Journal of Theoretical Politics 21(3): 283309 The Author(s), 2009. DOI: 10.1177/0951629809103965 Reprints and permissions: http://jtp.sagepub.com http://www.sagepub.co.uk/journalsPermissions.

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MATCHING DONORS AND NONPROFITS

THE IMPORTANCE OF SIGNALING IN FUNDING AWARDS

Gina Yannitell Reinhardt

ABSTRACT The topic of nonprot reform has sparked a debate on the battle between efciency and effectiveness. Why do ineffective nonprots survive? Prospective donors favor applicants likely to fulll donor priorities. Donors with limited time and energy look for signals that reveal recipients true capabilities. Knowing this, recipients attempt to send the right signals to prospective donors. If the process of sending and reading signals is efcient, funding decisions will tend toward an optimal outcome in which only effective agencies survive. What signals do donors consider the most helpful? Are organizations that send such signals receiving the highest payoffs? What is the nancial yield of each signal to recipients? This article uses a signaling game to sharpen our understanding of nonprot fundraising and derive the conditions under which signals will be credible. Interview and survey evidence gathered in Brazil indicate that signals of accessibility, reliability, and credibility attract the highest payoffs. KEY WORDS . foreign aid . fundraising . information asymmetry . nonprot . signaling game

Introduction Nonprot organizations efciency and effectiveness have gained increased attention over the past decade. Characterized by Anheier and Salamon (1998) as private, voluntary, self-governing entities that do not prot owners, shareholders, or directors, nonprot studies programs are cropping up in schools of business and public administration around the world. Journals focusing on
Special thanks to Andrew Sobel, Gary Miller, Randall Calvert, the Center for New Institutional Social Sciences, and the American Association of University Women, for providing intellectual and institutional support for this research. Thank you to the organizations and respondents that took part in this study, to the editorial staff and reviewers of the Journal of Theoretical Politics for helpful comments and suggestions, and to Will Reinhardt.

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policy and management are devoting special space to studies of nonprots (see Journal of Policy Analysis and Management, 1998), and websites directing would-be donors to nonprot organizations are proliferating online (e.g. guidestar.org, giveforchange.com, helping.org). Some of this attention is due to the surge in participation in the sector, both in volunteers and employees, as well as the rise in public contracts extended to nonprot organizations (see Light, 2000). Elsewhere, attention has been driven by the concern over the abuse of nonprot funds, a fear released by scandals such as those generated by the resignation of United Way President, William Aramony, in 1992 (see Keating and Frumkin, 2003). These trends together have fueled the topic of nonprot reform the research, debate, media attention, and investigation into how to increase nonprot efciency and effectiveness. Nonprot managers are often pulled by these two countervailing forces; as they strive to be more efcient in operating and maintaining donor relationships, they can lose effectiveness in serving their target populations. This pull is noted by Paul C. Light (2000: 87) in his report on the tides of nonprot management reform, as he cites some concern that scarce resources are being used more to jump through the hoops than actually serve clients. Nonprots thus seek the least costly methods of securing donors, so that as many resources as possible are left to fulll mission goals and serve clients; they must strategically position themselves to appeal to donors (a tendency most notably referenced in Frumkin and Kim, 2001). Conversely, donors try to save time and effort in evaluating potential recipients, looking for clues or indicators, hereafter termed signals, which reveal recipients true capabilities. If the process of sending and reading signals is efcient, funding decisions will tend toward an optimal outcome in which efcient waste is economized. Nonprot organizations that are experienced fundraisers may have learned how to send accurate signals efciently regardless of their effectiveness, but the less experienced may confront problems with both the cost and accuracy of their signals. How do ineffective agencies survive? Why do they continue to get donations? I argue that the survival of ineffective agencies is perpetuated by the nature of the fundraising interaction between donors and recipients. It is not enough to blame a decrease in effectiveness on the quest for efciency. Rather, we must look more carefully at the recipientdonor interaction, which I do by characterizing the problem as one of asymmetric information and modeling it as a signaling game. I nd that in order for a signal to be a credible indicator of nonprot effectiveness, the cost of sending the signal must be differential based on whether or not the recipient is effective. The smaller the grant award, the more likely it will be that only effective organizations will nd that the benet outweighs the cost. Smaller grants will therefore be more likely to differentiate those for whom the signaling cost is low from those for whom it is high. If sending the signal isnt worthwhile to effective recipients, or it is so cheap that either

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type of recipient can send it, nonprots will pool together and be indistinguishable to prospective donors. Formalizing the donorrecipient interaction claries why ineffective agencies persist, and elucidates how donors can manipulate grant sizes to ensure the continual funding of a small group of organizations, to the detriment of organizations attempting to break in to the funding network. I use these theoretical ndings as a springboard for an empirical investigation, in which I present interview and survey data collected from donors and recipients in Brazil that point to a real-world designation of recipient attributes. Respondents indicate that unalterable attributes, such as age or religious afliation, help donors narrow their searches. Donors then turn to alterable attributes, such as professionalism and accountability, as signals to help determine who will receive funding. Multivariate analysis highlights which signals yield the most money, with postestimation of how much money each signal generates. Legally registered organizations with high degrees of donor accessibility attract more money than nonregistered, inaccessible entities. Organizations with strong reputations, and those that undergo third-party audits attract more than double the funds of their competitors. As I nd that donor perceptions of professionalism and accountability condition funding decisions and nonprot behavior, it becomes imperative to explore the implications of the signaling process for nonprot effectiveness. Unless the signals exhibited are differentially costly and correlated with effectiveness, the signaling process bears out a signal-reading system that is efcient according to the constraints of the fundraising system, but possibly suboptimal in terms of overall agency effectiveness at serving core missions. While I do not seek to test the correlations between signals and effectiveness empirically in this piece, by identifying and conrming the existence of signaling strategies in the nonprot world, this article provides an important rst step to understanding how the fundraising process can perpetuate ineffective agencies. Scholars of nonprot management and accountability can additionally benet from the insights into funding cycles, donor motives, and recipient strategies that formalization provides. Practically, managers of donors and nonprot recipient organizations will nd useful information in the results regarding which signals donors target and how much money each signal yields. Finally, this piece represents the application of a canonical signaling model to a new situation of nonprot funding, with original data that expands both bodies of literature.

