Accountability of Social Economy Organizations: Challenges and Conflicts

The provision of public services has changed significantly over the years. One of the more recent changes has involved the increased delivery of public services by non-governmental organizations, whether these organizations be private in nature or belong to the so-called third sector. The third sector is known by a number of different terms, including the non-profit sector, the voluntary sector, civil society, and the social economy. Of particular interest in this study are those social economy organizations (SEOs) that receive the whole or a part of their revenue from the government. These organizations must be accountable to the government for the funds that government provides to them. The purpose of this accountability is to ensure SEOs undertake their obligations to use public resources effectively and to deliver quality public services. One potential accountability challenge involves the limitations associated with the performance evaluation of SEOs, since performance is often not easily observable. Performance is comprised of two parts: the work done by the organization (output) and the impact of this work (outcome). The difficulty in the observation of both outputs and outcomes may result in a conflict for the SEOs between focusing on observable parts of their work that can be more readily measured and reported to meet accountability requirements versus work with less tangible outputs and outcomes. In a funding agreement between an SEO and government, the SEO might have to agree with government requirements, for instance, to follow standardized procedures so that the government can monitor the observable aspects of its work. This requirement may conflict with the SEO’s desire to focus on things that are not observable, and consequently not funded by the government, but are important to the SEO’s mission and social goals. The goal of this research study is to examine the challenges that arise in the operation of SEOs, given that they need to be responsive to government’s expectations and at the same time follow their mission requirements. In-depth interviews were used to examine the extent to which outputs and outcomes are unobservable in SEOs as well as the possible conflicts that might arise between competing objectives within SEOs. Interview participants are three SEO executive directors and one manager, each of whom is responsible for the work carried out by his or her respective SEO. A government employee involved in providing funding to one of the SEOs was also interviewed. The results of this study suggest that the SEOs that were examined have varying degrees of unobservable outputs and outcomes. This study also found that organizations with a greater percentage of unobservable outputs and outcomes experienced a greater degree of conflict in their relationships with government. One of the reasons for the conflict is that the SEO personnel felt that the government focused its attention too much on the observable outputs/outcomes and not enough on outputs and outcomes that, although unobservable, were nevertheless important to clients and the public. Moreover, the SEOs examined in this study that serve specific groups of clients, such as seniors or immigrants, experienced less conflict than those whose services (e.g., increasing environmental sustainability) target the general public. The results of this research have implications for the way in which government structures its activities. Over the last 25-30 years, governments have, through New Public Management (NPM), privatized the provision of public services and encouraged greater competition in the delivery of public services. The results of the analysis carried out in this thesis suggest that this restructuring may not be as effective in situations where the services are directed toward the general public and/or where the services provided involve unobservable outputs and outcomes. The added conflict that appears to accompany these situations suggests that there may be goals and objectives that are important to society but are not being met through the contractual relationship established between the government and the SEO. Since NPM is expected to remain in place, government may wish to find ways of better addressing important unobservable outputs and outcomes. One suggestion, drawn from the interviews with SEOs, is that the government officials who are assigned to work with SEOs should have a good knowledge of the SEOs and be familiar with their missions and functions. This knowledge and familiarity might enable the government officials to evaluate the degree to which non-observable outputs and outcomes are being provided, which in turn might reduce conflict and ensure a better provision of services to clients and the public