Philippine NGO community.
The Global NGO Explosion and the Rise of the “Accou ntability Industry”
The favorite introduction of many documents review ed for this paper is an
account of how the NGO sector experienced tremendous growth both locally and globally
in the last two decades.
2 Salamon (2003) describes the rise of civil societ y as a “veritable
global associational revolution” — a
phenomenon which he compares to the rise of the
nation-state in the nineteenth and twentieth centur y (ibid, p 6-7).
The power of NGOs is further exemplified not just by their increasing number but
by their ability to network and mobilize their memb ers to affect global politics
(Commonwealth Business Council, 2003) . Such power was demonstrated in various U.N.
conferences, international summits and multilateral meetings where NGOs have been
effective in influencing policy agendas, official s tatements and joint resolutions.
One of the factors that contributed to this global “explosion” of NGOs (or “civil
society boom”, as SustainAbility, 2003 calls it) is the shape and form that they have
taken. NGOs and civil society organizations have be en called different names.
Although
the monikers civil society organizations (CSOs) and NGOs have become
interchangeable, the distinction between the two ha s become evident. Civil society is the
greater sphere that Salamon describes as the organi zations that occupy the space between
the state and the market and NGOs are only one the m any types of organizations in civil
society.
Edwards (2000, in SustainAbility, 2003) says: “ If civil society were an iceberg,
then NGOs would be among the more noticeable of the peaks above the waterline,
leaving the great bulk of community groups, informa l associations, political parties and
social networks sitting silently (but not passively ) below.”
Interestingly, the
Commonwealth Business Council calls NGOs as the operational arm of civil society.
SustainAbility refers to activist NGOs are the shock troops of civil society. The
discussion in this paper will focus mainly on non-g overnmental organizations, or those
that primarily provide public goods or work for the public interest and receive funds
mostly from donor and philanthropic sources. It i s also important to make a distinction
between NGOs and membership-based, grassroots organi zations (that are often the
2 See for instance Salamon, L., W. Sokolowski and R. List, “Global Civ il Society, An Overview”, The Johns
Hopkins University, Baltimore, Maryland. 2003; Lloyd, R. “The Role of NGO Self-Regulation in
Increasing Stakeholder Accountability” , One World Trust. July 2005; Edwards, M. and D. Hulme, “Too
Close For Comfort? The Impact of Official Aid on No ngovernmental Organizations,” in World
Development, Volume 24. U. K. 1996.; Independent Sector, “The New Nonprofit Almanac In B rief, Facts
and Figures an the Independent Sector” , 2001.; and
The Evolution of NGO Accountability Practices and their Implications on Philippine NGOs
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beneficiary of assistance of NGOs) referred to alter nately as grassroots organization
(GROs), community-based organizations (CBOs), or mo re popularly in the Philippines as
people’s organizations (POs). As will be discussed later in the paper, while these two
types of civil society organizations are usually in terdependent, there are also conflicts
that arise between them.
Part of the mystique of this growing prominence of NGOs is the fact that while
they continue to grow in number and their role expands, it becomes more and more
difficult to describe them and put them in boxes. McGann and Johnstone (2006) are
concerned that the confusion that attends the typology and the real number of NGOs is
contributing to their mystique if not misunderstanding.
As the power of NGOs continue to increase, both in t he domestic and
international fronts, their operations became more sophisticated and their roles more
complex. Some NGOs have become as large as medium-s ized corporations
(Commonwealth Business Council, ibid). Some (like those in Bangladesh and Sri Lanka)
employ more staff than governments. Some provide s ervices in direct competition with
private companies (ibid), government agencies and l ocal authorities. As their voice grew
louder in pointing out the economic and political i nequities created by governments,
private corporations and multilateral financial ins titutions so did the calls for their
legitimacy and accountability increase. Many of th e issues involved in the governance
debate within the private sector, for instance in r egard to conflicts of interest, are also
relevant to NGOs (Commonwealth Business Council, ibi d).
SustainAbility quotes Mike Moore, former Director General of the World Trade
Organization (WTO) as calling
for ‘new rules of engagement’ between civil society ,
international institutions and governments. Jeffre y E. Garten, Dean of the Yale School of
Management (in SustainAbility 2003, :7) agrees: “ NGOs have had too much of a free
ride in identifying themselves with the public inte rest. They have acquired the high
ground of public opinion without being subjected to the same public scrutiny given to
corporations and governments … [I]t is time that co mpanies and governments demand
more public examination of NGOs .”
