Can public trust in nonprofits governments be restored?

We entrust nonprofit and governmental organizations with society's most important functions - educating our minds, uplifting our souls, and protecting our health and safety. Lately, however, the public's faith in these institutions has been seriously undermined by revelations of wrongdoing and mismanagement. Can anything be done to restore the public's confidence? Regina Herzlinger argues forcefully that the answer lies in accountability. She points out that nonprofits and governments lack the mechanisms that compel accountability in the business world. Thus they require regulatory oversight to help them accomplish their social missions effectively, efficiently, and responsibly. Drawing on the SEC's history of successfully regulating securities trading, Herzlinger outlines a remedy she calls DADS. Her plan would require nonprofits and governments to increase the disclosure, analysis, and dissemination of performance information, and would apply sanctions against organizations that do not comply with those requirements. In particular, the author stresses the need for the disclosure of nonfinancial quantitative information as a way to determine if organizations such as schools and hospitals are fulfilling their missions. And she provides an example of how analysis might work in practice by applying her ideas retrospectively to the bankruptcy of Orange County, California, and by showing how it might have been avoided. Finally, she calls an managers and overseers of nonprofits and governments, members of the public, and elected officials to undertake the difficult work of restoring public trust in these important institutions.