The Search for Credible Signals Due to the growing competition among nonprot and for-prot organizations, sharpening our understanding of the nonprot fundraising process is important (Young and Salamon, 2003). Much of the literature on funding nonprots

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(McIlnay, 1998; Navarro, 1988), and on the allocation of development assistance (Alesina and Dollar, 2000; Alesina and Weder, 2002), focuses on donor motivations and preferences as determinants of funding allocation. Frumkin and Kim (2001) are an exception, viewing nonprots as strategic in positioning themselves to attract money. In striving to convey certain images to prospective donors, the organizations that compete for national and international funds are active players in the funding arena. Donors and recipients operate in a situation of information asymmetry. Donors seek their ideal recipient, but only recipients know whether or not they truly t a donors ideal. Recipients seek to show donors, before funding occurs, that they are of the donors ideal type, whether they are or not. Donors thus search for credible signals as to recipients true types. Consider the various attributes a nonprot organization might have. Spence (1973) divides attributes into two categories: indices and signals. Indices are unalterable attributes. For a nonprot, an index might be the organizations age or the terms under which it was founded. Signals are alterable attributes they can be manipulated by the organization. Previous literature indicates that attributes nonprots can alter might be their levels of professionalism (see Abramson and McCarthy, 2003) or accountability (Tuckman, 1998; Keating and Frumkin, 2003). It is the combination of alterable and unalterable attributes, or signals and indices, which presents an observable picture of a nonprot to donors. What the donor hopes to glean from this picture is a credible indicator of the organizations true type, and whether or not that type ts the donors ideal. As indices are unalterable, it is through the manipulation of its alterable attributes that a nonprot can signal its type to donors. The task then falls upon the donor to determine which signals are credible indicators of a recipients true type, and which merely signify time spent on trying to achieve the look of a donors ideal. How can one recipient be convincing? Consider the game (Figure 1) between donor (D) and recipient (R). First, nature (N) designates the type of a potential recipient. With probability p, R is the donors ideal (Type I). With probability (1 p), R is not ideal (Type II). The recipient knows its true type; the donor does not. Both know the value of p.1 Assume 0 < p < 1. The recipient moves rst, deciding whether to invest in sending a signal to the donor (S) that it is ideal, or not ( S). Based on Rs action the donor can update its beliefs about Rs type and either Fund (F) the recipient, or not ( F). The donor distributes funding where appropriate, the game ends, and payoffs are awarded.

1. Initially, the game must be analyzed as though the two agencies have no prior funding relationships.

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Payoffs For each outcome in Figure 1, the payoff to the recipient is listed rst, followed by the payoff to the donor. Note that for the recipient, the payoff is determined by the level of funding it receives, discounted by any signaling cost incurred. If funded, signalers receive a higher level of funding (FH) than nonsignalers (FL). Further, Type I (effective) recipients incur a different signaling cost (cL) from Type II (ineffective) recipients (cH). These type-differential signaling costs are crucial to achieving separation through a credible signal. Donor payoffs are based on recipient type. Funding an effective recipient (H) is better than funding no one (0), but funding no one is better than funding an ineffective recipient (L). Changing the relationships among the value of p and the payoffs for each player will determine the conditions under which various equilibria are derived. Equilibria for the Game Three perfect Bayesian equilibria for this game are described here: Equilibrium 1. Organization types are distinguishable by recipients actions. The equilibrium strategy prole is (SE S E, FS F S)2 provided cH FH FL. The Donors beliefs are 1 = 0, 2 = 1. Equilibrium 2. Organization types are not distinguishable by recipients actions. The equilibrium strategy prole is ( SE S E, FSF S). The Donors beliefs are 1 = p, p
0 L H L

, 2

0 L H L .

Equilibrium 3. Organization types are not distinguishable by recipients actions. The equilibrium strategy prole is ( SE S E, FSF S). The donors beliefs are 1 = p, p
0 L H L

, 2

0 L H L .

As the game parallels the canonical signaling game, derivation of the equilibria is omitted.3 In the rst equilibrium, a credible signal achieves separation. Ideal recipients always send the signal; non-ideal recipients never do. The donor believes the
2. Read: Recipient Sends signal if Ideal (Type I), does Not Send signal if Not Ideal (Type II). Donor funds all senders, and does not fund non-senders. 3. Proofs available upon request. A fourth equilibrium exists where organizational types are not distinguishable by recipients actions, and p. The equilibrium strategy for the recipient is ( SE S E), while the Bayesian donor randomizes around its prior beliefs (1 = 2 ) and funds or not funds by a toss of the coin.

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1 Fund
Signal
A D

FH-cL , H -cL , FL, H 0,

~Fund
2

F
D

Type I: Effective
(p)
N

Dont Signal

~F

Type II: Ineffective

(1-p)
A

3 F

FH-cH, L -cH, FL, L 0,

~F

4
~S
D

F ~F

Let FH be the funding level to an applicant that signals. Let FL be the funding level to an applicant that does not signal. Let cL be the signaling cost to a Type I applicant. Let cH be the signaling cost to a Type II applicant. Let H be the donor payoff to funding a Type I applicant. Let be the donor payoff when it grants no funding. Let L be the donor payoff to funding a Type II applicant. Assume FH > FL > 0 and H > 0 > L.

Figure 1. Game between donor and recipient

signal, funds all senders, and never funds non-senders. To reach this state, the signaling cost to a Type II recipient must be higher than the highest benet it can attain; the non-ideal recipient will never try to send it. Ideal recipients will send it if their cost of signaling is less than the highest benet attainable. If cH = cL or FH > cH, the signal is worthless, and no organization will choose to send it; all recipients will pool by not sending a signal. Donors will retain their prior beliefs regarding each recipients probability of being an ideal organization, and will fund depending on the relationship between h and  as opposed to  and L. As (h ) approaches equality with ( L), the minimum p necessary for the donor to fund approaches 1/2. As (h ) exceeds ( L), p decreases. As (h ) grows smaller than ( L), p increases. Donors that place high priority on achieving a match with

