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Donations to US based NGOs in International Development Cooperation: How (Un-)Informed Are Private Donors?

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  • Peter Nunnenkamp

    (Kiel Institute for the World Economy)

  • Hannes Öhler

    (Georg-August-University Göttingen)

Abstract

Apart from scaling up foreign aid by NGOs, informed choices of private donors could also encourage an efficient and targeted use of NGO funds in international development cooperation. We assess the determinants of private donations across a large sample of US based NGOs with foreign aid activities. OLS and 2SLS estimations indicate that donors hardly make use of publicly available information on NGO characteristics, notably the “price of giving” and the degree of specialization, when deciding on donations. They rather rely on the frequently offered option to designate donations to preferred purposes – even though this behavior would be rational only under conditions that are unlikely to hold.

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Bibliographic Info

Paper provided by Courant Research Centre PEG in its series Courant Research Centre: Poverty, Equity and Growth - Discussion Papers with number 72.

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Date of creation: 14 Feb 2011
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Handle: RePEc:got:gotcrc:072

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Keywords: non-governmental organizations; specialization; private donations; informed choices; price of giving; option to designate;

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  1. James Andreoni & A. Abigail Payne, 2003. "Do Government Grants to Private Charities Crowd Out Giving or Fund-raising?," American Economic Review, American Economic Association, American Economic Association, vol. 93(3), pages 792-812, June.
  2. David T. Yi, 2010. "Determinants of fundraising efficiency of nonprofit organizations: evidence from US public charitable organizations," Managerial and Decision Economics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 31(7), pages 465-475.
  3. Okten, Cagla & Weisbrod, Burton A., 2000. "Determinants of donations in private nonprofit markets," Journal of Public Economics, Elsevier, Elsevier, vol. 75(2), pages 255-272, February.
  4. Riber, D.C. & Wilhelm, M.O., 1996. "Altruistic and Joy-of-Giving Motivations in Charitable Behavior," Papers, Pennsylvania State - Department of Economics 1-96-4, Pennsylvania State - Department of Economics.
  5. Bilodeau, Marc & Slivinski, Al, 1997. "Rival charities," Journal of Public Economics, Elsevier, Elsevier, vol. 66(3), pages 449-467, December.
  6. Garth Heutel, 2014. "Crowding Out and Crowding In of Private Donations and Government Grants," Public Finance Review, , , vol. 42(2), pages 143-175, March.
  7. Rose-Ackerman, Susan, 1982. "Charitable Giving and "Excessive" Fundraising," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 97(2), pages 193-212, May.
  8. Eric Werker & Faisal Z. Ahmed, 2008. "What Do Nongovernmental Organizations Do?," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 22(2), pages 73-92, Spring.
  9. Payne, A. Abigail, 1998. "Does the government crowd-out private donations? New evidence from a sample of non-profit firms," Journal of Public Economics, Elsevier, Elsevier, vol. 69(3), pages 323-345, September.
  10. Aldashev, Gani & Verdier, Thierry, 2010. "Goodwill bazaar: NGO competition and giving to development," Journal of Development Economics, Elsevier, Elsevier, vol. 91(1), pages 48-63, January.
  11. Khanna, Jyoti & Sandler, Todd, 2000. "Partners in giving:: The crowding-in effects of UK government grants," European Economic Review, Elsevier, Elsevier, vol. 44(8), pages 1543-1556, August.
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Cited by:
  1. Meer, Jonathan, 2014. "Effects of the price of charitable giving: Evidence from an online crowdfunding platform," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 103(C), pages 113-124.

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