From NGOs’ accountability to social trust. The evidence from CEE countries

ENPurpose: The paper aims to find a link between the level of NGO accountability and the social trust for non-governmental organisations (NGOs). We will investigate if the accounting regulations and transparency rules for NGOs in particular countries influence the social trust for NGOs. We will follow the process of the creation of accounting law for NGOs in three CEE countries: Lithuania - one of the Baltic states, which is in last place in the World Giving Index ranking, and Poland, and Croatia - the two best post-communist countries in the World Giving Index ranking. We will analyse the change in social trust in these countries in line with the development of legal and accounting rules and norms for NGOs. Methodology/approach: The design and methodology approach includes a literature review and comparative analysis. We supported our findings with panel regression analysis. Research limitations include the selection of only a few countries for the analysis and only nine years of observation per country. Findings: The results of our research indicate that accounting regulations are of marginal importance for social trust. We conclude that accountability alone does not solve the social trust problems faced by non-profit organisations. Other factors affect social trust, such as lack of institutional mechanisms, lack of an empathic society, and negative media coverage. Originality/value: The originality and value of this paper lie in the fact that we explain how NGOs’ accountability and revenues influence social trust in NGOs. Furthermore, we refer to CEE countries where - due to their historical heritage - both social trust and transparency were deeply affected. Keywords: NGOs, post-communist countries, civil trust, NGOs accountability, transparency, control.