Performance Accountability as a Driver for Changes in Nonprofit–Government Relationships: An Empirical Insight from Austria

Abstract

New Public Management (NPM) and follow-up reforms have extended the external accountability duties of nonprofit organizations (NPOs). They are increasingly obliged to demonstrate performance in terms of efficiency and effectiveness and to introduce performance measurement systems (PM systems) for this purpose. This is also the case in Austria, a country with a strong (neo-)corporatist tradition. In the field of social services, nonprofit–government relations are now commonly regulated by performance-based contracts (PBCs) entailing specific accountability obligations. We assume that these externally imposed performance accountability demands affect both NPOs’ strategic focus and their relationships to important stakeholders including state authorities, and thereby influence the system of societal governance. Thus, we investigate NPOs’ stakeholder focus, (power) relations between NPOs and public funders and explore to what extent the latter exert influence on PM system development and how nonprofit executives assess the cost–benefit ratio of PM systems imposed on them.