Daniel Walker and Dr. Michael Findley, Political Science Department
Abstract
Recent literature dealing with nongovernmental organizations (NGOs) claims that NGOs have little incentive to base their decisions and strategies on local needs and instead are governed largely by their current and prospective donors (McGann and Johnstone 2006; Prakash and Gugerty 2010; Bollen et al 2005). To test this claim, I used my ORCA grant to create a quantitative experiment in the US and Uganda in which organizations were randomly assigned to a control group or one of four treatment groups based on the main stakeholders of the NGO market—donors, local government officials, project beneficiaries, and NGO peers. In each group, organizations were invited to take a survey and were told that the results of their survey would be published to one of these four stakeholder groups. Thus, differences in response rates between groups are attributed to differences in the degree of concern that NGOs felt about the opinions of a given stakeholder. I hypothesized that NGOs care more about the opinions of their donors than other stakeholder groups and found support for this hypothesis among NGOs in the US.
Summary
Do NGOs care about the opinions of their donors more than other stakeholders such as their beneficiaries, local government officials, and/ or NGO peers? McGann and Johnstone argue that, “The current body of literature…has not examined the problems created by what can be called a crisis of transparency and accountability, an issue that looms on the horizon for the entire NGO sector” (2006, 66). Such a crisis leads to the possibility that NGOs value the opinions of their donors more than the opinions of other stakeholder groups, even their own beneficiaries.
Current literature supports this possibility: Prakash and Gugerty note that, “Arguably, nonprofits should [be] evaluated in terms of their success in achieving their mission of serving beneficiaries. [However], the reality of resource dependence suggests that donors’ preferences often take precedence. [Excessive] concerns regarding accountability to donors might lead some nonprofits to neglect their responsibility towards beneficiaries” (2010, 4). If such accountability structures exist, they could definitely distract NGOs from assessing and achieving local goals. However, the literature has only addressed these issues in theory and limited qualitative analysis. In this study, I seek to empirically test whether NGOs prioritize donors over beneficiaries.
With my ORCA grant, I performed a randomized field experiment by gathering contact information from organizations in both the US and Uganda and randomly assigned them into control and treatment conditions. In each group, NGOs were invited to take a short survey and told that the results of this survey would be published to a certain stakeholder—donors, government officials, beneficiaries, or NGO peers—by way of an online database. Response rates within each randomized stakeholder group were then compared to each other to learn to which stakeholder NGOs were most interested in reaching with the information. Response rates were lower than hoped within each sample; however, there are some tentative outcomes of interest and some unexpected findings that have potentially fascinating implications for follow-up research.
Accountability prioritizing is expected due to information asymmetries in the market. On the stakeholder side, a lack of coordination among NGOs to standardize accountability mechanisms yields only contextual knowledge about NGO activities. Thus, stakeholders are forced to base funding decisions on incomparable criteria. On the NGO side, a lack of coordination among stakeholders to standardize selection techniques leads to a broad spectrum of stakeholder goals and expectations. Thus, NGOs are forced to prioritize their accountability practices as they seek to appease multiple stakeholder groups simultaneously. Both of these market attributes—fluctuant funding decisions and multiple accountability structures—give NGOs strong incentives to focus resources on the most cost-effective option among stakeholder groups which, in this case, is the donor group.
Due to this theoretical framework, the singular hypothesis of this study is that NGOs would respond most if they thought their surveys were being published to donors in comparison to the other stakeholder groups. However, I was surprised to find that while this hypothesis found support in the US sample, it did not in the Ugandan sample.
This study was used as a writing sample in my applications for graduate school. It was also submitted to a BYU student publication (the BYU Political Review), though in a condensed form.
References
- Banerjee, Abhijit Vinayak. 2007. Inside the machine: Toward a new development economics. Boston Review 32, no. 2:12-18.
- Barr, Abigail, Marcel Fafchamps, and Trudy Owens. 2004. The governance of non-governmental organizations in Uganda. Forthcoming (August). Oxford University.
- Bollen, K., P. Paxton, and R. Morishima. 2005. Assessing international evaluations: An example from USAID’s Democracy and Governance Program. American Journal of Evaluation 26, no. 2:189-203.
- Ebrahim, Alnoor. 2003. Accountability in practice: Mechanisms for NGOs. World Development 31, no. 5:813–829.
- Johnson, Erica and Aseem Prakash. 2006. NPNGO research program: A collective action perspective. Prepared for presentation at the Annual Convention of The Midwest Political Science Association, Chicago (April).
- McGann, James and Mary Johnstone. 2006. The Power Shift and the NGO Credibility Crisis. The International Journal of Not-for-Profit Law 8, no. 2 (January).
- Prakash, Aseem and Mary Kay Gugerty. 2010. Trust but verify? Voluntary regulation programs in the nonprofit sector. Regulation and Governance 4, no. 1. Forthcoming.