NGOs became victims of their own success.
Dimensions of accountability
There are three dimensions of the accountability i ssue that have been raised
against NGOs: transparency, legitimacy and performance . The question of transparency
came at a time when massive flows of public and pri vate funds are known to be flowing
towards this sector, sometimes in competition with funds that were traditionally going
directly to government. For example, Edwards and H ulme recorded in 1998 that total aid
from Organization for Economic Cooperation and Deve lopment (OECD) member
countries channeled through NGOs rose from 0.7 perce nt in 1975 to 3.6 percent in 1985,
and at least 5 percent in 1993-94
— some US$2.3 billion in absolute terms .
At the same time, Jordan (2003) relates how journa lists have made an issue of an
NGO CEO who gets paid more than the Prime Minister o f Netherlands and about an
The Evolution of NGO Accountability Practices and their Implications on Philippine NGOs
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alleged trading of relief supplies in exchange for sexual favors in Africa. SustainAbility
points to a series of articles published by The Washington Post which exposes alleged
mismanagement of resources in The Nature Conservancy , one of the oldest environment
groups in the U.S whose history dates back to 1915.
3 Grant (1998) and Bothwell (2004)
write about the huge 1992 scandal about Bill Aramon y, CEO of United Way America,
who was discovered to be using large amounts of don ations for his personal pleasures.
The global terrorism scare is contributing to the t ransparency question as some quarters
accuse some NGOs of being used as fronts to channel funds for terrorist organizations
(Jordan, ibid). Commonwealth Business Council (200 3) and Constantino-David (1997)
warn of unscrupulous, enterprising parties setting up their own NGOs to take advantage
of the thriving industry. SustainAbility (ibid :7) quotes Jonathon Porritt, former head of
the Friends of the Earth UK, as saying that “ NGOs are beginning to recognize that all the
things that we have been telling companies to do, i n terms of ethical standards of
behavior, also need to apply to the NGOs themselves …”. In reality, the multitude of
NGOs that have mushroomed in the last two decades is dominated by small NGOs
operating in limited areas with one or two projects that neither have the consciousness
nor the resources to institute accountability measu res.
The transformation of NGO work from service provis ion to advocacy unleashed
their real power in social discourse in the global arena. What has attracted the greatest
controversy about NGOs, and which has brought about the question of their legitimacy, is
their claim to be “the voice of the people”, or alt ernately “the voice of the poor” — an
affront to governments who NGOs claim to have betray ed public trust. In retaliation,
elected and appointed public officials (joined by c orporate CEOs who claim
accountability to their shareholders) have asked: w ho appointed NGOs to speak “for the
people” and who determines whether their views are upheld by the public which they
purport to represent? Edwards (2003) cites four wa ys by which such claim may be
validated: “through representation (if NGOs have a formal memb ership that can hold
leaders accountable for the positions they take), t hrough competence and expertise (if
NGOs are recognized as bringing valuable knowledge and skills to the table by other
legitimate bodies), through the law (if NGOs comply with non-profit legislation,
regulation, and effective oversight by their truste es), and through the moral claims of
NGOs to promote the public interest, or at least be in sympathy with large segments of
public opinion.”
Slim (2002: 6) frames the NGO legitimacy controversy by challenging NGOs to
declare whether: they speak as the poor ( as NGOs, CBOs/POs made up of poor people or
the victims of human rights violations) , with the poor (if the NGO is working very closely
with such people and speak with their consent) , for the poor (if the poor and the
oppressed are effectively unable to speak out and a re somehow ‘voiceless’) or simply
about the poor.
Both Edwards and Slim agree about the need for leg al mandates (government
registration, etc.) as an essential element of NGO legitimacy. Slim, however, adds that
3 See David Ottaway and Joe Stephens, ‘Nonprofit Land Bank Amasses Billions’, Washington Post, 4 May
2003 (footnote 131 in SustainAbility …).
