How do nonprofits with government funding differ from those without? Though the question is straightforward, very few studies have investigated the issue (Stone et al 2001; Suárez 2012).  Research on foreign aid tends to be linked to international relations and foreign policy rather than to public management. The paucity of research on the correlates of government funding is surprising because it can help to clarify how bureaucrats utilize performance information and demonstrate how management matters in a cross-sector context (Heinrich 1999; Moynihan and Pandey, 2010). Empirical work on the topic can also begin to address whether or not governments are “smart buyers,” illuminating the structural nonprofit characteristics associated with having government support (Kettl 1993; Garrow 2012).

Developing a better understanding of government support for nonprofits is as important at the transnational level as it is at the local or national level (Mitchell 2013). Evidence suggests that foreign aid can contribute to economic growth and democratization under certain conditions, but debates exist about how best to achieve those dual goals. The growing utilization of nonprofit organizations (NGOs) in the delivery of foreign aid indicates that transnational relationships between governments and service-providing organizations may be starting to resemble “partnerships in public service” in Western countries.

Based on a dataset constructed from 135 interviews with leaders of local and international nonprofits operating in Cambodia, we explore the characteristics of nonprofits associated with government funding. We find that professionalized nonprofits are more likely to have funding than nonprofits with less educated and less trained staff. We also find that governments tend to fund nonprofits with a robust set of monitoring and evaluation practices, suggesting that governments pay attention to the collection of performance information in nonprofits. Finally, our results demonstrate that organizations with funding from international nonprofits are less likely to procure government funding, and donor agencies do not prioritize funding for “indigenous” nonprofits or organizations staffed primarily by locals.  These findings suggest that governments utilize professionalization and performance information as signals for capacity, but they also raise questions about the relationship between development projects and the growth of local civil society.

Garrow, Eve. 2011. “Receipt of Government Revenue among Nonprofit Human Service Organizations.” Journal of Public Administration Research and Theory 21(3).

Heinrich, Carolyn J. 1999. “Do Government Bureaucrats Make Effective Use of Performance Management Information?” Journal of Public Administration Research and Theory9(3).

Kettl, Donald. 1993. Sharing Power: Public Governance and Private Markets. Washington, D.C.: Brookings.

Mitchell, George E. 2013. “Collaborative Propensities Among Transnational NGOs Registered in the United States.” American Review of Public Administration, forthcoming.

Moynihan, Donald, and Sanjay Pandey. 2010. “The Big Question for Performance Management: Why do Managers Use Performance Information?” Journal of Public Administration Research and Theory20(3). 

Stone, Melissa, Mark Hager, and Jennifer Griffin. 2001. “Nonprofit Organizational Characteristic and Funding Environments: A Study of a Population of United Way-Affiliated Nonprofits.” Public Administration Review61.

Suárez, David. 2011. “Collaboration and Professionalization: The Contours of Public Sector Funding for Nonprofit Organizations.” Journal of Public Administration Research and Theory 21(2).