Hands in the Pockets of Mercurial Donors

Abstract

The NGO–donor relationship is especially volatile. NGOs in developing countries heavily rely on foreign donor funding and donor dominance is evident. This article explores the relationship at times when donors revise funding priorities and partner NGOs try to adapt. The article draws on qualitative research of multiple observations to study the decisions of four NGOs in response to several shifts in donor funding. The analysis reveals variation in NGO responses to such shifts: suspend the relationship, reach common ground, automatically execute the donor’s interests, and voluntarily and deliberately adapt to the situation. Building on Hirschman’s typology, four modes of NGOs’ response are identified: exit, voice, loyalty, and, a newly proposed mode, adjustment. Additional interpretation of NGOs’ responses and possible implications for NGO management are discussed.