Nonprofit Organizations, Monopolistic Competition, and Private Donations: Evidence from Spain

This article presents an analysis of the determinants of money and time donations to Spanish nongovernmental organizations that channel aid to less developed countries. A basic model inspired by the theory of monopolistic competition is formulated and tested taking into account that some of the explanatory variables, such as fund-raising expenditure and price, are endogenous. The results show that the average donor is different for money and time donations and that government preferences differ from those of private donors. Finally, the authors find that the hypothesis of efficient fund-raising expenditures cannot be rejected.