NGOs are experiencing a dramatic increase in pressure from regulators and government. This is most evident in legislation and regulation hostile to the freedoms NGOs have come to rely on in their operations, including freedom of speech, freedom of association, and freedom to raise funds. Last year was a particularly bad year for NGOs in this regard. Amidst high profile scandals reported in the mainstream media, civil society actors are facing stringent reporting regulations and fundraising oversight across the world (see ICNL trend reports, and the Etherington review).
Many scholars and practitioners believe that this increased oversight through accountability frameworks will combat perceived problems of NGO trustworthiness. This concern over NGO trustworthiness is well-founded, since perceptions of trustworthiness are essential for NGOs to operate. Without trust, donors – be they institutions, governments, or private citizens – might take their time and money elsewhere. But do these accountability frameworks actually help to build trust? Our recent paper, published in the British Journal of Politics and International Relations, tackles this question. It argues that the accountability agenda rests on what we call a rational model of trust. This model, however, might be harmful to relationships of trust built on social factors, such as feelings of solidarity or identity. Ignoring this difference, and simply moving forward with accountability based on a rational model, could leave the sector with less trust and permanent compliance costs.
What is the rational model of trust?
Rational models of trust suggest that donors calculate whether to trust NGOs based on two things: a) the amount of information donors have about the NGOs, such as their past performance and governance structures, and b) the ability they have to inflict penalties on non-compliant NGOs. These two factors help donors to predict whether an NGO will do what is expected of them. Information about past behaviour is used to predict future behaviour, and the existence of penalties raises expectations that NGOs will do what is expected of them. Accountability frameworks feed into this rational understanding of trust. That is, they institute mechanisms (such as M&E) that provide information to donors, and emphasize the creation of punishment (e.g. withdrawal of funding) that incentivise NGOs to comply with donor expectations.
What about the social side of trust?
However, what the rational model of trust fails to do is to consider social factors that might affect trust, such as shared identity and solidarity. These are highly relevant to most donor-NGO relationships, since donors will trust, and thus give resources to, NGOs where they feel a connection with their cause or mission statement (or even at the interpersonal level trust the staff). Social trust theory suggests that these social factors lead donors to trust an NGO with far less information than would otherwise be expected in a rational model. This link between identity, solidarity, and trustworthiness might explain why NGOs were constantly the most trusted organisations within society, despite the historical lack of accountability measures. Social trust theory also suggests that trust can become habitual over time. So instead of constantly judging the information available to determine whether to entrust the NGO with their money or time, as suggested by the rational model, a donor in a habitual trusting relationship no longer considers the possibility of the NGO breaking their trust. These relationships are highly valuable to NGOs, since apart from blatant violations of the donor’s trust, it allows them to be seen as trustworthy without the costs associated with accountability.
Does the rational model undermine trust?
While blind faith in NGOs is problematic, we are concerned in our article that accountability frameworks tend to ignore the social side of trust. Indeed, they can disrupt valuable relationships based on habitual trust. If donors increasingly rely on information provided through accountability frameworks before making the decision to donate, this could leave NGOs in a worse position with respect to their perceived trustworthiness. At the same time, complying with accountability frameworks adds administrative costs and burdens for NGOs.
This finding is supported by experimental social psychology, where multiple studies suggest that the imposition of external controls in agreements leads to distrust between the cooperating parties. This creates a vicious cycle that only reinforces the need for future controls.
We believe that a more open conversation is needed to explore the links between the accountability agenda and perceptions of NGO trustworthiness. While our research is theoretical, we suspect that this trend can have severe consequences for the relationships NGOs have with a variety of actors in the aid chain, including donors, implementing partners and those who benefit from the work of NGOs. We thus encourage practitioners and decision-makers to think on our argument: does it reflect their experiences in practice? At the very least, we think that there should not be an automatic assumption that accountability agendas will help increase trust in NGOs. Indeed, the opposite may happen.