The Evolution of NGO Accountability Practices and their Implications on Philippine NGOs
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NGOs’ legitimacy may either be “derived” from the ma ndate of their members, if they
are membership-based organizations, or from the sup port that they get from the public,
particularly if they raise funds from private citiz ens. He cites U.K. NGOs that get large
amounts of public financial and voluntary time cont ribution as a clear manifestation of
public support. In the U.S., Independent Sector re ports that charitable giving has reached
an all time high of $248.5 billion in 2004. In the same breath, Slim also warns that
transparency in the utilization of publicly contrib uted resources as well as the consistency
of their action with their publicly declared missio n are essential in maintaining such
support.
Edwards (2003) distinguishes between representativ e democracy and
participatory democracy in defense of the legitimac y of NGO advocacy. In effect, he is
saying that NGOs are performing their legitimate rig hts as citizens when they ask their
government (who are made up of officials who are el ected/appointed to represent their
interest) to be accountable. SustainAbility explai ns that
“NGOs act as a ‘distributed’ or
‘delegated’ conscience for society, with individual citizens ‘sub-contracting’ parts of
their ‘citizenship’ (e.g. concern for human rights) to NGOs” when they perform their
advocacy work.
Slim agrees but cautions against the hazard of clai ming such moral
authority. Apart from the danger of co-opting the voice of those who they claim to
represent (as cited above), NGOs also need to be car eful about the veracity or accuracy of
the arguments which they make.
The Commonwealth Business Council (2003) reminds that the decline in the
credibility of governments is brought about by thei r abuse of public confidence (by way
of corruption and abuse of authority) and that of p rivate companies because of their abuse
of shareholders’ and consumers’ confidence (through manipulation of financial records
and sub-standard and/or unethical products). NGOs c ould be just as guilty of betrayal of
public trust when they issue public statements that undermine the integrity of public
institutions and private companies without checking their facts or without rigorous
research and analysis. Thus, it is equally importa nt for NGOs to publicly declare the
source of their funds in order to ensure that they are not being used by private interest in
promoting the causes that they advance (Commonwealt h Business Council, ibid).
Resonating with Edwards, Miklos Marschall (2002), Executive Director of
Transparency International for East and Central Eur ope, provides a useful conclusion to
this question of NGO legitimacy and accountability: “It is important to understand that civil society is complementary, not a rival, to
representative democracy, and participatory democra cy goes hand in hand with
representative democracy. Civil society is about pa rticipation, while
parliamentary democracy is about representation. Th e civic politics of citizen
participation and the parliamentary “party politics ” of representation have a
healthy dynamic of both complementarity and tension . Citizen participation
carries its own self-originated legitimacy; it does not need to borrow legitimacy
from representation. … It is what it does, and not representation, that makes an
The Evolution of NGO Accountability Practices and their Implications on Philippine NGOs
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NGO legitimate. NGOs and their networks are legitim ized by the validity of their
ideas, by the values they promote, and by the issue s they care about.” 4
Finally, the question of performance has to do wit h the quality versus the quantity
of NGO services (Jordan, 2003). Since they question the performance of governments
for the way they spend public funds, NGOs are also a sked to show that they have done
better with the money that they received. Avina ( 1993, quoted in Edwards, 1998) makes
a distinction between short-term functional accountability (accounting for resources,
resource use and immediate impacts) and strategic accountability (accounting for the
impacts that an NGO’s actions have on the actions o f other organizations and the wider
environment) .
While scandals (like those cited above) are few an d far between,
compared to those that occur in government and in p rivate corporations, they have
become occasion to question NGOs’ integrity since no t a few NGOs have been negligent
in measuring their performance.
In “Too Close for Comfort”, Edwards and Hulme (199 8: 9-10) reveal that there is
as much argument in favor and as there is against t he effectiveness of NGOs in service
provision. They posit that NGOs need to build inte rnal evaluation mechanisms in their
operations and use such mechanisms to improve their performance in order for them to
stay credible. Jordan (2003) argues that although performance questions against NGOs
are legitimate, they are also a product of politica l reprisals of governments and
corporations who may have been on the receiving end of NGO advocacy.
Slim links performance and legitimacy by saying th at NGOs can show their real
value by demonstrating that they do not only know w hat of they speak when they
advocate but by showing results of the change that they create in addressing these very
issues on the ground. He adds: “[P]roven good performance can transform an NGO
from being a morally good idea to being a very prac tical moral pursuit. The fact that it
works in practice makes it a more legitimate enterp rise.”
