Measuring What Is Not Seen—Transparency and Good Governance Nonprofit Indicators to Overcome the Limitations of Accounting Models

Abstract

One of the most complex challenges currently faced by non-profit organizations (NPOs) is demonstrating that they manage resources with the highest levels of efficiency and excellence, and do not deviate from the accomplishment of their mission. Transparency and good governance are highly valuable issues for the survival of these organizations. However, empirical studies and models to measure these concepts are scarce and lack consensus. The objective of this article is to develop a uniform procedure for measuring the levels of transparency and good governance in NPOs, validated by experts, that integrates the most important contributions. The main proposals are supported by lists of indicators whose compliance they try to verify. Finally, we considered the experts’ preferences to obtain the indicator weights by means of the Best–Worst Method and Minimum Cost Consensus model. The result of our work is the development of a list of indicators, which integrates the existing battery of Spanish indicators. We contribute, with this work, to improving the credibility of the third sector from the perspective of donors, users, public administrations, and society. This is an essential issue for the survival of these NPOs.