Kiel Working Papers, Kiel Institute for World Economics
No 1640:
Funding, Competition and the Efficiency of NGOs: An Empirical Analysis of Non-charitable Expenditure of US NGOs Engaged in Foreign Aid
Peter Nunnenkamp and Hannes Öhler
Abstract: We assess the determinants of the wide variation in the
efficiency of foreign aid activities across US-based non-governmental
organizations (NGOs). In particular, we analyze whether non-charitable
expenditures – i.e., administration, management and fundraising – depend on
the intensity of competition among NGOs and on the degree to which they are
refinanced by governments. We control for NGO heterogeneity in various
dimensions as well as major characteristics of recipient countries. We find
that fiercer competition is associated with more efficient foreign aid
activities of NGOs, rather than leading to “excessive” fundraising.
Official funding tends to increase administrative costs. Nevertheless,
officially financed NGOs spend relatively more on charitable activities
since they are less concerned with collecting private donations through
fundraising efforts
Keywords: non-governmental organizations, foreign aid, administrative costs, fundraising, United States; (follow links to similar papers)
JEL-Codes: F35,; L31; (follow links to similar papers)
25 pages, July 2010
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