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recipients (only funding Type I recipients, and never funding Type II recipients), but do not discern between mismatching and funding no one, will fund based on lower levels of p (Equilibrium 2). Donors that feel that funding no one is nearly as important as matching, but that mismatching is particularly bad, require a higher p for funding to occur (Equilibrium 3). Discussion The outcomes of this model speak to the survival of ineffective organizations by outlining the possible outcomes that may arise in the nonprot world. Ideally, signals credibly separate effective nonprots from ineffective nonprots, and only effective nonprots survive. The model reveals that the more expensive and difcult it is to send signals, the more likely we are to see ideal nonprots differentiating from non-ideal nonprots in the real world. Similarly, the smaller the grant award relative to the signaling cost for nonideal nonprots, the more likely it will be that only Type I organizations will nd that the benet outweighs the cost. Smaller grants will be more likely to differentiate those for whom the signaling cost is low from those for whom it is high. It is possible, however, that type-differential signals may credibly signal the donors ideal, but that the donors ideal is not nonprot effectiveness. If, instead, the donor prioritizes characteristics such as public relations, brand naming, or the favor of another donor, a credible signal of one of those attributes can lead to separation based on factors beyond effectiveness. An ineffective organization that credibly signals a good brand name will survive. The funding process, while suboptimal according to effectiveness, will efciently allocate resources according to the donors ideal and the recipients signal. Additionally, if a signal is more costly than it needs to be, those organizations that can afford to send it may still be incurring too much cost to do so. Both parties have an interest in keeping the signal as cheap as possible, without collapsing the separation. Any signal that costs more than separation requires is using too many of the effective organizations extra resources, thus reducing its own effectiveness. Even Type I organizations will have their effectiveness threatened by having to jump through hoops to please donors. And if the signal is too costly for anyone to send, all organizations will simply avoid sending it. Effective organizations will not be able to separate, which will lead to regulations that require transparency and other accountability measures. Rather than insuring separation, these measures will sap further resources from the effective organizations, while continuing to allow ineffective organizations to exist, resulting in the suboptimal allocation of all funding. As the model establishes the theoretical possibility that the fundraising process allows ineffective agencies to perpetuate, it becomes important to investigate the fundraising system empirically. The full signaling process cannot be tested directly for, as observers, we are in the same boat as the donors: we

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cannot know at the onset which organizations are ideal, nor can we know their true costs of signaling. What can be investigated is how donors conceptualize alterable and unalterable attributes, and which signals are correlated with higher levels of funding. Based on the previously discussed theoretical propositions, then, I generate the following empirical propositions:
PROPOSITION

1: Donors recognize a distinction between recipient signals and indices, and use information transmitted through signals and indices to make funding decisions. 2: Recipients incur a cost when sending signals, a cost that makes signaling too expensive for some recipients to bear. 3: Recipients that send signals receive a benet that outweighs their cost of signaling. Empirically investigating these propositions is the focus of the next sections.

PROPOSITION

PROPOSITION

Qualitative Evidence of Signaling Stone et al. (2001) discuss which nonprot attributes attract different types of donors. Authors contributing to Anheier and Salamon (1998) investigate these attributes in arenas outside the US. Allowing insights from the signaling model to drive the data analysis, I set out to investigate which signals and indices, or alterable and unalterable attributes, donors and recipients believe correlate with funding in the international arena. Previous scholarship suggests that some donors gear their funds toward nations or regions of priority (Alesina and Dollar, 2000), making a crossnational study inappropriate for this analysis. To control for cross-national trends, which are often based on aggregate indicators and political or economic behavior at the national level, this investigation will be limited to one development arena. This restriction insures that preferences are common among donors, and that the legal constraints on organizations and donors are constant. Focusing on one nation also allows investigation at the organizational and individual level, opening an opportunity to untangle the decision-making process of organizational agents. Brazil is an ideal choice to investigate the donornonprot signaling interaction because it houses active domestic and international nonprots that regularly compete for funds. The economic and social needs of Brazil are not met by the private market, and low levels of public spending have left the efforts of economic and social development to nonprot organizations (Anheier and Salamon, 1998). The per capita amount of bilateral and multilateral funds owing to

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Brazil is so small that nonprots must turn to private donors (Landim, 1998), making Brazil ideal for analyzing various types of donors (corporate/private, nonprot, governmental) in one study. As Brazils state and civil society are increasingly working together to confront social and economic goals, it is a constructive environment for the study of nonprot fundraising. Brazil is a generalizable test case because organizations operating there do not stand out as recipients of particularly high or low levels of assistance (International Development Statistics Online Database on Aid and Other Resource Flows, 2003). Brazil ts in the 52nd percentile of developing countries, when ranked in terms of per capita dollars owing to nonprots and NGOs. A few unique attributes of Brazilian nonprot activity will slightly constrain measurement, but should not severely threaten the generalizability of the model. Brazilian nonprot activity has historically been structured by the ruling regime (Bosch, 1997; Pearce, 1997). In 1993, in response to corruption scandals unleashed by President Fernando Collor, Brazil created the National Social Welfare Council (CNAS) to oversee social welfare policies (Landim, 1998). Under the registration rules of CNAS, nonprots must submit by-laws, founding minutes, and directors names. Philanthropies are a special class of organizations, nonprot public interest entities that provide services without discrimination, maintain unremunerated directors, and receive breaks in water, electricity, and trash expenses.4 Many nonprots and philanthropies operate without registration due to a costly and lengthy application process, and because registered nonprots and philanthropies cannot own property (interviews with the author, 2003). Thus, nonprots in this study will not be dened legally, but along the lines of Anheier and Salamons (1998) categorization of a private, voluntary, selfgoverning entity that does not prot owners, shareholders, or directors.

Reports of Signaling As the model tells us there should be a distinction between alterable and unalterable attributes, the investigation begins with qualitative evidence of which signals and indices donors and recipients report are factored into funding decisions. I conducted 88 open-format interviews with executive and nancial directors from donor and recipient organizations that operate in Brazil (methods in Table A1). A purposive sample was chosen to reach a broad range of donors and recipients. Of 167 organizations contacted, 61 granted at least one interview (36.5%). Donors in the sample represented three types of agency: governmental organizations (such as Interamerican Development Bank (IDB), United States
4. Donations to an unregistered nonprot are not tax deductible. Individuals receive deductions on up to 10 per cent of income; rms have a 5 per cent limit (Articles 79 and 246 of Brazils Federal Income Tax Regulations, quoted in Landim, 1998).

