Accountability gone public

 Yesterday, U.S. Department of Health and Human Services (HHSS) Secretary Kathleen Sebelius sent a letter to Anthem Blue Cross in California requesting ” a detailed justification” for raising their premiums by up to 39% (See HERE  for link). Irrespective of personal views on the political propriety of a government agency requesting justification from private sector businesses regarding their practices, the letter highlights accountability and transparency as the new reality. This shouldn’t be a surprise. Consider the auto industry. Consider the banking industry. The health and insurance industry seems to be a natural progression in the call for accountability.

In the nonprofit world, issues of accountability have traditionally been less stringent. Perhaps this is because the majority of the public and governmental sectors accepted some fiscally relaxed accountability as a trade-off for the (arguable) perception that nonprofit leaders are “good-willed people” who are “people people,” and not necessarily people trained to run organizations.

But, as Secretary Sebelius’ letter and other government interventions infer, accountability and transparency standards are stepping up. If government agencies are looking into private companies, it stands to reason that they will be more carefully looking into the organizations that are funded directly by the government. And they are (consider the ARRA funds), and will continue to be looking into organizations receiving their funds. Being a “good” organization is not good enough anymore relevant to accountability and transparency. The rules of the game have fundamentally changed: Organizational play-books are now required to be opened for public and governmental scrutiny.

Is such openness and accountability all productive, or do you see some potential drawbacks for high levels of accountability in the nonprofit sector? For example, will high levels of accountability move service providers toward efficient practices at the expense of compassionate practices that have defined nonprofits for years? What are your thoughts?