The reputation trap of NGO accountability

Abstract

Can concerns for one’s reputation cause non-governmental organizations (NGOs) to alter their behavior to the detriment of achieving their policy goals? To answer this question, we explore the relationship between NGOs and their donors. Our theoretical model reveals that reputation can be a key piece of information in the decision to fund an NGO’s activities. Reputation can become so important to the NGO’s survival that it interferes with the long-term policy goals of the organization. As such, reputations can become a double-edged sword, simultaneously providing the information donors seek while constraining NGOs from realizing policy goals. We apply this logic to the problem of NGO accountability, which has received increasing attention in recent years, and demonstrate that the tools used by donors to improve accountability can trigger unintended consequences. We illustrate this strategic dynamic with two types of NGO activity: water improvement and international crisis mediation.