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Building the Knowledge Base of Nonprofit Management:
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Accountability of Nonprofit Organizations and Those Who Control Them: The Legal Framework
Abstract
Legal accountability, understood as either an obligation to meet prescribed standards of behavior or an obligation to dis¬close information about ones actions even in the absence of a prescribed standard of behavior, is imposed on nonprofit organizations and those who manage them by state law and
by federal tax-exemption law. A perception that charities are exempt from both the electoral control that holds government accountable and the market forces that discipline business en¬courages a tendency to look to law to ensure accountability in the charitable sector, to perceive that shortcomings in the law are responsible for shortcomings in the sector, and to conclude that repair or reconstruction of the legal framework is the appropriate corrective. However, although the legal frame¬work is far from perfect, sweeping change will not likely solve the problems and may well undermine the most positive char¬acteristics of the sector. Some aspects of accountability cannot and should not be the subject of legal rules. Efforts to make charities accountable by redrawing legal standards of behav¬ior in accord with popularly recognized standards of propriety, or even "excellence," are likely to be counterproductive. Instead, adjustment of the legal framework in the hope of improving accountability should be incremental and should be evaluated in the context of organizing principles and core values that reflect our best understanding of the unique strengths of the sector and the functions it serves in our society.
Journal
(1995)
vol6
no2
pages141
Categories
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Public Policy, Law, and Ethics
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Law and Taxes
