The Determinants of Funding to African NGOs

Using original Ugandan data collected by the authors, we examine the determinants of funding to local NGOs. We …nd that success in attracting grants from international donors depends mostly on network e¤ects. In contrast, NGOs that raise in-kind resources locally tend to be young NGOs managed by someone who is simultaneously employed elsewhere. We …nd some evidence of crowding-out: NGOs that receive grant funding are less likely to obtain resources locally, whether in cash or in kind. But this evidence seems to be primarily the result of selection: once we control for NGO …xed e¤ects, we …nd no evidence that NGOs receive less revenue from fees and donation after obtaining a grant. These results suggest that donors regard Ugandan NGOs as sub-contractors of their developmental e¤ort, not as charitable organizations in their own right. JEL codes: O19, O12 Keywords: NGO, Africa, international development assistance, non-pro…t organizations We thank to the World Bank and the Japanese government for funding this research. We also would like to thank Professor Sam Tulya-Muhika, Kintu Nyago, and their team of enumerators for assisting with data collection. We are grateful to Peter Ssentongo from the O¢ ce of the Prime Minister and Mary Bitekerezo from the Kampala World Bank o¢ ce for their assistance and comments. We are very grateful to Abigail Barr for her very valuable comments and for her assistance with data collection, cleaning, and preparation. The support of the Economic and Social Research Council (UK) is gratefully acknowledged. The work is part of the programme of the ESRC Global Poverty Research Group. yDepartment of Economics, University of Oxford, Manor Road, Oxford OX1 3UQ. Email: marcel:fafchamps@economics:ox:ac:uk. Fax: +44(0)1865-281447. Tel: +44(0)1865-281446.