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Agency for International Development (USAID), World Bank, European Union (EU)); private or corporate foundations (Volkswagen, Bosch, Hewlett-Packard Institute); and intermediary nonprots (those that both receive and distribute funds, such as World Wildlife Fund, Fundacao Orsa, Fundacao Abrinq). I asked the Executive/Regional Director or Director of Projects what criteria determine who receives money. Many governmental donors publicly solicit project proposals. Other donors privately solicit applicants to enter closed competitions. Private and corporate foundations often choose recipients without waiting for them to approach, or accept unsolicited proposals. Recipient respondents receive money from various combinations of governmental sources (such as USAID, IDB, UNICEF, World Bank, Brazilian federal, state, and city ministries), private/corporate foundations (Kellogg, Ford, MacArthur, Bill and Melinda Gates, Hewlett-Packard Institute, Natura, Boti cario), individuals, and intermediary nonprots (DKT International, Private Agencies Collaborating Together, International Youth Foundation). The sample includes organizations that have not competed successfully for international funds. I asked the organizations Executive or Financial Director about fundraising strategies and operations. Some recipients have departments and staffs devoted entirely to fundraising, while others maintain staffs that intersperse fundraising with other duties. Respondents engage in events, direct mailing, grant-writing, collecting dues, and providing fees-for-service. Donors conrm that they do look to a nonprots organizational attributes for signals of its true type before disbursing grants. Recipients conrm that they structure and operate their organizations according to the signals they believe donors seek. Respondent reports of a distinction between alterable and unalterable attributes, coupled with insights from the literature, illustrate which attributes are considered credible signals of type. Indices Indices indicate to donors the sort of programs an organization will be able to implement. One index donors reportedly consider is an organizations geographic range of service. Bebbington and Riddell (1997: 11113) report that some donors choose to fund nonprots that are based in the region of choice, because less money is transferred to contractors along the way. Our foundation works only with communities where a lot of our employees live, states one corporate foundation donor agent.5 Others prefer to fund intermediate or broader-range nonprots with connections to smaller nonprots in diverse regions. As one recipients nance manager states, We got that Ministry of Education grant because our local contacts were clear. Our lower communication costs helped us get the grant.

5. For condentiality, no names or organizations will be associated with specic comments.

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A second unalterable attribute, or index, is the sector the organization serves. Although previous work distinguishes sector or issue area in various ways (Reiner and Wolpert, 1981; Wolpert and Reiner, 1984b), respondents in this sample point the focus to the sectors of women, children, and the environment, for various reasons. Some donors only give to childrens organizations. Womens organizations tend to receive more money from international donors than from national donors, and respondents from these organizations believe their target population is overlooked. Authors argue that environmental organizations are staffed with disproportionately well-educated and middle class employees (Hochstetler, 1997: 192), which might position them to petition for funds more effectively. The third index is the type of service the potential recipient gives, either direct or indirect. Some donors fund direct, hands-on efforts such as distributing food, rather than the indirect pursuits of education or advocacy (more in Wolpert and Reiner, 1984a). Gordenker and Weiss (1996: 3741) argue that indirect service organizations nd it the most difcult to raise funds. While 55 per cent of donors agree that they prefer to fund direct service, some disavow the trend: Every child has a mother, so we try to fund organizations that work for their rights. These conicting views result in a relationship between type and fundraising that is not clear cut. Previous literature (Reiner and Wolpert, 1981; Landim, 1998) indicates that a nonprots age is an unalterable attribute that can affect its ability to attract money. Yet several Brazilian organizations were founded in response to the political scandals and poor development reports of the early 1990s (similar to trends in the US: Abramson and McCarthy, 2003). Many donors thus believe that organizations founded in the 19914 scandal response range are less likely to be corrupted, while still old enough at the time of this study (20034) to be trusted with large amounts of money. Consequently, donors account for the unalterable attribute of the founding date with respect to this time period, rather than the age itself, when making funding decisions. Seventy-eight per cent of donors state that whether or not a potential recipient has a religious afliation has a profound effect on funding decisions. Previous work (Wolpert and Reiner, 1984a; Tuckman, 1998; Hodgkinson, 2003) conrms that religious afliation can be an important draw or deterrent of funding from different types of donor groups. Although some donors are not legally allowed to donate to religious nonprots, others seek them out in order to reach certain communities. One clever recipient realizes this distinction:
we are not ofcially afliated with any religion, because we have to be able to apply for federal funds. But our sister organization, which draws in millions each year in support of its religious activities, funds us indirectly, because our work appeals to them. That way were able to get dollars from both those that support religious activities and those that dont. We simply cant afliate with a religion if we expect our work to continue.

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Indices help donors narrow their searches for the ideal recipient. Note that in the short term of a donors funding cycle, these attributes are unalterable.6 A recipient organization, once formed, cannot change its indices without becoming a different organization.7 Signals A signal is an alterable attribute. Although potentially difcult and time-consuming, recipients can change these attributes, and thus the strength of the signals they send. Interviews indicate that donors focus on two main signals of an organizations true type: professionalism and accountability. A recipients type inuences not only the strength with which it sends various signals, but also its ability to change that strength. The rst signal, mentioned by 100 per cent of donors, is the professionalism of the recipient. Abramson and McCarthy (2003: 343) dene the professionalization of an organization to be a shift away from amateur or personalized responses and towards technical and standardized approaches to providing services. A professionalization trend among nonprots is noted in Frumkin and Andre-Clark (quoted in Light, 2000) as a vehicle for improving management, and in Gordenker and Weiss (1996) among recipients of development assistance. Donors interviewed believe that agencies with higher degrees of professionalism are more effective in their work: People who can handle things professionally are better at servicing populations and clients, states one donor agencys managing director. Recipient nancial directors conrm that they strive to appear professional, often at great cost. When pressed for how professionalism is gauged or assessed, responses converge around three main attributes: accessibility, experience, and fundraising specialization. A high degree of accessibility indicates that potential donors can gather information about the organization without difculty. An organizations accessibility is the ease with which prospective donors can communicate with its staff,
6. An environmental organization cannot suddenly change itself into an AIDS clinic, just as an organization that works exclusively in a small rural community cannot shift to the international level overnight. It is possible that in the long run such shifts could occur (Wolpert and Reiner, 1984a; Luong and Weinthal, 1999), but these possibilities would involve a tremendous investment of capital and resources (see Uvin, 1996), could dilute funding, and for parsimony will not be considered here. 7. Laffont and Tiroles (1991) work on regulatory capture suggest an organizations governance structure as another unalterable attribute. As nonprots have no shareholder or public accountability, some become essentially one-man operations with a captured regulatory board of directors. While donors in the sample acknowledge that this is a plausible dimension to consider on theoretical grounds, they report that it is too difcult to try to examine every organization closely enough to determine whether its board is captured. Further, one donor even asserts that sometimes one person knows whats best for an organization and its target population, so that doesnt concern me.

