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Samaritan Bundles: Inefficient Clustering in NGO Projects

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  • Verdier, Thierry
  • Aldashev, Gani
  • Marini, Marco

Abstract

We build a model with non-governmental organizations competing through fundraising for donations and choosing their project types. Donors’ willingness to give differs across project types. Each NGO chooses whether to compete in the larger donation market or to monopolize the smaller one. The resulting equilibrium configuration crucially depends on the asymmetry in potential donation market size and on donors’ perceived substitutability or complementarity between giving to two different projects. We analyze the welfare properties of the decentralized equilibrum and characterize the conditions under which such equilibrium is inefficient. We also develop a variant of the model with inter-temporal choices of NGOs, analyze settings where NGOs can coordinate their fundraising activities and/or project type choices, extend the model to allow for spillovers between NGO fundraising activities, and illustrate the mechanisms of the model with several case studies.

Suggested Citation

  • Verdier, Thierry & Aldashev, Gani & Marini, Marco, 2017. "Samaritan Bundles: Inefficient Clustering in NGO Projects," CEPR Discussion Papers 11931, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:11931
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    Cited by:

    1. Kopel, Michael & Marini, Marco A., 2022. "Mandatory disclosure of managerial contracts in NGOs," Journal of Economic Behavior & Organization, Elsevier, vol. 199(C), pages 65-85.
    2. Vallino, Elena & Aldahsev,Gani, 2013. "NGOs and participatory conservation in developing countries: why are there inefficiencies?," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201318, University of Turin.
    3. Michael Kopel & Marco A. Marini, 2020. "Mandatory Disclosure of Managerial Contracts in Nonprofit Organizations," Working Papers 2020.26, Fondazione Eni Enrico Mattei.
    4. Aldashev, Gani & Vallino, Elena, 2019. "The dilemma of NGOs and participatory conservation," World Development, Elsevier, vol. 123(C), pages 1-1.

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    More about this item

    Keywords

    Non-governmental organizations; Fundraising; Foreign aid; Clustering;
    All these keywords.

    JEL classification:

    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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