Going the Extra Mile: The Liability of Foreignness in U.S. Foundation International Grantmaking to Local NGOs

Abstract

Local nongovernmental organizations (local NGOs) based in less economically advanced countries suffer from a “liability of foreignness” in attracting international funding: They are geographically, linguistically, and culturally distant from funders in more economically advanced countries. As a result, although U.S. foundations gave 27,572 grants to support programming occurring within less economically advanced countries between 2000 and 2012, only 10.4% went to local NGOs within those areas. We argue that while favoring NGOs in more economically advanced countries minimizes funder-NGO foreignness, or the distance between the foundation and the grantee NGO, it increases NGO-programming foreignness, or the distance between the grantee NGO and the site of their programming, creating crucial trade-offs. We draw upon organizational theory to predict under what conditions U.S. foundations would fund local NGOs, finding that local NGOs receive more support from older foundations and those with greater geographic and program area experience. Furthermore, local NGOs receive larger, longer grants but with lower probabilities of being renewed. These results identify the conditions under which foundations “go the extra mile” and fund local NGOs.