Financial Giving of Foundations and Businesses to Environmental NGOs: The Role of Grantee’s Legitimacy

Abstract

Abstract This paper studies how foundations and businesses decide which environmental NGOs to fund. Since not all funding requests can be satisfied, donors have to evaluate applicants and select just a few. We argue that their selection is based on the evaluation of the applicant ENGO’s various aspects of “legitimacy” (Suchman, Acad Manage Rev, 20(3): 571–610, 1995). We test this claim by using data from 14 in-depth interviews with representatives of Greek foundations and businesses (banks and phone companies) which have funded flagship ENGOs over the period 2008–2010. We find that “moral legitimacy”, which taps on the normative evaluation of an organization by its audience, is the most important for all donors. On the other hand, “pragmatic legitimacy”, which rests on the donor’s self-interest calculations, was found to be more relevant for businesses than for foundations.