Abstract
NGOs compete in mission statements. Opportunities for impact vary across issues-NGOs with broader missions expect to execute higher-impact projects but provide less precision to donors as to the sorts of projects that will be funded. This matters if donors have preferences amongst issues. The mission-design problem faced by an impact-motivated NGO is analyzed. Interestingly, expected donations are non-monotonic in mission-width. A monopoly NGO engages in "donor-stretching," choosing a mission statement that includes issues not preferred by any of its donors, but still narrower than socially desirable. Under free entry, issue-widths are strategic complements amongst NGOs. In equilibrium there are too many NGOs, each with too narrow a mission. The issue-space is exactly donor-covered (all donors will have an NGO they wish to give to) but issue over-covered (mission statements overlap). Expected NGO impact is higher for issues at the periphery of any particular NGO's issue-domain, which is socially inefficient.
| Original language | English |
|---|---|
| Pages (from-to) | 197-210 |
| Number of pages | 14 |
| Journal | Journal of Economic Behavior and Organization |
| Volume | 119 |
| DOIs | |
| Publication status | Published - 1 Nov 2015 |
Bibliographical note
Funding Information:We are grateful to colleagues at the LSE, UCL, McGill University, WCERE (Istanbul 2014), the Public Choice Society Annual Conference (Charleston 2014) and two referees and an editor of this journal for constructive advice. We acknowledge the generous financial support of SSHRC under its Insight Program (Grant Number 435-2012-472 ) and the Canada Research Chairs Program in the execution of this research. Errors are ours.
Publisher Copyright:
© 2015.
Keywords
- Donations
- Mission statement design
- NGOs
ASJC Scopus subject areas
- Economics and Econometrics
- Organizational Behavior and Human Resource Management