Trust but verify ? Voluntary regulation programs in the nonprofit sector

Content Provider	Semantic Scholar
Author	Prakash, Aseem Gugerty, Mary Kay
Copyright Year	2010
Abstract	In this article we examine how information problems can cause agency slippages and lead to governance failures in nonprofit organizations. Drawing on the principal–agent literature, we provide a theoretical account of an institutional mechanism, namely, voluntary regulation programs, to mitigate such slippages. These programs seek to impose obligations on their participants regarding internal governance and use of resources. By joining these programs, nonprofit organizations seek to differentiate themselves from nonparticipants and signal to their principals that they are deploying resources as per the organizational mandate. If principals are assured that agency slippages are lower in program participants, they might be more likely to provide the participants with resources to deliver goods and services to their target populations. However, regulatory programs for nonprofit organizations are of variable quality and, in some cases, could be designed to obscure rather than reveal information. We outline an analytical framework to differentiate the credible clubs from the “charity washes.” A focus on the institutional architecture of these programs can help to predict their efficacy in reducing agency problems.
File Format	PDF HTM / HTML
Alternate Webpage(s)	http://faculty.washington.edu/aseem/trust_but_verify.pdf
Language	English
Access Restriction	Open
Subject Keyword	Manufactured Supplies Nonprofit Organizations Population
Content Type	Text
Resource Type	Article