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and is prioritized by 79 per cent of donors. As one donors program director states, There are people in my organization that need to see reports in Spanish or English. If I can see right away that an organization can accommodate that, they move to the top of my list. To attract international donors, it is often necessary for a recipient to employ staff members that speak or write in more than one language (Hulme and Edwards, 1997), even though it may have nothing to do with the organizations core mission. States one recipients nancial director, You think its necessary to speak French to give children lunch? Its necessary to speak French to keep our main donor from Dijon, so we pay a premium for someone who does. Respondents assert that to signal high levels of professionalism, an organizations employees need diverse professional experience. Donors are drawn to recipients that operate as the donors do. It becomes important for recipients to have experience from other economic sectors that they can use to enhance fundraising. As one recipient representative says, Its really expensive to hire businesspeople who . . . know how to speak the business language. And its worth it in the end because of how good they make us look. The nal component of professionalism that donors notice is a nonprots fundraising specialization, whether any staff positions are devoted to attracting and maintaining donors. Frumkin and Kim (1998, quoted in Light, 2000) note that fundraising specialization is becoming a high priority in nonprot hiring practices. Ninety-one per cent of donors cite fundraising specialization as crucial to their choice of recipients, as it offers a well-trained contact within a recipient organization that will be available to them at all times. Schneider and Ji (1990) argue that organizations with fewer resources cannot apply for funding because they do not nd it worth their time, based on their chances of success. A recipient agrees, Of course wed like to hire people to devote exclusively to fundraising. Who couldnt use the extra money they might win? As it is, we cant pay the people we do have, and they all have thousands of responsibilities. Beyond professionalism, 100 per cent of donors report seeking recipients that are accountable. A nonprot is here considered accountable if it can be held responsible for its actions or inactions (OConnell, 2005; see also Tuckman, 1998; Brody, 2003). Details of how donors assess the concept are summarized in the discussion of four alterable attributes: transparency, reliability, credibility, and reputation. The rst component of accountability is transparency, the ability to view and evaluate information regarding recipient accounting and operations. Previous scholars (Postma, 1994; Tuckman, 1998; Keating and Frumkin, 2003; Roberts, 2004; Koppell, 2005) assert that transparency is a key means to holding organizations accountable. Seventy-six per cent of donors agree, stating that more transparent organizations are more accountable, and thus more likely to receive their money. Many donors mention, however, that transparency is not always enough to insure accountability. Transparent records must also have a high degree of

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reliability, considered present if nancial records have been audited by a third party, as suggested in Keating and Frumkin (2003; see also Kearns, 1994; Frumkin and Kim, 2001). Donors and recipients maintain that the audit process, although expensive, is vital to reliably proving that an organization is operating legitimately (see also Herman and Renz, 2004). States one recipients nancial director, I know weve lost prospective donors because we cant assert that our nances have been audited, but we just cant pay them, so I cant spend time thinking about it. Credibility, referred to by Keating and Frumkin (2003) as the ability to believe in and trust an organization, is high on donors lists of desirable signals. As many nonprots in Brazil are not legally registered, donors (82%) consider an organization more credible if it is registered as a nonprot or philanthropy, which Koppell (2005) argues shows that it can follow the rules. Prospective donors know that registered organizations conform to standards of organization and conduct, and use this registration as a signal of capabilities. For recipients, the cost of this registration is sometimes too much to bear, as an executive director states: The red tape we have to get through would take years, and I dont have the time. I have an organization to run. Lastly, donors gauge an organizations accountability through its reputation, its overall quality as judged by others. Donors are wary of relying on nonprot self-generated reports, which can be biased (see Frumkin and Kim, 2001), so they often accept the endorsement of other donors (via presence of a grant from that donor) as evidence of an effective organization. Some donors even forgo their own searches for effective recipients to fund recipients that already have prestigious donors. One donor reports seeking out recipients because of its reputation among other donors, and eschewing recipients that approach it without such endorsement. This practice is not lost on strategic recipients, who believe donors share opinions of recipients with one another.

Discussion This qualitative analysis conrms the three empirical hypotheses listed earlier. First, donor agents look to a recipients alterable and unalterable attributes when determining funding. Second, altering these attributes is costly, too costly for some organizations to bear. Third, the recipients that do invest in signaling do so because they believe the cost outweighs the benet. Additionally, the quotations reect that altering attributes can divert resources away from a recipients core mission, and does not always directly reect organizational capabilities. Hiring people who speak foreign languages, undergoing third-party audits, and obtaining organizational certication are costs recipients incur to signal professionalism and accountability. Recipients afrm that expending resources in these areas can divert funds away from the direct

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provision of services, although it indirectly increases the ability to provide services by raising funds. Under what conditions will the benet of signaling outweigh the cost? The next section investigates this question with a largersample study.

Quantitative Evidence of Signaling Benets I conducted a survey of 385 nonprots in Brazil to discern which signals attract the most funds, and how much funding they attract. Simple gross income of an organization in the year 2003 (in US dollars), transformed logarithmically to ensure a normal distribution, is the dependent variable in a standard OLS model. I expect that a nonprots signal scores will be positively correlated with its intake, despite controlling for indices and other factors. Data and Measurement There is no universally known or publicly available record of nonprots in Brazil, although scholars estimate that over 200,000 exist (Anheier and Salamon, 1998). A sample of 3594 nonprots was compiled from three clearinghouses (ABONG, 2004; Ajuda Brasil, 2004; Seja um Voluntario, 20045),8 and invited to participate via the internet, yielding 385 responses (10.71%).9 All communi ques and materials were transmitted in Portuguese.10 Signal and index measures are derived based on the qualitative reports,11 and designed to conform to an important distinction between signals and costs: signals may not directly prove type (Spence, 1973). There is a direct link between an organizations type and the cost it bears in signaling. Non-ideal organizations incur high costs; ideal organizations incur low costs. Measurements must characterize signals that are expensive to send and reect the potential to differ in cost from one nonprot to another.

8. Sources similar to sources found on giveforchange.com, guidestar.org, and helping.org. 9. There is a concern that poorer nonprots will have fewer resources to ll out the survey, or that richer nonprots will not want to ll out a survey, resulting in self-selection and bias in the sample. To guard against this possibility, respondent organizations were given access to a forum of participant nonprots, and a link to their organization on the survey website, as an added enticement. Further care was taken to restrict the analysis to variables gathered from questions that yielded approximately normal frequency distributions. As with any survey, the possibility of selection bias cannot be completely eliminated. 10. Materials were translated into Portuguese by a native Portuguese speaker, translated back into English by a native English speaker, then revised and translated back into Portuguese. 11. Table A2 lists denitions and sample statistics.

