Nonprofit certification in Canada: Re-assessment and fine tuning of the Standards Program

In 2012, Canada’s nonprofit sector launched one of the most rigorous, cross-sector certification systems in the world, comprising 73 standards covering most aspects of organizational governance, transparency, HR and financial management. Having completed initial implementation, the Standards Program is currently undergoing an assessment, which offers scholars an opportunity to evaluate certification and the processes by which it develops. This includes the successes and shortcomings, incentives and impediments to participation, effects of the standards have, and required modifications.

The paper addresses these questions drawing on data from a collaborative inquiry with the host, Imagine Canada, and on extensive interviews with accredited organizations and the program’s peer reviewers. First, we assess the perceived value of specific sets of standards and where there is the greatest non-compliance. Second, we examine what benefits the accredited nonprofits believe they have obtained.

The results do not support the predominant “accountability club” theory (Prakash and Potoski, 2007; Prakash and Gugerty, 2010) which argues that the main motives are to enhance reputation, leading to increased public trust and success at fundraising. Rather, the main perceived advantages are focused on self-improvement, including increased professionalism, strong board governance and ability to manage risk. Third, we consider the kinds of charities and nonprofits that have sought out and are most satisfied with accreditation, which are more likely to be mid-sized rather than large organizations. On the basis of these findings, we propose an alternative theory of nonprofit self-regulation focused on self-improvement, innovation and collective, inclusive sector building.