Financial Accountability Relationships between Donors and Recipients in the Non-Profit Sector

John Gourdie, Waikato Institute of Technology
Judie Rees, Waikato Institute of Technology

Abstract: The issue of accountability in the non-profit sector and its subset of charitable entities is an important and emerging area of research. This paper reports on interviews held with the managers of three charitable entities operating in the Waikato area, to determine the issues and challenges facing them regarding the accountability required from their grant recipients. While accountability requirements in the sector generally differ from the requirements of a business model, the degree of difference depends on the nature of the charity. Two of these charities were Community Trusts, and the third was a gaming charity. We find that business accountability procedures are not appropriate for the charities such as Community Trusts, where relationships are close and alternative social accountability techniques exist. We find the gaming charity has additional legal requirements and an increased distance with its recipient stakeholders; a situation that requires more formal business-like accountability. The findings suggest that calls for greater accountability may not be productive and changes should consider the contextual nature of charities.