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An example illustrates the distinction. Consider a plausible measure of experience the number of employees with degrees in higher education. Such a measure indicates high levels of experience for a tuberculosis clinic because highly educated personnel are required to operate it, but confounds proof of type with a signal of type. Instead, consider the measure for reliability: it is expensive to hire third parties to perform audits, and to conform to the requirements necessary to undergo such an audit, yet it is unlikely to directly enhance an organizations ability to perform its core mission. This and the other measures are designed to be true to the signaling game in that signaling costs differ, but measures are not direct proof of abilities. A few added measures merit discussion. Reputation counts the number of donors from which an organization received funds prior to one year before lling out the survey. This measurement allows for the time delay between decision and disbursal, captures the inuence prominent donor relationships can have on future funding, and accounts for repeat donor relationships without biasing results by including a lagged dependent variable on the right-hand side.12 Several controls were inserted. Fulltime staff size13 is expected to be positively associated with yearly intake. A few measures capturing an organizations founding scenario, the level of boost an organization received from its founding, allows for the organizations founding to inuence future funding, and was included to guard against endogeneity.14 As Brooks (2000) indicates, the expected effect of a founding scenario on yearly intake is unclear, as high levels of support at founding can either boost or crowd out other donations. Results Some responses were left blank or lled in with Dont know or Prefer not to respond. Rather than use listwise deletion to eliminate these responses completely, many scholars have chosen to impute multiple datasets that simulate missing values for these responses, then to estimate the model on each dataset and combine the results into one output (Rubin, 1986;
12. As many assert (Shi and Svensson, 2004), an agencys budget in year t is likely to be a function of its budget in year t 1. Following Achen (2000), a lagged dependent variable is not used here as it is likely to bias the remaining results downward. 13. Counts of volunteers were inconsistent and unreliable, and thus inappropriate to include. 14. There is an innite regress that results from the logic: If an organization makes more now, it was more credible a year ago, but it was probably more credible then because it made more before that. So grant success in year t 1 could increase the likelihood of grant success in year t. Ideally, this problem would be resolved by using data spanning several years, which the current study cannot accommodate. Instead, the reputation and founding scenario variables are used as the best available options to combat endogeneity.

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Table 1 . Determinants of 2003 Intake (White-corrected Standard Errors in Parentheses)

Intake03 Indices: Geographic range: international Geographic range: national Geographic range: state Geographic range: municipal Sector: environment Sector: women Sector: children Type (direct/indirect) Scandal range Religious afliation Signals: Professionalism Accessibility (language count) Accessibility (english dummy) Experience in private sector Fundraising staff Accountability Transparency (nancial records) Reliability (audit dummy) Credibility (registration) Reputation (prior donor) Controls Strong founding Mid-level founding Fulltime staff size Constant Observations R2^
^

Intake03

2.57 (1.39)* 1.58 (0.83)* 1.02 (0.75) 1.17 (0.63)* 0.51 (0.67) 0.16 (0.56) 0.25 (0.72) 0.26 (0.67) 0.85 (0.70) 1.69 (0.58)***

2.69 (1.40)* 1.68 (0.87)* 1.03 (0.76) 1.10 (0.63)* 0.58 (0.67) 0.19 (0.56) 0.24 (0.71) 0.22 (0.67) 0.87 (0.70) 1.75 (0.60)***

0.46 (0.24)* 0.00 (0.00) 1.77 (0.91)* 0.09 (0.55) 0.87 (0.52)* 1.23 (0.57)** 0.79 (0.46)* 1.05 (1.10) 0.10 (0.53) 0.00 (0.00)* 6.13(1.16)*** 385 0.19 0.62 (0.60) 0.00 (0.00) 1.76 (.91)* 0.11 (0.57) 0.87 (0.52)* 1.31 (0.56)** 0.91 (0.46)* 1.03 (1.09) 0.19 (0.51) 0.00 (0.00)* 6.25 (1.22)*** 385 0.18

The values for R2 are averages across all imputed datasets. *signicant at p < .10; ** signicant at p < .05; *** signicant at p < .01.

Brownstone and Valletta, 2001). Following the lead of Escobar-Lemmon (2003), Scheve and Slaughter (2001), and Boehmke (2002), I used the AMELIA (King et al., 2001) program to simulate missing values for multiple imputations of data.15 Manipulations were run on the imputed datasets with CLARIFY (King et al., 2000), which estimates the model on each dataset

15. Listwise deletion is only more appropriate than multiple imputations when the data is assumed to be Missing Completely At Random (King et al., 2001), a condition this survey data violates. AMELIA generates educated guesses as to what the missing values would be, based on simulations of random linear functions created from the information that is not missing. AMELIA imputed ve datasets, using Expectation-Maximization with Important Resampling.

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and applies an algorithm to yield one output.16 All descriptive statistics (see Table A1) were based on the data before imputations. From here forward estimates, standard errors, and predicted values reported will be based on the imputed datasets generated by AMELIA and processed with CLARIFY. Based on the interviews and tendency for selection, dummies for children, women, and the environment account for sector and are allowed to vary, along with accessibility, across ten basic iterations.17 Table 1 lists estimations of yearly intake in the log of 2003 dollars. The rst column contains results for the model including a count of foreign languages spoken, the second for the English dummy estimation. Eight indices and signals show signicance: accessibility, reliability, credibility, fundraising specialization, reputation, religious afliation, fulltime staff, and geographic range of service. Indices show mixed signicance. Sector indicators are not signicant determinants of yearly intake, either inserted individually or together. This calls into question recipient respondents beliefs that sectors beyond their own are disproportionately favored in the nonprot arena. Similarly, lack of signicance on the scandal response range indicator suggests that donors do not make funding decisions based on whether an organization arose as a result of the corruption scandals. Geographic range of service and religious afliation indices, on the other hand, show signicance robust to all variations on the model. International, national, and municipal range organizations all demonstrate signicantly greater intake than neighborhood organizations, although state-level organizations do not show a signicant improvement in intake over those neighborhood organizations. Religiously afliated groups organizations take in statistically signicantly more money than their nonafliated counterparts. Five of the seven signal measures show statistical signicance. In the dimensions of professionalism, accessibility is signicant and positive when measured as a total language count, but not as the English dummy. As 53 per cent of the organizations that speak only one foreign language list it as English, it appears that speaking English and Portuguese alone are not enough to attract funds. Having specialized fundraising staff, however, does help attract funds, even controlling for fulltime staff size. Further, an international range is signicant despite controlling for English and fundraising specialization, refuting arguments that the measure simply captures the
16. With regression coefcients, means, and predicted probabilities, CLARIFY estimates the value within each dataset and averages the values across all datasets to reach the value of output. With standard errors, CLARIFY averages the estimated variances within each dataset and adds to it the sample variance in the point estimates across the datasets, multiplying the average across datasets with a factor that corrects for bias (see King et al., 2001). 17. Iterations were run with each sector, no sector, and three sectors. Varying accessibility doubled the iterations. In unreported regressions, a Spanish dummy replaced the English dummy. Through all iterations, results were robust in magnitude, standard error, and directional effects.

