No CrossRef data available.
Article contents
Restricted Funding: Restricting Development?
Published online by Cambridge University Press: 01 January 2026
Abstract
This paper examines, from a management accounting perspective, the efficacy of the dominant ‘restricted’ funding structure in the international development NGO sector in terms of overall sector effectiveness, and whether it is the most appropriate means of funding NGOs. The objective is to encourage theoretical debate around the tensions highlighted between external accountability for funding and overall value-for-money delivered by individual development NGOs and the wider international development sector. From unique access to three internationally recognised major NGOs, our case studies reveal management accounting as broadly homogenous, with some nuanced distinctions both within and between the cases; but the scope of management accounting emerges as relatively limited. This is despite the NGOs utilising complex accounting software, employing qualified accounting staff, and having a large annual income. Using the broad principles of systems theory to frame our approach, this paper suggests that due to the ‘restricted’ nature of funding awarded to NGOs by institutional donors, accounting is dominated by external accountability reporting to the detriment of management accounting. These relatively novel data on management accounting practices at international development NGOs help illustrate how, potentially, NGOs are missing opportunities to utilise, or even improve, value-for-money in terms of how various program themes, geographic areas or time periods are delivering better or worse discernible impact for the money spent.
Keywords
Information
- Type
- Original Paper
- Information
- Voluntas: International Journal of Voluntary and Nonprofit Organizations , Volume 30 , Issue 6 , December 2019 , pp. 1348 - 1364
- Copyright
- Copyright © International Society for Third-Sector Research and The Johns Hopkins University 2018
References
Agyemang, G., O’Dwyer, B., Unerman, J., & Awumbila, M. (2017). Seeking ‘conversations for accountability’: Mediating the impact of non-governmental organization (NGO) upward accountability processes. Accounting, Auditing and Accountability Journal, 30(5), 1–30.10.1108/AAAJ-02-2015-1969CrossRefGoogle Scholar
Arya, A., & Mittendorf, B. (2015). Career concerns and accounting performance measures in nonprofit organizations. Accounting, Organizations and Society, 40(1), 1–12.CrossRefGoogle Scholar
Awio, G., Northcott, D., & Lawrence, S. (2011). Social capital and accountability in grass-roots NGOs: The case of the Ugandan community-led HIV/AIDS initiative. Accounting, Auditing and Accountability Journal, 24(1), 63–92.10.1108/09513571111098063CrossRefGoogle Scholar
Bakewell, O., & Garbutt, A. (2005). The use and abuse of the logical framework approach: A review of international development NGOs’ experiences. Stockholm: Swedish International Development Agency.Google Scholar
Brown, D., & Moore, M. (2001). Accountability, strategy, and international non-governmental organisations. Nonprofit and Voluntary Sector Quarterly, 28(4), 178–197.Google Scholar
Burns, J., & Scapens, R. (2000). Conceptualising management accounting change: An institutional framework. Management Accounting Research, 11(1), 3–25.10.1006/mare.1999.0119CrossRefGoogle Scholar
Callen, J., Klein, A., & Tinkleman, D. (2003). Board composition, committees, and organisational effectiveness: The case of non-profits. Nonprofit and Voluntary Sector Quarterly, 32(4), 493–520.10.1177/0899764003257462CrossRefGoogle Scholar
Claeyé, F., & Jackson, T. (2012). The iron cage re-revisited: Institutional isomorphism in non-profit organisations in South Africa. Journal of International Development, 24(5), 602–622.CrossRefGoogle Scholar
