{"id":3743,"date":"2026-11-09T09:04:33","date_gmt":"2026-11-09T09:04:33","guid":{"rendered":"https:\/\/www.ub.edu\/beat\/?p=3743"},"modified":"2026-11-09T12:21:21","modified_gmt":"2026-11-09T12:21:21","slug":"badngo","status":"publish","type":"post","link":"https:\/\/www.ub.edu\/beat\/badngo\/","title":{"rendered":"Bad NGOs? Competition in the Market for Donations and Workers\u2019 Misconduct"},"content":{"rendered":"[vc_row type=”in_container” full_screen_row_position=”middle” scene_position=”center” text_color=”dark” text_align=”left” overlay_strength=”0.3″][vc_column column_padding=”no-extra-padding” column_padding_position=”all” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” width=”1\/1″ tablet_text_alignment=”default” phone_text_alignment=”default” column_border_width=”none” column_border_style=”solid”][vc_column_text]Ester Manna<\/a> (with Nadia Burani)\u00a0<\/span>\u00a0<\/span><\/p>\n

Since the late twentieth century, non-governmental organizations (NGOs) have become major players in delivering health, education, and human services in developing countries, channeling over 15 percent of total overseas development aid, roughly $15 to $20 billion annually (Aldashev and Navarra 2018; World Bank 2013). Yet, despite their altruistic mission, the aid sector is not immune to severe governance failures.\u00a0<\/span>\u00a0<\/span><\/p>\n

When the 2018 Oxfam Haiti scandal broke, investigations revealed that charity staff had sexually exploited vulnerable beneficiaries following the 2010 earthquake, and that the organization had failed to adequately report the allegations. Within months, Oxfam GB lost roughly 7,000 regular donors, had its funding suspended by the UK government and the European Commission, and lost \u00a316 million. More importantly, the public debate that followed suggested that worker misconduct, and its concealment, was not an isolated incident. Observers pointed to a wider systemic problem tied to the fierce race for funding, which pressures charities to present a spotless record of success to donors at all costs.\u00a0<\/span>\u00a0<\/span><\/p>\n

Why do organizations dedicated to “doing good” struggle to prevent employees from “doing bad”? Existing economic research has examined how competition among charities can lead to excessive fundraising expenses or the diversion of funds (Aldashev and Verdier 2010), and how unethical workers sort between for-profit and non-profit sectors (Auriol and Brilon 2014). In our recent article in <\/span>The Journal of Industrial Economics<\/span><\/i> (<\/span>Burani and Manna 2026<\/span><\/a>), we examine a less explored channel: how competition for donations shapes the internal incentives NGOs give their staff, and why this competition makes scandals harder to prevent.\u00a0<\/span>\u00a0<\/span><\/p>\n

When “Doing Good” Creates Opportunities for “Doing Bad”<\/span><\/b>\u00a0<\/span>\u00a0<\/span><\/p>\n

Development NGOs are led by mission-driven leaders who care deeply about project quality, yet they rely on donors who cannot directly observe day-to-day field operations. On the ground, execution is delegated to aid workers who can engage in two types of activities:\u00a0<\/span>\u00a0<\/span><\/p>\n