In the past two decades, the nature of the state has changed from more interventionist to more facilitative. Nonprofit organizations are involved in all facets of the policy process, especially for expert and technical advice, research and program feedback, information delivery, and service provision. But what of the concerns related to accountability and capacity of these partners in policy?

These concerns are heightened by a second trend – an explosion in the number of organizations representing citizens and providing services to them. Citizens have turned to organizations they can relate to and engage with, both to represent their interests to government and to provide information and services previously provided by Canada’s public servants.

It’s a key dilemma for government: how to reinforce the accountability and capacity of the nonprofit sector without undermining its autonomy or vitality?

There are two roles that government might adopt when supporting the nonprofit sector. One is for government to act in an enabling capacity. In the fullest expression of this role, government would operate as a full partner to nonprofit organizations in the development and implementation of policy. Governments would open the policy process to relevant organizations and then provide any necessary support to ensure that the organizations could take full advantage of the opportunity while respecting the organizations’ autonomy and independent decision-making process. A good approximation of this type of relationship was the federal government-voluntary sector initiative in Canada, particularly between 2000-2002, although a fully equal partnership was not realized.

At the other end of the spectrum is the option for government to act in a regulatory capacity. In the strongest expression of this role, the government would unilaterally or after limited consultation with organizations enact legislation for the nonprofit sector, attaching penalties and sanctions to force organizations to comply with expected standards or behaviours. Penalties could be enforced either through special tribunals and administrative bodies or through the police and courts. In this capacity, government is acting in a directive and activist role, assuming the responsibility of defining the necessary behaviours or standards, policing the agents, and ensuring compliance. An example would be the Canada Revenue Agency defining what a charity is, registering organizations under its code, monitoring the activities of organizations, and revoking their charitable status when they are deemed in conflict with legislated norms.

Between these two extremes, there are a range of actions that government might adopt to support and promote the nonprofit sector in its work (see table 1) ranging from cooperative to coercive. As partners, government and organizations engage as equals in the promotion of commonly defined policies and goals. Both parties respect the autonomy of the other but of course government dominates in certain areas of the relationship, such as defining funding.

Still, the relationship can be collaborative, with the sector agents acting as participants and active advisors where the state is empowered to act in ways defined by the two sectors in the accord (e.g., Canadian federal government and voluntary sector accord and codes of good conduct or the British compacts between the government and voluntary sectors in England and Scotland).

In the third category of enabling actions, the state will actively seek out opportunities to support the sector, for example by offering organizations money to assist with a responsibility without the agency either applying for it or reporting back on the expenditure, or by creating an organization to provide a service. Here the state is empowering the sector but acknowledging its independence. In a more passive role, the state can provide information necessary that organizations may access themselves through the Internet, newsletters or other means. The onus is on organizations to seek out these opportunities.

In its softest or weakest role as an enabler, the state may exhort action and offer praise or rewards when compliance is evident (e.g., volunteer awards). The state acts much like a kind and encouraging mentor here.

On the other side, the state acts in an enforcement capacity, with its hardest form of action consisting of legislation or common law rules (slightly softer than codified legislation) with defined penalties and sanctions. Legislation without penal sanctions would be a more moderate form of coercive action (e.g., a law recognizing an organization). Standards and rules still impose the will of government on the organizations but are easier to change (e.g., setting standards in service provision). Funding can be an enabling mechanism but when it is directly tied to certain types of behaviour or standards, then it is more coercive (e.g., providing services to a specific clientele that an organization may not have included in the past or requiring two organizations to merge in order to receive funding). Tied aid can be very coercive if it affects the ability of an organization to comply with its own mission. Eligibility rules for programs, service provision or funding are also coercive. However, they may be deemed less coercive than tied aid if the exclusion is voluntary and an organization has other avenues for obtaining similar support, such as tax incentives or a state sponsored grant that is supplemental to an organization’s main work.

On the softer side of the continuum lies exhorting certain types of action but with threats attached. For example, a funding department may threaten the relationship with an organization if that body does not comply with new accounting measures or the mandate of a new government or is too vocal in criticizing the bureaucracy. This is a grey area since praise can become an implied threat as well.

While the continuum is generally helpful in characterizing the different types of actions that the state might take to support the sector, it should be noted that enabling actions may shade into more coercive ones in certain contexts and vive versa. For example, officials from a particular government department and organizations operating in a particular policy area may identify a problem with renegade or badly governed organizations which threatens to tarnish the credibility of all organizations providing that service. Together, government and nonprofit officials would define the appropriate sanctions and necessary legislative measures to ensure certain standards are met. Here, a coercive form of state action becomes an example of the state and sector operating in a collaborative manner.

Another example might be legislation requiring corporations to provide employees with the opportunity to volunteer for a voluntary organization during working hours. Coercive action may be necessary to ensure that societal needs are met broadly within the sector and may be viewed as a positive force. Many programs carry with them the implicit threat of penalties or withdrawal of funding if an organization does not comply with expected or stated norms – positive support may have an implicit enforcement/coercive clause. As in most areas, shades of grey characterize the application of the criteria.

Finally, the relationship between government departments and organizations may be multi-faceted at any given time. Organizations might be subject to government legislation or regulations in one area of the relationship but might be partners in policy with another government department. Similarly, a government department might have a collaborative relationship with certain organizations but provide passive support to the sector on other issues within its mandate.

The key to developing good policy for organizations and