Lesson 5: Ensuring Accountability Reflections

(1) To whom are non-profits accountable?

Accountability can be defined as “the processes through which an organization makes a commitment to respond to and balance the needs of stakeholders in its decision making processes and activities, and delivers against this commitment.” Accountability centers upon relationships and trust. Non-profit organizations are accountable to their funders, donors, governments, clients, and internally to themselves and their missions. There are three types of accountability for non-profits: upward, downward, and horizontal. Upward accountability refers to a non-profits relationship with their donors and foundations and is primarily focused on funding. Downward accountability refers to a non-profits relationship with particular groups receiving services and the impact each program has on the community. Ultimately though, a non-profit is accountable internally. Horizontal accountability refers to a non-profits responsibility to its mission, staff, and carrying out its goals and programs successfully. Accountability varies by organization type, such as a service-delivery non-profit, policy advocacy non-profit, or a membership organization and with these types come differentials in which they are accountable to.

Accountability varies among relationships, organizations, and the stakeholders. Accountability is all about being answerable to those who have invested their trust, faith, and money the organization. Non-profits must be accountable to multiple stakeholders. Accountability is about trust, power, and influence. As accountability is so broad, non-profit organizations are accountable for different things by different people. This accountability can be broken down into four categories: mission (core of non-profit activity), governance (role of the board of directors), finances (accounting), and performance (what the non-profit can deliver). Without accountability standards in place, a non-profit organization risks losing the trust of donors, volunteers, and other key stakeholders.

Nonprofits count on donations and government funding to carry out critical services in communities in relation to their mission being successful. As a result, every non-profit organization needs to have a governance structure and strict financial controls in place in order to assure their stakeholders that every dollar invested in their organization is properly allocated and used. Non-profits should have great technology on hand to help them to be accountable and to communicate regularly with donors about how their donations are being used to carry out the non-profit mission. In the long run, internal and external controls must be in place to provide accountability for all transactions and decisions made by the non-profit organization. A non-profit organization must authorize, record, and report all transactions and processes and be able to adapt to the changing environments. To uphold a mission, non-profits must ensure accountability and transparency throughout the organization.