One of the most recent efforts to develop a framework of a ccountability is the
Global Accountability Project (GAP) of One World Tr ust. GAP adds a fourth element of
accountability which is complaint and grievance mechanisms which are “mechanisms
through which an organization enables stakeholders to address complaints against its
decisions and actions, and through which it ensures that these complaints are properly
reviewed and acted upon” (Blagescu, Casas and Lloyd, 2005). This is an imp ortant
means of last resort for stakeholders to hold an or ganization accountable to its goals and
objectives (ibid). This element is further discuss ed in the section on Efforts at
Enforcement in the latter part of this paper.
4 Marschall, Miklos. “Legitimacy and Effectiveness: Civil Society Organi zations Role in Good
Governance), November, 2002.
https://www.globalpolicy.org/ngos/credib/2003/0529le git.htm
The Evolution of NGO Accountability Practices and their Implications on Philippine NGOs
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Accountability for what, to whom and how
The new era of good governance that pervades all t ypes of institutions (from
government to business to non-profit) is a product of NGO advocacy. In “Overview of
Accountability Initiatives”, Dombrowski (2006) revi ews a vast list of accountability
mechanisms that have been instituted by NGOs, corpor ations and international
multilateral institutions. Lloyd (citing OECD 2000 ) notes that OECD recorded 246
voluntary codes of conduct for business. In “Codes of Conduct for Partnership and
Governance: Texts and Commentaries”, Kunigi and Sch weitz (1999) have compiled a
rich collection of NGO codes, national laws, busines s sector codes and principles, U.N.
resolutions and statements, codes for specialized a ctivities and global framework
documents that foster accountability for different purposes among its signatories. Sidel
(2003) reviews a host of self-regulation schemes in 17 countries in Asia in “Trends in
Nonprofit Self-regulation in the Asia Pacific Regio n: Initial data on initiatives,
experiments and models in seventeen countries”.
U.N. resolutions signed by member governments on ma intaining environmental
integrity, ensuring the rights of women, achieving inclusive social development, among
others, and most recently the Millennium Developmen t Goals, are excellent examples of
how NGOs have succeeded in pressing governments to t ie their performance against their
public commitment to achieve measurable poverty red uction targets. Unfortunately, the
advocates themselves have been slow to practice wha t they preach. A survey of 600
NGOs worldwide by a team of researchers at Universit y of Warwick revealed evidence
that many had suspected all along. Most NGO respond ents to the survey gave no thought
to the issue of their own accountability (Scholte, 2003 quoted in Jordan, 2005). Among
the reasons they cited were: it’s too expensive, th e real accountability problem is with
governments/private sector and they do not see the relationship of this to their mission
(ibid, p.12).
So, why is accountability important to NGOs? First and foremost, as has already
been previously discussed, is the matter of public trust. The Independent Sector points
out that “[P]ublic trust is the single most important asset of the nonprofit and
philanthropic community” . SustainAbility highlights how
public opinion research has
consistently shown NGOs to be enjoying high levels o f trust (some popular international
NGOs have higher trust ratings than some global comp anies), and that both governments
and companies have had no option but to take notice (p.37). However, p
ublic trust in
NGOs is neither tenured (like the fixed term of elec ted officials) nor permanent.
Marschall (2002) admits that it takes many years fo r NGOs to build up a good reputation
and only one bad move to lose it. This is echoed b y Dombrowski (2006) who warns that
the damage of one misdeed may impact across the NGO sector.
Thus, NGOs need to
exercise the responsibility of being fiduciaries of public trust. The imperative of such
responsibility is that NGOs must practice the same if not higher levels of accountability
than what they demand of governments and corporatio ns in order to continue to enjoy the
confidence that they currently hold from the public .
The Evolution of NGO Accountability Practices and their Implications on Philippine NGOs
Page 8 of 39
Anent to the matter of public trust, civil society remains to be an important
element of democracy. Johns (2000) posits that it is civil society and not the state that
“ supplies grounding of citizenship and is hence cruc ial to sustaining an open public
space ”. As such, civil society needs to be as, if not m ore, credible than government in
order to keep the wheels of democracy turning. McG ann and Johnstone (2006) are
therefore concerned about how NGOs are becoming “coo pted” by certain institutions like
the World Bank which has given them an increasing r ole in bank decision-making in
response to their criticism. They warn of NGOs beco ming a new special interest group
rather than articulators of citizens’ concerns.
