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National Sovereignty and Transnational Philanthropy: The Impact of Countries’ Foreign Aid Restrictions on US Foundation Funding

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Abstract

Foundations are often criticized as organizations of elite power facing little accountability within their own countries. Simultaneously, foundations are transnational actors that send money to, and exert influence on, foreign countries. We argue that critiques of foundation power should expand to include considerations of national sovereignty. Recently, countries across the globe have introduced efforts to restrict foreign aid, wary of the foreign influences that accompany it. However, it is unknown whether these restrictions impact foundation activity. With data on all grants from US-based foundations to NGOs based in foreign countries between 2000 and 2012, we use a difference-in-difference statistical design to assess whether restrictive laws decrease foundation activity. Our results suggest that restrictive laws rarely have a significant negative effect on the number of grants, dollars, funders, and human rights funding to a country. These results call for attention to considerations of foundation accountability in a transnational context.

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Notes

  1. We understand that this is not an ideal classification system but allows for direct comparisons to similar studies (ex. Dupuy et al. 2016).

  2. This is not a simple cause and effect. Dupuy et al. (2016) try to predict passage of restrictive laws in low- and middle-income countries and find that the amount of development aid received in an election year is positively related to the passage of restrictive laws.

  3. This is the same dataset used by Dupuy and Prakash (2018) that showed significant decreases in bilateral and multilateral aid.

  4. We run separate models by country income to address any potential differences in coding and identification from Dupuy et al. (2016).

  5. While our theoretical section focuses more on private foundations than public charities, we are unaware of any restrictive law that differentiates between the two. We include public charities because the concerns regarding foundation power frequently extend to re-granting public charities (Grønbjerg 2006), donor-advised funds at public charities are a crucial part of private, elite philanthropy (Madoff 2016), and re-granting public charities have an increasingly relevant role in global philanthropy (Gunther 2017). We run a sensitivity analysis excluding public charities from the dataset and receive identical results.

  6. Changing the year we use to assign income classification, for both restricting countries and non-restricting countries, does not change results.

  7. When grants and dollars are not transformed, the coefficients lose precision and significance.

  8. We tested the rates of funding toward other issue areas and received consistent, insignificant results.

  9. Alternative imputation procedures, and removing country-years with no data, do not change results.

  10. Modeling time as different polynomial functions did not change results.

  11. We do not spend much time analyzing this result. Due to Qatar and Bahrain’s geographic, historical, and governmental similarities, as well as the commonality that they received no foundation grants prior to the passage of their law, we hesitate to over interpret the significant finding in this model.

  12. A sensitivity analysis checking for potential lagged effects saw increasingly weak effects over time. The laws seem to have their largest effects immediately.

  13. While our dataset had more detailed information on foundation grants, such few grants went to each country each year that attempts to analyze characteristics of foundations were characterized by high variation and insignificant findings. We do lack crucial information on recipient domestic NGOs in our data, but NGO traits are also likely to see high variation in our models. Qualitative data could be valuable to understand the impact of these laws on different NGO- and foundation-level traits.

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  1. Carrie R. Oelberger and Simon Y. Shachter have contributed equally to this work.

Authors and Affiliations

  1. Humphrey School of Public Affairs, University of Minnesota, Minneapolis, MN, 55454, USA

    Carrie R. Oelberger

  2. Department of Sociology, University of Chicago, Chicago, IL, 60637, USA

    Simon Y. Shachter

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  1. Carrie R. Oelberger
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Correspondence to Carrie R. Oelberger.

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Oelberger, C.R., Shachter, S.Y. National Sovereignty and Transnational Philanthropy: The Impact of Countries’ Foreign Aid Restrictions on US Foundation Funding. Voluntas 32, 204–219 (2021). https://doi.org/10.1007/s11266-020-00265-y

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