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Table 2 . Effects of Varying Signicant Variables while Holding Others Constant at Their Medians
Variable Accessibility (language count) Reliability (audits) Fundraising specialization Credibility (registration) Reputation (prior international donors) Religious afliation Geographic range (international) Geographic range (national) Geographic range (municipal) Fulltime staff size Change in Value 0 to 1 1 to 2 0 to 1 0 to 1 0 to 1 0 to 1 0 to 1 0 to 1 0 to 1 0 to 1 One StDev Effect on Yearly Intake $9,710 $15,412 $16,387 $21,756 $18,378 $32,370 $119,439 $308,474 $108,148 $62,620 $10,959

ability to hire English speakers or other specialized staff. Private sector experience does not appear signicant, which I believe is more likely a reection on the measurement of the concept than the theoretical validity of the relationship.18 Together, the results on these elements of professionalism conrm donor and recipient assertions that professionalism matters in funding allocation. With respect to accountability, although transparency of records is not signicant, reliability of records is.19 The nding conrms donor assertions that viewing nancial records is less important than knowing they were audited by a third party. Donors also prefer formally registered benecent organizations and/or public utilities to those that are not.20 The large sample conrms the interview ndings that recipient accountability is an important factor in funding decisions. Reputation, measured by how many international donors the recipient had one year prior to the funding cycle, is also signicant, demonstrating the importance of other donors endorsements in one donors decision calculus.

18. While previous scholarship suggests a valid link between private sector experience and intake, interview respondents suggested that one or two key business minds could make an important difference in signaling. If so, the effort to approximate a continuous variable by counting those recipient staff members with private sector experience could be confounding the results. 19. Results are robust to exclusion of nancial records availability and the inclusion of an interaction term. 20. Keep in mind that tax deductions are not applicable to donors who do not pay taxes in Brazil. Further, most domestic donors in the sample are governmental and unconcerned with deductions.

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Analysis How much money does each signal yield? Table 2 illustrates the effect of changing signicant variables values on yearly intake.21 Each variables effect was measured by estimating the change in expected yearly intake as the variable moved from one value to another, while other variables were held constant at their medians. Dichotomous variables moved from 0 to 1, while accessibility, reputation, and fulltime staff varied in terms of standard deviations from the mean. Varying signals shows profound effects on yearly intake. In terms of professionalism, an organization with zero accessibility, signifying that no one speaks a foreign language, attracts an average of US$16,533 in 2003. Its competitor that employs someone with prociency in one foreign language brings in close to US$10,000 more, enough to pay that person six times the minimum wage and still increase funds by over US$5,000.22 The organization with a person that speaks two extra languages makes an additional US$15,400, enough to pay two people six times the minimum wage each and still net the organization US$15,000, double that of its counterpart. An organization with no specialized fundraising staff averages US$4,487 in 2003, while its competitors with staff members designated for fundraising makes US$26,243, nearly six times as much. The increase is enough to pay a professional fundraiser ten times the minimum wage and still increase funds by over US$13,000. As for the elements of accessibility, an unreliable organization (no thirdparty audits) brings in US$11,777. Its competitors that do undergo audits attract over US$16,000 more. An organization that is not credible in that it is not certied or registered with the government averages US$7,865 per year. An organization that does boast legal registration brings in over US$26,000, over three times as much. And an organization with a low reputation among international donors, having had no international donors in the year prior to the year of the study, brings in an average of US$26,243, compared to US$58,613 brought in by its counterpart that had only one international donor the year before. Index variance illustrates important effects that unalterable attributes can have on yearly intake as well. Organizations with community/neighborhood ranges are eclipsed by their municipal-level, national-level, and international-level counterparts, which bring in an extra US$63,000, US$108,000, and US$308,000, respectively. Increasing fulltime staff size by one standard deviation yields an increase in 2003 intake of close to US$11,000. Religious organizations bring in, on average, more than ve times (US$119,000) as much as their non-religious counterparts.

21. Please contact author for original log values and condence intervals. 22. Minimum wage in Brazil in 2003 was US$71 per month, US$852 per year (BBC, 2003).

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The analysis conrms the qualitative evidence and expands its implications. Donors give to organizations with higher levels of professionalism and accountability, conceptualized through fundraising specialization, credibility, reliability, reputation, and accessibility. Not only do these signals attract funds; they generate high returns that can more than offset the cost of the signal itself. Conclusion This research has explored the donorrecipient relationship in nonprot funding and the effects of signaling on nonprot resources. Multivariate analysis shows that donors channel their money to organizations exhibiting higher levels of reliability, accessibility, credibility, reputation, and fundraising specialization. Nonprots emit these signals through obtaining certication, employing staff members that speak various languages, acquiring the endorsement of international donors, and undergoing third-party audits, and donors are giving their money to the most skillful signalers. Larger geographic ranges of service, more fulltime staff, and religious afliation also increase an organizations yearly intake. Two key implications of this work are interesting to practitioners and academics. The rst pertains to the potential of signaling to either co-opt or build capacity. Hulme and Edwards (1997) and Gordenker and Weiss (1996) express concern that concentrating on pleasing donors could, either through diverting resources or co-opting agendas, result in a recipient losing the ability to fulll its core mission effectively. Strong signals would not indicate organizational capabilities, but simply signaling capabilities, as this recipients Executive Director implies:
Our founder was famous, Thank God. The government continues to give us money, and people think were big and great, because we have our founders name. Were barely holding ourselves together and our services decline every year but as long as we keep giving the government a good name, a good place to put their money, we should survive.

