How does funding influence sectoral and geographic spread of NGOs?


Published 04.11.20

NGOs compete for donor attention and funding; this can influence what they choose to focus on and lead to clustering around more attractive projects.

Read “Samaritan Bundles: Fundraising competition and inefficient clustering in NGO projects” by Gani Aldashev, Marco Marini and Thierry Verdier here.

Certain kinds of NGO-led development projects attract more funding and media attention than others. Child sponsorship or microcredit schemes, for instance, tend to be 'hotter' than rehabilitation projects. To what extent does this knowledge affect the fundraising agenda of NGOs? What causes NGOs to 'cluster' around specific causes in favour of others? And what can be done to diversify NGO (and donor) attention?

In this VoxDevTalk, Thierry Verdier examines the motivations of NGO competition and its impact on the development sector, of which NGOs are a significant part. Competition for funding routinely induces NGOs to systemically undercover 'Cinderella projects', which remain chronically underfunded. Is the solution to this problem better coordination on fundraising activities between NGOs or is it government intervention? In a new research paper, he and his co-authors Gani Aldashev and Marco Marini look at aid data to analyse NGO clustering around certain sectors and geographic regions and propose possible mechanisms that influence such behaviour.