Inertias of funding in the development cooperation sector

Abstract

This study analyzes the evolution of the funding sources of the Spanish Non-Governmental Organizations for Development (NGDOs) during the 2006-2012 period. To do this, we study the revenue structure of the sector as a whole and of the entities at the individual level, showing the importance that the public funding (the so-called Official Development Assistance) has on the income statement of such organizations and the sharp reduction that this type of funding experienced between 2010 and 2012. We go deeper into the analysis by carrying out a cluster analysis in which we study 499 annual observations belonging to 90 NGDOs members of the Spanish Platform of NGDOs (CONGDE). We find the existence of four funding patterns depending on the greater or lesser importance of the different sources of revenues in the structures of the organizations (one in which private funds are dominant, two in which the public ones are in the majority, and another in which public and private funding have similar importance). The results of the cluster analysis also show how most of the entities (59 of the 90 NGDOs in the sample) have remained impassive in spite of the changes in their environment, preserving a funding structure dominated by public funds. In this way, contrary to expectations, there are few organizations to which such reduction in public funding has led them to seek new sources of revenues. Thus, despite the variation of the environment, the inertia of the organization in its funding structure hinders or slows down its adaptation to change. This inertia has led organizations to a significant decline in revenues or, in some cases of financial maladjustment, to their disappearance.