Secondly, there is already a palpable decline in g lobal funding for and signs of
decreasing trust in NGOs. Net Official Development Assistance (ODA) from major
donor countries—the major source of NGO funding— fell by 14% from 1992-95 and
continued to decline until 2000 (CODE-NGO, 2000; Thi ndwa; NGO Position Paper,
UNCSD). The global NGO boom is contrasted by a globa l funding slump.
SustainAbility quotes Chris Rose, former senior official of Friends of the Earth, World
Wildlife Fund and Greenpeace, expressing concern th at the ‘golden era’ of NGOs is
ending and suspecting that there is a real risk of a major downturn in the prospects for
advocacy NGOs. Kumi Naidoo, Secretary-General of Civ icus, warns of competitive
pressure intensifying even among the largest global NGOs because of declining funds
and more demanding beneficiaries and donors—his w ord of advice to NGOs: “perform or
perish” (ibid). There are now
warnings against the possibility of an “Enron effec t” on
NGOs which could lead to even tougher
accounting rules for NGOs, squeezing their
capacity to leverage funds (SustainAbility: 48)
.
In terms of who they are accountable to, the situation of NGOs is quite complex
(Lloyd and Casas, 2006)
. NGOs are said to have “downward accountability” to t heir
partners, beneficiaries, staff and supporters; and “upward accountability” to their trustees,
donors and host governments (Edwards and Hulme, 199 8; Ebrahim, 2003 quoted in
Jordan, 2003). Lloyd (2005) adds that NGOs
are inwardly accountable to themselves for
their organizational mission, values and staff and horizontally accountable to their peers.
Membership organizations (like grassroots, people’s , or community-based organizations)
are of course “laterally” accountable to their memb ers. Lloyd (ibid) prefers this
stakeholder model of accountability which promotes accountability to all those that are
affected by an organizations policies. Jordan (ibi d) echoes Edwards and Hulme on NGOs
being subject to multiple accountability and warn o f the danger of having to
“overaccount” (because of multiple demands) or “und eraccount,” as each overseeing
authority assumes that another authority is taking a close look at actions and results.
Edwards and Hulme warn of the danger that NGOs will focus accountability towards
their most powerful constituency—referring to the ir donors. Effectively balancing
among and responding to the needs of different stak eholders is the essence of NGO
accountability (Lloyd and Casas, ibid).
In addressing the reality of NGOs of having multipl e stakeholders, Slim suggests
that they need to, first and foremost, define who t heir stakeholders are for each of the
their program and how they will account to such sta keholders in the process. Like
Edwards and Hulme, he recognizes that the level of accountability may not be the same
The Evolution of NGO Accountability Practices and their Implications on Philippine NGOs
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for all stakeholders, therefore the need to identif y primary and secondary stakeholders in
every case. Lloyd (quoting Young, 2000) believes t hat this concept of accountability
changes its nature of being a disciplinary mechanis m to that of a transformative power.
He adds: “[A]n NGO that is accountable to multiple stakehold ers not only ensures that
decisions are effective in meeting the needs of tho se interests, but also forces decision to
be made in a more equitable and fairer manner.”
Of all these, downward accountability to beneficia ries is the most important
because they are the reason why most NGOs exist (Llo yd and Casas, 2006), they lack the
power to make demands on NGOs who usually claim to s peak in their behalf (Lloyd) and
they tend to be the most vulnerable sectors in soci ety who do not have very many options
and opportunities to speak (Neligan, 2003). Thus, a ccountability to beneficiaries is
crucial to both fulfilling an organization’s missio n and maintaining its legitimacy (Lloyd
and Casas, ibid.). In similar vein, Southern NGOs c omplain of a lack of accountability
and the “new imperialism” of Northern NGOs who they claim are co-opting their agenda
in the international arena and/or of non-disclosure of funds raised in their behalf (Lloyd,
2005; Commonwealth Business Council, 2003; Fowler, et al quoted in Slim, 2002) — a
concern that has also been raised by POs against NGO s in the Philippines.
Slim (2002: 12) defines NGO accountability as : “the process by which an NGO
holds itself openly responsible for what it believe s, what it does and what it does not do in
a way which shows it involving all concerned partie s and actively responding to what it
learns.” Jordan believes that accountability is the basic p rinciple of responsible practice
for any institution, be they public, private or NGO. Edwards and Hulme (1998: 15)
define accountability as having the following featu res:
a statement of goals (whether in adherence to certa in rules or achievement of
identified performance levels),
transparency of decision making and relationships,
honest reporting of what resources have been used a nd what has been
achieved,
an appraisal process for the overseeing of authorit y(ies) to judge whether
results are satisfactory, and
concrete mechanisms for holding to account (i.e. re warding or penalizing)
those responsible for performance.