Connolly, C., Hyndman, N., & McConville, D. (2012). Research in charity accounting and reporting: A fertile field for exploration. Irish Accounting Review, 1, 1–30.Google Scholar
Connolly, C., Hyndman, N., & McConville, D. (2013). Conversion ratios, efficiency and obfuscation: A study of the impact of changed UK charity accounting requirements on external stakeholders. VOLUNTAS: International Journal of Voluntary and Nonprofit Organizations, 24(3), 785–804.10.1007/s11266-013-9371-8CrossRefGoogle Scholar
Cordery, C., & Sinclair, R. (2013). Measuring performance in the third sector. Qualitative Research in Accounting and Management, 10(3/4), 196–212.CrossRefGoogle Scholar
Crowley, J., & Ryan, M. (2013). Building a better international development NGO: Greater than the sum of the parts. London: Kumarian Press.10.1515/9781565495845CrossRefGoogle Scholar
Development Cooperation Ireland (2005). Evaluation of the Development Cooperation Ireland multi annual program scheme 2003–2005. Dublin: The Department of Foreign Affairs.Google Scholar
Dhanani, A., & Connolly, C. (2012). Discharging not-for-profit accountability: UK charities and public discourse. Accounting, Auditing and Accountability Journal, 25(7), 1140–1169.10.1108/09513571211263220CrossRefGoogle Scholar
Dhanani, A., & Connolly, C. (2015). Non-governmental organizational accountability: Talking the talk and walking the walk?. Journal of Business Ethics, 29(1), 613–637.CrossRefGoogle Scholar
Dolnicar, S., Irvine, H., & Lazarevski, K. (2008). Mission or money?: Competitive challenges facing public sector nonprofit organisations in an institutional environment. International Journal of NonProfit and Voluntary Sector Marketing, 13(2), 107–117.10.1002/nvsm.311CrossRefGoogle Scholar
Ebrahim, A. (2002). Information struggles: The role of information in the reproduction of NGO-funder relationships. Nonprofit and Voluntary Sector Quarterly, 31(1), 84–114.10.1177/0899764002311004CrossRefGoogle Scholar
Ebrahim, A. (2005). Accountability myopia: Losing sight of organisational learning. Nonprofit and Voluntary Sector Quarterly, 34(1), 56–87.CrossRefGoogle Scholar
Ebrahim, A. (2009). Placing the normative logics of accountability in “thick” perspective. American Behavioural Scientist, 52(6), 885–904.10.1177/0002764208327664CrossRefGoogle Scholar
Edwards, M., & Hulme, D. (1995). Non-governmental organisations: Performance and accountability. London: Earthscan.Google Scholar
Edwards, M., & Hulme, D. (1996). Too close for comfort?: The impact of official aid on nongovernmental organisations. World Development, 24(6), 961–973.10.1016/0305-750X(96)00019-8CrossRefGoogle Scholar
European Centre for Development Policy Management (2009). Capacity change and performance: Policy management brief number 22. Maastricht: ECDPM.Google Scholar
Everett, J., & Friesen, C. (2010). Humanitarian accountability and performance in the Theatre de l’Absurde. Critical Perspectives on Accounting, 21(6), 468–485.10.1016/j.cpa.2010.01.014CrossRefGoogle Scholar
Fama, E., & Jensen, M. (1983). Separation of ownership and control. Journal of Law and Economics, 26(2), 301–326.10.1086/467037CrossRefGoogle Scholar
Ferreira, S. (2014). Sociological observations of the third sector through systems theory: An analytical proposal. VOLUNTAS: International Journal of Voluntary and Nonprofit Organizations, 25, 1671–1693.10.1007/s11266-014-9469-7CrossRefGoogle Scholar
Financial Reporting Council (2014). Accounting and reporting by charities: Statement of recommended practice. London: Financial Reporting Council.Google Scholar
Fowler, A. (1997). Striking a balance: A guide to enhancing the effectiveness of non-governmental organisations in international development. London: Earthscan.Google Scholar