Another states, Look, we do our best, but theres no doubt that other organizations are better [at this work]. We need more money, and that means we give the donors what they want. Yet nonprots benet from the grants and relationships signaling acquires. These relationships lead to the acquisition of resources and the possible enhancement of capabilities as nonprots strive to meet the procedural requirements associated with maintaining acquired grants. Says one program manager, The IDB made us, forced us, to clean up. We got the IDB grant because the World Bank had been watching us, but to keep it, IDB made us professionalize, make our accounting more transparent, you would not believe. Another

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mentions the computer a donor demanded she acquire, after receiving funding, to track spending. Acknowledging that it took staff away from service provision, she is thrilled with her organizations new method for tracking of clients, and maintains that everyone is better off. Thinking about various donor ideals in light of the formal model can explain the differing observed effects. Some donors fund organizations that signal a good reputation because it helps their own image; others fund organizations that are registered because of a concern with accountability. Such donors fund different types of organizations, but search for signals in the same manner. Still others look carefully for recipients for capacity-building funds. These donors are playing an entirely different game not one of shortcuts and signals, but one of gathering information to discern which organizations can best utilize capacity-building funds, as this donor indicates: We spend years looking for organizations to receive our funds. We focus on a small number and bring them in to train in how to write project proposals and use grant money. Searching takes time, but we believe it is crucial to building capacity. An exploration of this special donorrecipient relationship is a provocative area for future research. The second implication concerns the payoffs of the game, the fact that in order for the signal to be credible, its cost must be higher than the highest benet possible for nonideal recipients. Donors have the incentive to make grants small, so that the only recipients will be those for whom the cost is low. Recipients accustomed to ling applications for US$1,000 grants will continue to do so without thinking, while those for whom the cost is high will never apply for such small amounts. The smaller grant serves as a screening device, giving recipients an in when it is time to apply for larger grants, and donors savvy to this aspect of the game enforce the status quo by repeatedly funding the same pool of recipients. As signaling is relevant in a variety of contexts, this empirical model is applicable across a broad range of countries and institutional settings, particularly those with a competitive funding environment. The qualitative work is specialized with respect to Brazil, but with the possible exception of the accessibility measure, the quantitative variables can be measured similarly elsewhere. Not all signals will matter to the same degree in every case, yet it will be interesting to see how coefcients differ across arenas. This study has shown that the higher signalers make the most money. It is in the formalization of the fundraising interaction that the possible implications of these ndings are elucidated. If the signals found to yield more money are also correlated with effectiveness, and if those signals are no more costly than they need to be in order to maintain separation, these donors and recipients have reached optimal funding relationships. If, however, any of these signals is not correlated with effectiveness, or is so costly that the organizations sending them are wasting resources that could be used to fulll missions, then ineffectiveness in organizations is forced to persist.

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Appendix
Table A1. Data Collection Table Interview Methodsa
USb Time frame Number of peopled (organizations) interviewed from recipient agencies Number of people (organizations) interviewed from donor agencies
a

Brazilc JulyAugust 2003 36 (28) 23 (15)

AprilMay 2003 19 (15) 10 (5)

Interviews were open in format. The respondent was allowed to speak freely, while the interviewer directed conversation in general terms. b Fourteen of the interviews with US agencies were conducted over the telephone (2595 minutes). Four were conducted over email (427 days). One interview was conducted in person (160 minutes). c Thirty-seven of the Brazilian interviews were conducted in person (4775 minutes) in Sao Paulo, SP, and Braslia, DF. One interview was conducted over the telephone (25 minutes). Four interviews were conducted over email (315 days). d Interview respondents were solicited rst from a purposive sample of lists of nonprot contacts and donors provided by USAID, IDB, the World Bank, the Grupo de Institucoes, Fundacoes e Empresas and the Associacao Brasileira de Organizacoes Nao Governamentais. The sample included recipient organizations that are successful at acquiring international funding, as well as those that are not, and donor organizations at the national (Brazilian) and international level. Contact with this rst sample was initiated via email or over the telephone, with a 28 per cent response rate. At that point, respondent contact continued from references of previous respondents, resulting in an overall sample that originated as purposive, but ended with snowball effects.

Table A2. Variable Denitions and Descriptive Statistics

Variable Yearly intake Log intake Experience Accessibility Measurement 2003 US$ Natural log of the 2003 intake Number of people on staff with private sector experience The total number of languages (other than Portuguese) in which someone from the organization can communicate. 1 = 1 or more staff designated for fundraising; 0 = no staff designated for fundraising. 1 = nancial information available; 0 = nancial information unavailable. 1 = third-party audits performed; 0 = no third-party audits performed Range $0$448m 019.92 0856 05 Mean $4.2m 10.92 17.82 1.44 SD $27.7m 4.55 65.99 1.10 N 297 297 319 347

Fundraising specialization Transparency

01

0.76

0.43

301

01

0.59

0.49

317

Reliability

01

0.56

0.50

315

(continued)

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Appendix. (continued)
Variable Credibility Measurement 1 = the organization possesses a Certicado de Entidade Benecente de Assist^ncia Social e CEBAS (Certicate of a Benecent Social Assistance Entity) or Ttulo de Utilidade Publica (Title of Public Utility) 0 = no certication possessed. Children/Infants, Street children, Youth/adolescents, Women, Energy, Rights, Health, Education, Landless Movement, Consumer Protection, Environment 1 = works with or for children; 0 = else. 1 = works with or for women; 0 = else. 1 = works with or for environment; 0 = else. 1 = offers some type of indirect services, such as research or advocacy; 0 = only direct service offered. 1 = international range; 0 = else 1 = national range; 0 = else 1 = state range; 0 = else 1 = municipal range; 0 = else 1 = neighborhood/community range; 0 = else 1 = Religious afliation 0 = No religious afliation Number of fulltime staff 1 = founded 199194; 0 = founded prior to 1991, or after 1994 Count of international donors one year prior to lling out survey 1 = Money from fund appropriation, founders private funds and contacts, or as a spin-off with funds from another organization; 0 = else 1 = Individual, foundation, or corporate funds, or combination of money and volunteers; 0 = else 1 = No money to found; 0 = else Range 01 Mean 0.65 SD 0.48 N 370

Development sector *

NA

NA

NA

385

Children Women Environment Type of service

01 01 01 01

0.68 0.42 0.22 0.74

0.47 0.49 0.42 0.44

385 385 385 384

International National State-level Municipal Community Religious afliation Fulltime staff Scandal range Reputation Strong found

01 01 01 01 01 01 01400 01 04 01

.01 .17 .20 .35 .23 0.22 37.11 0.11 0.04 .11

.20 .38 .40 .48 .42 0.42 133.73 0.32 0.31 .31

381 381 381 381 381 383 344 385 356 375

Med. found

01

.42

.49

375

Poor found

01

.47

.50

375

* Respondents listed a total of 10 extra sectors in the Other option.

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GINA YANNITELL REINHARDT is Assistant Professor of Public Policy, International Affairs, and Public Service Administration at the Bush School of Government and Public Service at Texas A&M University, where she researches decision-making under uncertainty and its effects on the distribution of wealth in society. ADDRESS: Bush School of Government and Public Service, Texas A&M University, College Station, TX 77843-4220. [email: greinhardt@bush school.tamu.edu]