Organizing in the shadow of donors: How donations market regulates the governance practices of sponsored projects in non-governmental organizations

Abstract

The purpose of this study is to analyze the influence of donors in the organization of governance practices of sponsored projects in non-governmental organizations (NGOs) from an agency theory perspective. For this, the sponsored project was understood as a temporary organization. The study relied on data collected through document survey in contracts and call for tenders for project support, and on semi-structured interviews with executives from donor organizations in a Latin America country. The study found that the governance of NGOs is impacted by temporary governance derived from projects. In turn, the projects are circumvented by aspects of compliance and enforcement through pressure from donors, and transferring donor management processes to NGOs produces two shadows over NGOs: (a) there is a public organizations’ influence of laws, norms and actions of state decentralization that demands NGOs to organize themselves like the State; and, (b) on the corporate donors side, an organization aligned with business is required.