(See also Annex B – The Independent Sector Checkli st for Accountability)
Thus, accountability is no longer a matter of simp le financial accountability or
reporting to donors about funds received. Lloyd (2 005) says the traditional concept of
NGO-donor relationship following the principal-agent model is no longer applicable as
the model presupposes that only entities with forma l authority have the right to exact
accountability from their agents. Slim (2002) says the practice of Western charities of
reporting on “money raised and spent, the number of poor people reached, and the
administrative cost of raising and spending the mon ey” is over. He notes the notoriety of
some charities in using fund-raising and administra tion ratios as measures of efficiency
The Evolution of NGO Accountability Practices and their Implications on Philippine NGOs
Page 10 of 39
with little or nary any effort to accounting for th e impact of funds spent on the lives of
poor beneficiaries. Quoting Edwards and Hulme (199 5), he makes a distinction among
outputs, outcomes and impact and how these have bec ome a bane to NGOs who have
been forced by some donors to adopt corporate plann ing and management techniques in
development where determining the quality of change in people’s lives is not always as
easy as determining profits and losses.
Jordan (2003) thinks that all of these questions a re creating an “accountability
industry” . She cites the case of SGS International which ha s established an NGO 2000
Standard where it is convincing donors and governme nt to rate NGOs using these
standards as a way of determining who they will fun d. She decries the fact that many
accountability initiatives are driven by pressures from donors and governments rather
than genuine desire of NGOs to live up to the standa rds that they preach. She is
concerned that many of the accountability tools bei ng employed are not consistent with
the sensitivity of NGO development work and stifle t heir innovativeness and flexibility
(ibid,: 10-11).
Self-regulation as a strategic response
The pressure for increasing accountability is paral leled by efforts from the NGO
sector to promote accountability through self-regul ation. Shea and Sitar (2004) reviewed
the range of self-regulation efforts of NGOs in “NGO Accreditation and Certification:
The Way Forward?, An Evaluation of the Development Community’s Experience” and
found significant efforts that a variety of tools t hat have already been developed to
demonstrate NGOs’ ability to govern themselves effec tively. In addition to addressing
the questions of transparency, legitimacy and perfo rmance, as previously discussed,
Lloyd (2005) and Naidoo (2000) enumerate the reasons why self-regulation has become
necessary for NGOs. They point out that NGOs have re alized the need for promoting
greater collaboration among themselves, for pre-emp ting government regulatory
tendencies, and for the need to diversify funding s ources.
Like Naidoo, McGann and Johnstone feel that while t he strength of NGOs lies is
in their heterogeneity, their diversity is also a c ause of disorganization. Further, their
accountability to each other is among the hazy aspe cts of NGOs’ accountability to its
various stakeholders. Since the impact of single a cts of indiscretion could be damaging
to the entire sector, peer-to-peer accountability i s quite essential. Self-regulation is
becoming a way in which NGOs are establishing common norms and standards around to
whom and for what they are accountable (Lloyd and C asas) and, in the process,
settling
the various issues related to their accountability among themselves. With the Philippines
leading the way with CODE-NGO’s Code of Conduct in 1 991 (Lloyd quoting Sidel,
2003), it is estimated that there are now NGO self-r egulatory schemes in over 40
countries (Naidoo, 2004 quoted in Lloyd, 2005).
While many of the authors quoted here recognize th e value of government
The Evolution of NGO Accountability Practices and their Implications on Philippine NGOs
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regulation, there are at least two arguments about why this is inadequate and (potentially)
dangerous. Naidoo (2000) and Lloyd (2005) doubt whe ther the state has the capacity to
exercise it regulatory function over a vast and com plex range of private, voluntary
organizations. They are joined by Irish and Simon (2004) in the belief that the culture of
ethics and multistakeholder accountability cannot b e legislated. They all point out that in
some cases of self-regulatory practice, NGOs are dem onstrating that they are able to go
beyond the legal requirements and standards of inte rnal governance. Since governments
are usually the target of NGO advocacy, it is not de sirable that they exercise stringent
regulatory power over them since such power can be abused to stifle NGOs.
