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Small is Beautiful: Motivational Allocation in the Non-Profit Sector

Gani Aldashev (), Esteban Jaimovich () and Thierry Verdier ()

No ECARES 2016-02, Working Papers ECARES from ULB -- Universite Libre de Bruxelles

Abstract: We build an occupational-choice general-equilibrium model with for-pro t rms, non-pro torganizations and endogenous private warm-glow donations. Lack of monitoring on the use offunds implies that an increase of funds of the non-pro t sector (because of a higher incomein the for-pro t sector, a stronger preference for giving, or an inflow of foreign aid) worsensthe motivational composition and performance of the non-pro t sector. We also analyze theconditions under which donors (through linking donations to the motivational composition of thenon-pro t sector), non-pro ts themselves (through peer monitoring), or the government (usinga tax- nanced public funding of non-pro ts) can eliminate the low-e¤ectiveness equilibrium. Wepresent supporting case-study evidence from humanitarian emergencies and developing-countryNGOs.

Keywords: non-profit organizations; charitable giving; altruism; occupational choice; foreign aid (search for similar items in EconPapers)
JEL-codes: L31 D64 J24 D50 (search for similar items in EconPapers)
Date: 2016-01
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Related works:
Journal Article: Small is Beautiful: Motivational Allocation in the Nonprofit Sector (2018) Downloads
Working Paper: Small is Beautiful: Motivational Allocation in the Nonprofit Sector (2017)
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