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Private Donations, Government Grants, Commercial Activities, and Fundraising: Cointegration and Causality for NGOs in International Development Cooperation

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  • Herzer, Dierk
  • Nunnenkamp, Peter

Abstract

NGOs could help scale up foreign aid efforts by mobilizing private donations. However, fundraising activities do not necessarily result in higher donations, and substitution effects between different sources of revenue may diminish the overall pool of NGOs’ resources. This paper examines the long-run determinants of private donations to US-based NGOs engaged in international development cooperation using panel cointegration techniques. According to our results, a marginal dollar spent on fundraising yields almost five dollars in new donations in the long-run. Government grants crowd in private donations in the long-run, whereas commercial revenues crowd out donations in the long-run.

Suggested Citation

  • Herzer, Dierk & Nunnenkamp, Peter, 2013. "Private Donations, Government Grants, Commercial Activities, and Fundraising: Cointegration and Causality for NGOs in International Development Cooperation," World Development, Elsevier, vol. 46(C), pages 234-251.
    • Handle: RePEc:eee:wdevel:v:46:y:2013:i:c:p:234-251
    DOI: 10.1016/j.worlddev.2013.02.010
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    3. Jäger, Philipp & Schmidt, Torsten, 2016. "The political economy of public investment when population is aging: A panel cointegration analysis," European Journal of Political Economy, Elsevier, vol. 43(C), pages 145-158.
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    5. Jakub Dostál, 2021. "Assigning a Value to Volunteering in Requests for Proposals," SAGE Open, , vol. 11(2), pages 21582440211, April.
    6. Banks, Nicola & Hulme, David & Edwards, Michael, 2015. "NGOs, States, and Donors Revisited: Still Too Close for Comfort?," World Development, Elsevier, vol. 66(C), pages 707-718.
    7. Herzer, Dierk & Nunnenkamp, Peter, 2013. "Private Donations, Government Grants, Commercial Activities, and Fundraising: Cointegration and Causality for NGOs in International Development Cooperation," World Development, Elsevier, vol. 46(C), pages 234-251.
    8. Tahir Mahmood Ali & Sana Gull, 2016. "Government Funding to the NGOs," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 5(6), pages 51-61, October.
    9. Öhler, Hannes, 2013. "Do Aid Donors Coordinate Within Recipient Countries?," Working Papers 0539, University of Heidelberg, Department of Economics.
    10. Kunal Y. Sevak & LaKami Baker, 2022. "Need‐resource indicators and nonprofit human services organization density," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 93(1), pages 129-160, March.
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    12. Gallemore, Caleb & Jespersen, Kristjan, 2016. "Transnational Markets for Sustainable Development Governance: The Case of REDD+," World Development, Elsevier, vol. 86(C), pages 79-94.
    13. Hagen, Rune Jansen, 2014. "Rents and the Political Economy of Development Aid," Working Papers in Economics 07/14, University of Bergen, Department of Economics.

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    More about this item

    Keywords

    nongovernmental organizations; development cooperation; private donations; panel cointegration;
    All these keywords.

    JEL classification:

    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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