Managing Large Donor Influence

ABSTRACT Private organizations that produce public goods often receive offers for funding from large donors who seek to influence the nature of produced. We consider a model in which potential donor creates commitment problem organization sense that, an ex ante perspective, sets price too low given opportunity cost. Our analysis identifies determinants likelihood and assesses various mechanisms can alleviate or exploit problem—greater transparency, leadership preferences and/or incentives, targeted small campaigns. Finally, we assess how option walk back influential contributions inability commit longer-term agreements with alters implications influence. JEL Classifications: D64; L31.