Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/58279
Authors: 
Herzer, Dierk
Nunnenkamp, Peter
Year of Publication: 
2012
Series/Report no.: 
Kiel Working Papers 1769
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 determinants of private donations to US-based NGOs engaged in international development cooperation. We employ panel cointegration and causality techniques to analyze the interactions between private donations, government grants, commercial revenues and fundraising expenditures. 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. Moreover, our panel vector error correction model reveals complex short-run dynamics.
Subjects: 
non-governmental organizations
development cooperation
private donations
panel cointegration
JEL: 
L31
F35
C23
Document Type: 
Working Paper

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