In terms of funds diversification, Naidoo thinks NG Os, particularly those in
developing countries, have started to explore local sources of funds. In some instances,
the patriotic sense of the diaspora has become a po tent source because of the wealth that
they have accumulated. NGOs have also started to se cure tax incentives from
governments to encourage charitable giving by the l ocal population. All these will
necessitate a system by which NGOs can demonstrate t heir integrity in order to capture
local philanthropy.
Performance standards and principles of operation encased in codes of conduct
became a popular manifestation of NGO self-regulatio n. Lloyd (2005) notes that before
codes of conduct became popular, NGOs have used sel f-assessment and peer evaluation
as ways to measure performance and determine accoun tability to their mission. He
makes an example of the Organizational Self Analysi s for NGOs (OSANGO), a product
of the Centre for Youth Social Development in India , which has recently developed
software that enables NGOs to internally analyze how efficiently and effectively they are
utilizing resources in the pursuit of their mission . Lately, Keystone has developed a set
of simple tools that help NGOs measure their perform ance and report them using a
reporting standards framework (see
https://www.keystonereporting.org/ ).
Some studies that have established a typology/cate gorization of self-regulation
approaches are: Sidel (2003, Asia-Pacific only), Ll oyd and Casas, Lee (2005) and Shea
and Sitar. Following is a summary of the different modes of self-regulation that are
currently being practiced by different organization s based on the three studies:
Standards Setting and Performance Measurement
Sectoral codes and other means to govern conduct (Sidel and Lee) involves a
group of organizations coming together in agreement over standards
governing their conduct, with each promising to abi de by the established
norms (Shea and Sitar); (see Annex A for a collection of Codes of Conduct)
Self-certification is low cost, easy to administer for both the rated and the
rating organization, and is accessible to a wide ra nge of rated organizations;
effectiveness depends on the seriousness of individ ual organizations to apply
the program (Shea and Sitar); an example of this is OSANGO and t he
Keystone method;
Peer Review is one of the more rigorous evaluation methods; ch aracterized
by independence of the raters, technical assistance in identifying and
The Evolution of NGO Accountability Practices and their Implications on Philippine NGOs
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correcting organizational weaknesses, and substanti al responsibility on the
part of rated organizations to produce evidence of compliance with each
standard; because of its rigor, it is likely to be meaningful to donors, the
public, and others relying on the certification, bu t its high cost and high
standards may place it out of reach for many small or new organizations
(Shea and Sitar); an example of this method is the practice of Philippine
Business for Social Progress (PBSP) described in th e next section;
Ratings organization evaluation functions much like a traditional “charity
watchdog” organization – it solicits information fr om the organization and
rates it according to the standards, and publishes its conclusion as to whether
an organization has met the standards, as well as a report detailing its
findings, for public consumption; depends heavily o n the credibility of the
rating agency; examples in the U.S. include BBB Wis e Giving Alliance,
Charity Navigator and the American Institute of Phi lanthropy’s ratings guide
(Shea and Sitar, Sidel, Lee).
Accreditation by an accreditation agency (accreditation, certification,
validation and licensing mechanisms ; [Sidel]) provides the most significant
assurance that an organization meets certain standa rds of quality in its
delivery of services; most expensive type of mechan ism to implement, both for
the rating and the rated organization (Shea and Sitar; Lee); the PCNC,
Pakistan Centre for Philanthropy NPO Certification P rogram, and the
Australian AID initiative are some examples of this method (ibid).
Enforcement and incentives
Award – their high public visibility draws substantial a ttention to the program
and to the standards it sets; like accreditation, o ne of the most costly to
implement (Shea and Sitar); an example of this is the Malcolm Baldrige
Award in the U.S. (ibid);
“Intranet” self-regulatory measures or precursors to self-regulation in which
domestic funding nonprofits encourage and require c ompliance with
standards by their domestic partners and/or grantee s (Sidel); examples of this
approach are the Children and Youth Foundation effo rts in the Philippines and
Child Relief and You (CRY) and Action Aid initiativ es in India (ibid);
Grievance mechanism is a system to accept public complaints against er ring
NGOs, a process of investigating allegations and in stituting sanctions if the
accusations are proven. An example of this system is the one provided for b y
Code of Conduct of Ethiopia.
Public information