The growth in the scale and scope of the nonprofit sector has been accompanied by numerous accountability challenges. Nonprofits have responded to these demands for increased accountability in a variety of ways. This volume focuses on a key accountability instrument employed by nonprofits: voluntary programs or codes, or voluntary clubs as we term them. Voluntary clubs seek to create institutional incentives for participating actors to adopt specific codes of conduct and practices beyond what is legally required of them. If accountability issues can be viewed as “agency problems,” voluntary clubs provide an opportunity for nonprofits (as agents) to signal to their resource providers and authorizers (as principals) that they are governing as agreed and delivering as promised. By virtue of their membership in such accountability clubs, nonprofits expect that the resource providers will reward them with more resources and less onerous governance costs.
Voluntary clubs are complex institutional structures. To explore their institutional design issues, we draw on the club approach which is well established in political economy. We bring in the principal–agent perspective to explore agents' motivations for establishing and joining voluntary clubs, and the principals' responses to them. The empirical chapters explore three core themes: (1) the emergence of voluntary accountability clubs, (2) club sponsorship, and (3) club design and effectiveness.
This volume makes two key contributions. Theoretically, it outlines an accessible yet robust framework for studying voluntary programs in the nonprofit sector.
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