Gasper, D. (2000). Evaluating the ‘logical framework approach’ towards learning-orientated development evaluation. Public Administration and Development, 20(1), 17–28.10.1002/1099-162X(200002)20:1<17::AID-PAD89>3.0.CO;2-53.0.CO;2-5>CrossRefGoogle Scholar
Goddard, A., & Assad, M. (2006). Accounting and navigating legitimacy in Tanzania NGOs. Accounting, Auditing and Accountability Journal, 19(3), 377–404.10.1108/09513570610670343CrossRefGoogle Scholar
Goddard, A., Assad, M., Issa, S., Malagila, J., & Mkasiwa, T. (2016). The two publics and institutional theory—A study of public sector accounting in Tanzania. Critical Perspectives on Accounting, 41, 1–62.Google Scholar
Gray, R. (1992). Accounting and environmentalism: An exploration of the challenge of gently accounting for accountability, transparency and sustainability. Accounting, Organizations and Society, 17(5), 399–425.10.1016/0361-3682(92)90038-TCrossRefGoogle Scholar
Gray, R., Bebbington, J., & Collison, D. (2006). NGOs, civil society and accountability: Making the people accountable to capital. Accounting, Auditing and Accountability Journal, 19(3), 405–427.10.1108/09513570610670325CrossRefGoogle Scholar
Harris, M., Dobson, S., & Fitzpatrick, R. (2009). Strategic drift in international non-governmental development organisations—Putting strategy in the background of organisational change. Public Administration and Development, 29(5), 415–428.10.1002/pad.542CrossRefGoogle Scholar
Harsh, M., Mbatia, P., & Shrum, W. (2010). Accountability and inaction: NGOs and resource lodging in development. Development and Change, 41(2), 253–278.10.1111/j.1467-7660.2010.01641.xCrossRefGoogle Scholar
Herman, R., & Renz, D. (2008). Advancing non-profit organisational effectiveness research and theory: Nine theses. Nonprofit Management and Leadership, 18(4), 399–415.10.1002/nml.195CrossRefGoogle Scholar
Hiebl, M. (2018). Management accounting as a political resource for enabling embedded agency. Management Accounting Research, 38, 22–38.10.1016/j.mar.2017.03.003CrossRefGoogle Scholar
Hopper, T., & Bui, B. (2016). Has management accounting research been critical?. Management Accounting Research, 31, 10–30.10.1016/j.mar.2015.08.001CrossRefGoogle Scholar
Hopwood, A. (1987). The archaeology of accounting systems. Accounting, Organizations and Society, 12(3), 207–234.10.1016/0361-3682(87)90038-9CrossRefGoogle Scholar
Horngren, C., Selto, F., & Curry, D. (2007). Introduction to management accounting. In Horngren, C., Sundem, G., Schatzberg, J., & Burgstahler, D. (Eds.), Introduction to management accounting. Gale: Pearson Prentice Hall.Google Scholar
Humphrey, C., & Scapens, R. (1996). Methodological themes, theories and case studies of organisational accounting practices: Limitation or liberation?. Accounting, Auditing and Accountability Journal, 9(4), 86–106.CrossRefGoogle Scholar
Hyndman, N., & McConville, D. (2016). Transparency in reporting on charities’ efficiency: A framework for analysis. Nonprofit and Voluntary Sector Quarterly, 45(4), 844–865.10.1177/0899764015603205CrossRefGoogle Scholar
Hyndman, N., & McDonnell, P. (2009). Governance and charities: An exploration of key themes and the development of a research agenda. Financial Accountability and Management, 25(1), 5–31.10.1111/j.1468-0408.2008.00463.xCrossRefGoogle Scholar
Hyndman, N., & McMahon, D. (2010). The evolution of the UK charity statement of recommended practice: The influence of key stakeholders. European Management Journal, 28(6), 255–266.10.1016/j.emj.2010.06.004CrossRefGoogle Scholar
International Council on Human Rights Policy (2003). Deserving trust—Issues of accountability for human rights NGOs. Geneva: ICHRP.Google Scholar
