A loss of credibility: patterns of wrong doing among nongovernmental organizations

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ISTR Sixth International Conference

Toronto, Canada / July 11-14, 2004

Contesting Citizenship and Civil Society in a Divided World

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A loss of credibility: patterns of wrongdoing among nongovernmental organizations
by
Margaret Gibelman
Yeshiva University, Wurzweiler School of Social Work
Coauthors: Sheldon R. Gelman

This paper reports on a study conducted of international press reports of nongovernmental human service organizations (NGOs) in which alleged or documented cases of wrongdoing were revealed. The analysis augments and builds upon a study conducted in 2000, in which the two authors, by means of content analysis, identified themes and implications arising from publicized incidents of alleged NGO wrong-doing for the time period 1998-2000. The current study updates the 2000 study for the period 2001-2003. This study is grounded in an empirical investigation of the governance and management structures which aid or impede the public image of NGOs and which point to accountability issues that affect the credibility of civil society organizations world-wide.

In the watchdog role of the press, newspapers consistently uncover and publicize "scandals" regarding the governance and accountability failures of NGOs. In their 2000 study, the authors identified a number of issues and trends in governance and management among NGOs involved in the financing of medical research or delivery of health and human services. These included failure to supervise operations, improper delegation of authority, neglect of assets, failure to ask the "right questions", lack of turnover of board members, lack of oversight of the chief executive officer (CEO), failure to institute internal controls, absence of "checks and balances" in procedures and practices, and isolation of board members from staff, programs and clients.

Given the adverse consequences for the third sector as a whole and for the affected organizations in particular, the authors hypothesized that NGOs would address with greater vigilance safeguards against potential wrongdoings and exhibit heightened sensitivity to the influence of the press in molding public opinion. We returned to the press for the time period 2001-2003 to test this assumption. In addition, interviews were conducted with a sample of board members and CEOs to gain their impressions about the organizational dynamics that allow such "misdeeds" to occur and what actions, if any, boards are taking to improve the monitoring of organizational performance and heighten internal accountability.

METHODOLOGY: Given the diversity of this third sector, comparisons are best undertaken within similar groupings. The groups selected for this analysis are those concerned with the financing and delivery of health and human services.

The media functions throughout the world as a forum of communication, with the press assuming the role of "filter" — selecting what is important for us to know and in how much detail. It is a fertile source of information to track and document stories about NGOs. For purposes of this follow-up study, the search was again limited to the print media. Two primary search engines were used to identify and obtain newspaper articles, Lexis-Nexis and ProQuest, both comprehensive data bases that include newspapers, journals, periodicals, and newsletters. The period of investigation spans 2001-2003. The search was initiated using the key words "charities and fraud" and a variety of variations (e.g., nongovernmental organizations and allegations; NGOs and fraud; charities and allegations; third sector and dishonesty, etc.) were then attempted to see if they would yield additional articles. The search yielded hundreds of articles related to NGO wrongdoings, the majority of which were outside of the purview of the human services.

The articles are analyzed by the use of qualitative content analysis, which is the method of choice for studying themes and language. Theoretical sampling was used, in which similar cases are sought and their themes mined. The two authors independently reviewed the articles and listed themes which compromised descriptive categories about the events reported — nature of the allegation, parties involved, legal status of the case, if any, immediate impact on the NGO, its board, staff, or services, responses from the NGO, if any, and key words associated with the alleged wrongdoing.

Based on an analysis of themes and patterns, a semi-structured interview guide was also constructed to gain a more in-depth perspective about how and why instances of wrongdoing occur. A convenience sample was identified utilizing a known network of U.S.-based CEOs and board members of a diverse set of nonprofit human service organizations to provide a beginning base of knowledge about perceptions of the conditions that may give rise to accountability lapses.

Study Limitations: There are several limitations associated with this methodology. One limitation is the inclusion of only one form of media. Another limitation is that the use of the internet as a search vehicle allows access to some, but not all of the world-wide press. The total universe of newspapers throughout the world is unknown and thus there is no claim made to any representation of the print media. Since the conduct of a search via the internet involves the use of key words, it is possible that some cases were omitted because they fell under different terminology and were thus not recognized. The interview component is based on a sample of convenience and involves only CEOs and board members in a confined geographic area of one country - the U.S. Thus, for this study component, cross-country comparisons are not possible and the findings are not generalizable. However, the interviews do provide insights about internal NGO functioning and the methodology may be replicated in future studies.

OVERVIEW OF FINDINGS: The themes portrayed in these cases parallel and substantiate earlier findings. Lessons have not been well learned and the press has increased its vigilance in monitoring NGO performance. The content analysis revealed six categories of wrongdoing: personal life style enhancement, parallel enterprises, resource expansion opportunities, theft, mismanagement of resources, and sexual misconduct. These cases are identical to those identified in the 2000 study, although the quantitative dimensions may differ.

Unless the underlying conditions which made these wrongdoings possible are addressed, fresh scandals will fill our daily newspapers and public trust in NGOs will erode. The findings point to a number of areas of NGO functioning that need to be address if appropriate accountability is to be achieved. These include:

clarifying board responsibilities to rectify malfunctions in governance structure and functioning.

Establishing and maintaining internal controls to eliminate any possibility of fraud or deception.

Initiating more rigorous board development and training opportunities. While there is consensus among the CEOs and board members interviewed that these areas need to be strengthened, there is also agreement that financial, time, and "personality" obstacles stand in the way.


Date received: September 19, 2003

(ITS AN ARTICLE WRITTEN 7YRS AGO ABOUT NGO'S WRONGDOINGS INTERNATIONALLY....EVEN IN OUR COUNTRY... (India is estimated to have around 1-2 million NGOs).MANY OF THEM ARE ON PAPER...GETTING FUNDS/GRANTS FROM DIFFERENT AGENCIES...BUT NOT WORKING ON FIELD PROPERLY.)...MY MISSION IS TO TRY AND WORK HARD TO MAINTAIN THIS CREDIBILITY OF MANY NGO'S OF OUR COUNTRY...KNOWN OR UNKNOWN...WHO ARE WORKING 'GENUINLY' AND ARE NOT A FRAUD. THOUGH I FEEL FOR SOCIAL SERVICE ONE DO NOT NEED AN NGO....BUT THEN TO DO SOMETHING PROPERLY ONE DO NEED A PROPER PLATFORM....SO IS 'ADITI FOUNDATION' FOR ME AND SUDHIRJI...FOR AND MY TEAM.)