When the Customer Isn’t Right: How Unsupportive Donor Demands Lead to Ineffective NGO Practices

Abstract

Recent literature has criticized non-governmental organizations (NGOs) and their activities on three main grounds: (1) NGOs incur higher-than-necessary overhead costs, (2) NGOs do not coordinate to distribute activities and projects according to beneficiary needs, and (3) NGO evaluation methods and results are biased. To discover the source of these inefficiencies, I interviewed the leaders of 34 NGOs in Kampala, Uganda. Based on trends in their responses, I argue that supposed NGO inefficiencies are actually logical reactions to strategies NGO donors employ. First, because donor financial commitments are sporadic, NGOs prioritize organizational spending, causing overheads to be higher than expected. Second, a lack of donor agreement on local needs leads NGOs to adopt client-specific objectives, leading to a lack of needs-based NGO project distribution. Third, because donors prioritize positive information in the short-term, NGOs have large incentives to deliver exclusive and/or biased data.

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