Do Government and Foreign Funding Influence Individual Donations to Religious Nonprofits? A Survey Experiment in Pakistan

Donors support faith-based organizations whose missions and work cohere with their religious values. Might such donors located in the local community be less likely to donate to a hypothetical Madrasa, an Islamic seminary providing K-12 education, which receives funding from non-local sources, specifically the federal government or foreign donors? We examine this question using a survey experiment in Lahore, Pakistan. Because some Madrasa students have indulged in acts of terrorism, the government of Pakistan has offered Madrasas financial assistance to secularize their curriculums. Most Madrasas, however, have refused government funding because they fear it will harm their reputations in the local community for piety and religious training. Alongside, several foreign donors also provide funds to Madrasas, some to aid governmental reform efforts, and others for religious reasons. Based on the survey of 530 respondents, we find that acceptance of government funding does not diminish the respondents’ willingness to donate to the hypothetical Madrasa. Additionally, we find modest evidence that willingness to donate diminishes when the Madrasa accepts money from donors in Saudi Arabia and the United States (but not Germany).