Accountability standards and legitimacy of not-for-profit organizations in the Netherlands

Abstract

Over the past five to 10 years, central government has expanded the rules and guidelines relating to the accountability standards of not-for-profit organizations aimed at increasing transparency. This information should enable stakeholders to assess whether the organization is operating in a legitimate way. This reasoning presumes a direct link between accountability standards and legitimacy. We have found that in theory there should be a link between both, because accountability standards are aimed at supplying information to external parties in order to be able to judge activities. On the other hand, we have found that all stakeholders are different and have varying information needs. Furthermore, in order to operate legitimately, the organization not only has to supply information but should also interact with different stakeholders at various moments and in various ways. These findings suggest that an overly strong focus on strengthening accountability standards in order to enhance legitimacy is not enough. Organizations should interact in different ways with stakeholders to enhance legitimacy.