The Hard Question of Accountability

Hilary Pearson

Who sets the standard for philanthropic “success”? And who is accountable to whom for that success (or lack of success)? Hard questions to answer for everyone involved in philanthropy, as givers, receivers, partners or critics. But more people are asking them now. I notice thoughtful public conversations happening about “being accountable” in the philanthropic sector.  Two recent reflections on this topic really got me thinking about the differences in the understanding of “being accountable”... by whom to who and for what?

Being accountable means taking up or accepting responsibility to oneself and others. Being accountable also means being able to control or manage what you are doing. Not necessarily the same thing. Nancy Pole has a thoughtful article in The Philanthropist Journal on measuring and accounting for “success” in the nonprofit sector. She makes the point, rightly, that accountability in the minds of funders and fund recipients has been equated with control and with risk management. This is particularly true of government funders but has also been true of private philanthropic funders. The accountability goes from fund recipients back to funders. It puts the emphasis on the control of the funds awarded, not necessarily on the purposes and uses of those funds. Evaluations focus on measurement and management of performance rather than on stories of challenges, innovations and unexpected outcomes. In this situation, there are few incentives for accountability around innovation and around impacts on community or beneficiaries, beyond specific and quantifiable results. Fund recipients have every reason to prove to funders that they can get the results wanted by the funders, and little reason to show funders that they are learning and experimenting (along with or even instead of achieving targets).

Hopefully, the accountability conversation is changing. Pole notes examples from Ontario and Quebec of initiatives that feature more flexible approaches to assessing the value of philanthropic actions. These broaden the understanding of accountability to include funders in a system that holds funders accountable to their community partners. This mutual accountability can take the form of exchange: partners sharing information about their outcomes, and funders sharing grants data and aggregated outcomes, building shared knowledge about “what works”. Foundations have a trove of information, especially if they have been around for years and have made many grants. They can use this information for accountability to others…here is what we are learning… as well as for their self-accountability…how are we doing?

The more you consider philanthropic accountability, the more you see that it is not a simple act of accounting. It is a more nuanced action of “giving account”. Funders are accountable to regulators as registered public benefit entities. As organizations they are accountable to their boards and donors. As supporters they have a moral accountability to their partners. As social change agents, they should give account of their goals and strategies to the public more broadly. And as learners, they can give account to others in, as Pole puts it, “a collective undertaking of understanding, sharing and communicating our real successes and failures”.

Accountability came up again in a podcast conversation between Senator Ratna Omidvar and Liban Abokor, one of the founders of the Foundation for Black Communities. They discuss the question of how foundations as public benefit organizations can be held more accountable for their responsibility, or “duty of care” to Canadians. Abokor suggests the need for a mechanism for philanthropic accountability mandated by government. He says that such a mechanism would measure whether foundation boards “are making the right judgments and disbursements on our capital”, arguing that tax exemptions and tax incentives to donors for gifts to foundations mean that the capital of a foundation should be considered public wealth. Abokor believes that a “useful, relevant and impactful accountability mechanism has to be introduced to Canadian philanthropy…that will ensure…that we’re always thinking about who we’re giving to and how that giving is having an impact.”  While Abokor did not have time in the conversation to elaborate on why he thinks a new mechanism is needed to mandate accountability, he is clearly impatient with the lack of urgency across the philanthropic sector to assume a broader accountability for creating public benefit.

Foundations that are registered charities report their revenues and disbursements, as well as the names of their directors, to the Canada Revenue Agency and the public. There are ways in which this mandated accountability to the public could be expanded. For example, a lively debate is happening in the nonprofit sector around ways to increase diversity on boards of charities, partly through mandated diversity data collection and disclosure, as a way to demonstrate accountability to a more diverse Canadian population. The federal government is considering recommendations for changes to the Canada Not-for-Profit Corporations Act, which might include similar disclosure requirements on diversity as currently apply to for-profit corporations in Canada. There have also been calls by the Advisory Committee on the Charitable Sector and others to increase the mandated collection of information on charity investments in the annual charity reporting form (T3010). But Abokor is going further and suggesting that a mechanism is needed to ensure that “we’re doing the things we’re supposed to”. He wants transformation, not incrementalism. 

I don’t dispute the need for more transparency, for a greater sense of urgency, for more inclusive and equitable philanthropy. The conversation about accountability must go beyond avoiding risk and managing charitable dollars prudently (even though our legal and regulatory requirements as charities push us in that direction). I am less sure that change in philanthropy can be forced top down or mandated externally. One of the great public benefits of thoughtful philanthropy is its ability to take leaps, to fund what is risky or has unknown outcomes, to provide models and learnings for social change. Government commissions aren’t known for their promotion of risk or transformational impact. Let’s agree on a broader and more inclusive accountability that encourages philanthropy to learn, to evolve, to do better, and to do so in relation with a more diverse community. 

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