Non-profit self-regulation is vital if NGOs are to win public trust, but is it enough? Is external accreditation needed as well? These were the questions raised by two workshops on non-profit standards and ethics at the CIVICUS Assembly in August.

It was generally agreed that public distrust reduces the support for and effectiveness of charities in many countries. While many NGOs and NGO associations have developed standards and codes of behaviour, these often need to be stronger and more rigorously enforced. Self-regulatory codes are a good start but they may not be sufficient to gain increased public trust. NGOs and NGO associations should therefore encourage external review and evaluation.

The role of self-regulation …

The workshop on ‘Self-Regulation and the Citizen Sector’ explored the case for citizen sector self-regulation through cases from Pakistan, India and the Philippines. According to David Bonbright of the Aga Khan Foundation: ‘Processes and mechanisms of self-regulation can and should be created in order to build the capacity of citizen organizations to articulate their identities and missions, implement effective programmes, communicate their impact, transform the formal regulatory framework, and win inexhaustible support from their societies.’

The NGO Resource Centre in Pakistan promotes self-regulation among NGOs in Pakistan by linking it with indigenous resource mobilization. Pakistan has about 30,000 NGOs but their public image is not very positive. Financial scandals related to NGOs are immediately reflected in the media. The Centre believes that to gain credibility and support from government, media and society at large, NGOs must proactively demonstrate their probity and effectiveness. A facilitative regulatory environment will thus depend upon a prior demonstration of effective self-regulation by NGOs.

In the last two years, the Centre has provided support to the Pakistan NGO Forum in its development of an NGO code of conduct. It has also run a series of workshops across Pakistan promoting self-regulation as a way to build the kind of social legitimacy that can win financial support within the country.

CAF India’s ‘validation experiment’ and the Philippine Council for NGO Certification provide live examples of civil society innovations in building NGO legitimacy becoming part of the official regulatory framework. In India, the CAF initiative was undertaken together with the Federal Planning Commission, which is exploring ways and means of linking regulatory requirements and independent self-regulatory mechanisms. The Philippine Council for NGO Certification provides the first instance in the world of a government delegating to an NGO the certification of NGOs to qualify for tax benefits.

… and its limitations

The workshop on ‘Beyond Self-Regulation’ further explored the need for more independent verification of good behaviour. While self-regulation helps learning, improves performance, and makes for good public relations, it was suggested that it is in the final analysis a doubtful route to external credibility because the process is administered internally by NGOs or the sector. For real credibility, independent review and enforcement are needed (see box for other steps that might be taken).

Research by the International Center for Not-For-Profit Law shows that self-regulation is most successful in countries where regulation is strongest. Laws are needed to set minimum standards for good internal governance, mechanisms for accountability to various constituencies, and transparency to the public and government. Self-regulation should then set higher standards through internal self-assessment, standards and codes for affinity groups, watchdog organizations and external accreditation.

Ken Phillips is a consultant in fundraising and capacity-building for non-profit organizations. He has worked for 37 years in fundraising, management and evaluation with non-profits such as Save the Children, PLAN International and the Red Cross. He can be reached at NGOFUTURES@aol.com or http://www.geocities.com/ngofutures

Suggested steps to credibility

• Adopting NGO, sector and national codes of ethics.
• Establishing more standardized measurements of performance.
• Compiling, publicizing and promoting good practices.
• Ensuring that existing self-assessment and self-regulation codes are rigorously enforced.
• Developing new standards where NGOs are most vulnerable such as evaluating programme results over the short and long term, learning from past successes and failures, conducting self-assessment or verifying that governance is effective.
• Conducting confidential peer reviews on these and other priority concerns.
• Having programmes independently audited.
• Conducting external accreditation of key performance areas.

For more about the NGO Resource Centre in Pakistan, contact Qadeer Baig at qadeer.baig@ngorc.org.pk

For more about CAF India’s validation exercise, contact Mathew Cherian at mathewc@nde.vsnl.net.in

For information on the Philippine Council for NGO Certification, visit the website at http://www.pcnc.com.ph