Selling Virtue: How Human Rights NGOs and Their Donors Work Together to Create a Better World...for Themselves
Because human rights nongovernmental organizations (HRNGOs) must respond to financial incentives in order to survive, understanding what motivates donors to make contributions to charity is mandatory for an accurate theory of HRNGO behavior. A large body of research spanning psychology, economics, and biology demonstrates that individuals donate to charity to send a costly signal, conspicuously displaying their socially desirable traits in order to attract and maintain allies and mates. Donations are investments in the donor’s reputation, intended to confer status benefits on the donor rather than to finance the effective production of public benefits. In exchange for donor funds, HRNGOs supply services that have the spirit of benefiting others (e.g. campaigns, reports, protests, boycotts) but ultimately serve to benefit the donor’s reputation by helping the donor appear virtuous. The beneficiary of NGO programs is not a central player in the economic exchange between donor and NGO.
I combine social signaling theory and the reality of market competition to develop a new framework for analyzing the behavior of HRNGOs. I use this new framework to explain why donors are not interested in or responsive to information about charity effectiveness and how donor preferences influence the organizational behavior of human rights NGOs.
My first empirical chapter employs a series of preregistered survey experiments to test several theoretical expectations from my new framework. The experiments test whether individuals financially reward charities for conducting randomized trials of their programs and revealing the evidence. My findings demonstrate that (1) donors do not reward the process of learning which programs are effective. They punish NGOs when they use certain kinds of experimental methods, such as randomized controlled trials, to determine whether to implement a certain program. (2) Donors do not reward exceptionally positive impact, but they do
punish charities that admit their programs did not work. Donors only reward a charity for revealing information about its impact when the results are completely unrealistic. (3) Donors are more sensitive to information about administrative overhead – information that is, in fact, irrelevant to NGO impact – than they are to direct information about impact. An NGO that saves more lives per dollar than any known charity would see donations plummet if donors found out it provided high-paying salaries and benefits to its employees.
The findings illuminate (1) why HRNGOs abstain from rigorously evaluating their impact, (2) why they conceal honest information about their impact from donors and other organizations, (3) why they exaggerate their impact, and (4) why the accountability movement does not hold HRNGOs accountable to standards of effectiveness. Put simply, donors reward this deceptive behavior because it is conducive to social signaling.
My second empirical chapter looks in depth at the monitoring, evaluation, and learning systems of HRNGOs. I find that they are not designed to produce unbiased or impartial information about program effectiveness. Instead, they are designed to help the organization appear effective using clever marketing, branding, rhetoric, and anecdotal stories about individuals. HRNGOs rarely, if ever, disclose the results from their evaluations or implement evaluations that meet a high standard of evidence. My third empirical chapter analyzes the NGO accountability movement. I find that accountability groups do not hold HRNGOs accountable to standards of performance, impact, or effectiveness - despite marketing themselves as such. While they demand information from NGOs regarding a myriad of issues related to how they run their organizations, they do not demand evidence of impact.
In combination, my dissertation demonstrates that nobody involved the NGO supply chain holds HRNGOs accountable to being effective: not donors, accountability organizations, or NGOs themselves. Because human rights NGOs and their donors are working together to pursue their self-interest, the welfare outcomes of program recipients take a back seat to their more central goals: building reputation, earning social credit, winning friends, and attracting mates.
I combine social signaling theory and the reality of market competition to develop a new framework for analyzing the behavior of HRNGOs. I use this new framework to explain why donors are not interested in or responsive to information about charity effectiveness and how donor preferences influence the organizational behavior of human rights NGOs.
My first empirical chapter employs a series of preregistered survey experiments to test several theoretical expectations from my new framework. The experiments test whether individuals financially reward charities for conducting randomized trials of their programs and revealing the evidence. My findings demonstrate that (1) donors do not reward the process of learning which programs are effective. They punish NGOs when they use certain kinds of experimental methods, such as randomized controlled trials, to determine whether to implement a certain program. (2) Donors do not reward exceptionally positive impact, but they do
punish charities that admit their programs did not work. Donors only reward a charity for revealing information about its impact when the results are completely unrealistic. (3) Donors are more sensitive to information about administrative overhead – information that is, in fact, irrelevant to NGO impact – than they are to direct information about impact. An NGO that saves more lives per dollar than any known charity would see donations plummet if donors found out it provided high-paying salaries and benefits to its employees.
The findings illuminate (1) why HRNGOs abstain from rigorously evaluating their impact, (2) why they conceal honest information about their impact from donors and other organizations, (3) why they exaggerate their impact, and (4) why the accountability movement does not hold HRNGOs accountable to standards of effectiveness. Put simply, donors reward this deceptive behavior because it is conducive to social signaling.
My second empirical chapter looks in depth at the monitoring, evaluation, and learning systems of HRNGOs. I find that they are not designed to produce unbiased or impartial information about program effectiveness. Instead, they are designed to help the organization appear effective using clever marketing, branding, rhetoric, and anecdotal stories about individuals. HRNGOs rarely, if ever, disclose the results from their evaluations or implement evaluations that meet a high standard of evidence. My third empirical chapter analyzes the NGO accountability movement. I find that accountability groups do not hold HRNGOs accountable to standards of performance, impact, or effectiveness - despite marketing themselves as such. While they demand information from NGOs regarding a myriad of issues related to how they run their organizations, they do not demand evidence of impact.
In combination, my dissertation demonstrates that nobody involved the NGO supply chain holds HRNGOs accountable to being effective: not donors, accountability organizations, or NGOs themselves. Because human rights NGOs and their donors are working together to pursue their self-interest, the welfare outcomes of program recipients take a back seat to their more central goals: building reputation, earning social credit, winning friends, and attracting mates.