Kaplan, R., & Norton, D. (2001). Balance without profit. Financial Management, 23(6), 23–26.Google Scholar
Kast, R., & Rosenzweig, J. (1972). General systems theory: Applications for organisation and management. Academy of Management Journal, 15(4), 447–465.10.2307/255141CrossRefGoogle Scholar
Kovach, H., Neligan, C., & Burall, S. (2003). The global accountability report 2003: Power without accountability?. London: One World Trust.Google Scholar
Kuteesa, F., Tumusiime-Mutebile, E., Whitworth, A., & Williamson, T. (2010). Uganda’s economic reforms: Insider accounts. Oxford: Oxford University Press.Google Scholar
Lecy, J., Schmitz, H., & Swedlund, H. (2012). Non-governmental and not-for-profit organisational effectiveness: A modern synthesis. VOLUNTAS: International Journal of Voluntary and Nonprofit Organizations, 23(2), 434–457.10.1007/s11266-011-9204-6CrossRefGoogle Scholar
Letts, C., Ryan, W., & Grossman, P. (1998). High performance nonprofit organizations: Managing upstream for greater impact. New York: Wiley.Google Scholar
Lewis, D., & Opoku-Mensa, P. (2006). Moving forward research agendas on international NGOs: Theory, agency and context. Journal of International Development, 18(5), 665–675.10.1002/jid.1306CrossRefGoogle Scholar
Martinez, D., & Cooper, D. (2012). Transforming and mobilizing fluid accounting inscriptions: The logical framework in non-governmental organizations. Research Paper Number 2013-06, University of Alberta School of Business, Alberta.Google Scholar
McEvoy, P. (2018). Cooperation, complexity and adaptation: Higher education capacity initiatives in international development assistance programmes in sub-Saharan Africa. Doctoral Thesis, Dublin City University, Dublin.Google Scholar
McEvoy, P., Brady, M., & Munck, R. (2016). Capacity development through international projects: A complex adaptive systems perspective. International Journal of Managing Projects in Business, 9(3), 528–545.10.1108/IJMPB-08-2015-0072CrossRefGoogle Scholar
Modell, S. (2003). Goals versus institutions: The development of performance measurement in the Swedish university sector. Management Accounting Research, 14(4), 333–359.10.1016/j.mar.2003.09.002CrossRefGoogle Scholar
Najam, A. (2002). Financial sustainable development: Crises of legitimacy. Progress in Development Studies, 2(2), 153–160.10.1191/1464993402ps036xxCrossRefGoogle Scholar
Norwegian Agency for Development Co-Operation (1990). The logical framework (LFA)—Handbook for objectives-orientated project planning. Oslo: NORAD.Google Scholar
O’Dwyer, B., & Boomsma, R. (2015). The co-construction of NGO accountability: Aligning imposed and felt accountability in NGO-funder accountability relationships. Accounting, Auditing and Accountability Journal, 28(1), 36–68.10.1108/AAAJ-10-2013-1488CrossRefGoogle Scholar
O’Dwyer, B., & Unerman, J. (2006). Theorising accountability for NGO advocacy. Accounting, Auditing and Accountability Journal, 19(3), 349–376.Google Scholar
O’Dwyer, B., & Unerman, J. (2007). From functional to social accountability: Transforming the accountability relationship between funders and non-governmental development organisations. Accounting, Auditing and Accountability Journal, 20(3), 446–471.CrossRefGoogle Scholar
O’Leary, S. (2017). Grassroots accountability promises in rights-based approaches to development: The role of transformative monitoring and evaluation in NGOs. Accounting, Organizations and Society, 63, 21–41.CrossRefGoogle Scholar
Patton, M. (1990). Qualitative evaluation and research methods. California: Sage Publications.Google Scholar
Quinn, M. (2014). Stability and change in management accounting over time: A century or so of evidence from Guinness. Management Accounting Research, 25, 76–92.10.1016/j.mar.2013.06.001CrossRefGoogle Scholar
