Communication Strategies of Non-governmental Organizations: Theory and Evidence

Mathieu Couttenier (University of Geneva)
Pierre Fleckinger (Mines ParisTech & Paris School of Economics)
Matthieu Glachant (Mines ParisTech)
Sophie Hatte (University of Lausanne)

Abstract : Advocacy Non Governmental Organizations (NGOs) mostly influence social outcomes by providing stakeholders with information. We develop a theory of communication about corporate social behavior between a NGO and an imperfectly informed stakeholder. We focus on one communication dimension: whether the NGO reveals socially-beneficial activities (good news) or socially detrimental ones (bad news). The model provides two main insights: 1) In a given situation, the NGO falls into the extremes, emitting either good news only or bad news only; 2) the more severe the communication constraint (limited resources, airtime, or stakeholder attention), the more likely the NGO emits bad news. We then provide evidence supporting our theory in an extensive panel data set of news published by 634 NGOs between 2002 and 2014.

The Organization of Social Enterprises: Transacting Versus Giving

Ofer Eldar (Duke University)

Abstract : Traditional models of organizational choice focus on the distinction between the for-profit and non-profit forms. These models ignore a critical distinction between organizations that transfer subsidies on behalf of donors to beneficiaries, and social enterprises, such as microfinance institutions and fair trade firms, that commit to transacting with different classes of disadvantaged groups. I present a model where entrepreneurs receive subsidies and have a choice between (1) giving to the beneficiaries, and (2) forming a social enterprise that transacts with them, as well as choose to incorporate as a for-profit or a non-profit. I show that social enterprises have financial and reputational incentives to measure their beneficiaries' abilities and tailor subsidies to their particular needs. Their effectiveness in utilizing subsidies explains why such enterprises have been particularly effective in addressing social missions, such as increasing access to capital or improving employment opportunities. Entrepreneurs choose to form social enterprises when the variance in beneficiaries' abilities is higher, and therefore the benefits of measurement are greater. Moreover, when the variance in abilities is very high, entrepreneurs will choose to form a for-profit social enterprise, because when the incentives to measure are sufficiently strong, the non-profit form as a commitment device to use subsidies effectively is redundant. The analysis further considers the effects of different tax policies and reform proposals for regulating social enterprises.

Living with Best Friends? How Providers Create Social Capital in Housing for the Elderly

Gorgi Krlev (University of Oxford)

Abstract : ‘Social capital’ denotes the number and strength of bonds between people. Systems of elderly care try to create environments that are similar to people’s original living environment. Community oriented housing is a new model. It creates family or friend-like structures between people and thus incentivises ‘informal’ support. Despite the strong thematic connection between care and social capital, there have been no studies systematically comparing these new forms to more standard models such as ‘assisted living.’ This article compares the social capital and other sorts of capital in a population of people aged 60 and above living in either of the two alternative models in Germany. It studies various components of social capital, among them the social networks, mutual support, participation in activities of the facility etc., but also cultural capital (trust) or engagement/activism (political capital). The article compares the mean levels of capitals occurring in the models in a matched cohort design. It finds that community oriented models, create higher levels of capital, almost consistently across all measured variables. Results will inform housing providers and policy makers of the social effects of alternative living models and might contribute to transforming living facilities for the elderly.