Rahaman, A., Neu, D., & Everett, J. (2010). Accounting for social-purpose alliances: Confronting the HIV/AIDS pandemic in Africa. Contemporary Accounting Research, 27(4), 1093–1129.10.1111/j.1911-3846.2010.01040.xCrossRefGoogle Scholar
Riddle, R. (1999). Evaluating NGO development interventions. In Lewis, D. (Ed.), International perspectives on voluntary action: Reshaping the third sector. London: Earthscan.Google Scholar
Roberts, J. (1990). Strategy and accounting in a UK conglomerate. Accounting, Organizations and Society, 15(1/2), 107–126.10.1016/0361-3682(90)90017-OCrossRefGoogle Scholar
Ryan, B., Scapens, R., & Theobald, M. (2003). Research methods and methodology in finance and accounting. London: Thompson Press.Google Scholar
Saravanamuthu, K., & Tinker, T. (2003). Politics of managing: The dialectics of control. Accounting, Organizations and Society, 28(1), 37–64.10.1016/S0361-3682(02)00009-0CrossRefGoogle Scholar
Scapens, R. (2004). Doing case study research. In Humphrey, C. & Lee, B. (Eds.), The real life guide to accounting research: A behind the scenes view of using qualitative research methods. Oxford: Elsevier.Google Scholar
Schneider, M., & Somers, M. (2006). Organizations as complex adaptive systems: Implications of complexity theory for leadership research. The Leadership Quarterly, 17(4), 351–365.10.1016/j.leaqua.2006.04.006CrossRefGoogle Scholar
Sen, A. (2013). The ends and means of sustainability. Journal of Human Development and Capabilities, 14(1), 6–20.10.1080/19452829.2012.747492CrossRefGoogle Scholar
Senge, P. (1993). The fifth discipline: The art and practice of the learning organization. New York: Doubleday.Google Scholar
Speckbacher, G. (2003). The economics of performance management in nonprofit organisations. Nonprofit Management and Leadership, 13(3), 267–287.10.1002/nml.15CrossRefGoogle Scholar
Tassie, B., Murray, V., & Cutt, J. (1998). Evaluating social service agencies: Fussy pictures of organisational effectiveness. VOLUNTAS: International Journal of Voluntary and Nonprofit Organizations, 9(1), 59–79.CrossRefGoogle Scholar
Tinkelman, D., & Donabedian, B. (2007). Street lamps, alleys, ratio analysis, and non-profit organisations. Nonprofit Management and Leadership, 18(1), 5–18.10.1002/nml.168CrossRefGoogle Scholar
Torres, L., & Pina, V. (2003). Accounting and accountability and management in NPOs: A comparative study of four countries: Canada, The United Kingdom, The USA, and Spain. Financial Accountability and Management, 19(3), 265–285.10.1111/1468-0408.00174CrossRefGoogle Scholar
Tucker, B. (2010). Through which lens?: Contingency and institutional approaches to conceptualising organisational performance in the not-for-profit sector. Journal of Applied Management Accounting Research, 8(1), 1–17.Google Scholar
Tucker, B., & Parker, L. (2013). Out of control?: Strategy in the NFP sector: The implications for management control. Accounting, Auditing and Accountability Journal, 26(2), 234–266.10.1108/09513571311303729CrossRefGoogle Scholar
United Nations Development Group. (2011). Results based management handbook: Harmonising RBM concepts and approaches for improved development results at country level. United Nations Development Group, New York. www.issuu.com/undevelopmentgroup/docs/undg-rbm-handbook. Accessed 22 Mar 2016.Google Scholar
Valters, C., Cummings, C., & Nixon, H. (2016). Putting learning at the centre—Adaptive development programming in practice. Overseas Development Institute, London. www.odi.org/publications/10367. Accessed 19 Feb 2018.Google Scholar
Woolcock, M. (2013). Using case studies to explore the external validity of ‘complex’ development interventions. Evaluation, 19(3), 229–248.10.1177/1356389013495210CrossRefGoogle Scholar
- 11
- Cited by