Mission Capture

Abstract

Private organizations that produce public goods commonly accept restricted contributions. We analyze a model in which the voluntary acceptance of a restricted contribution can force an organization to alter the nature of public goods produced, which we call mission capture. Our analysis identifies factors that determine the likelihood of mission capture, assesses the ex ante welfare implications of possible mission capture, and considers the critical role disclosure can play in managing the welfare implications of possible mission capture.

Keywords: Philanthropy; Nonprofit Organizations; Capture; Disclosure

JEL Classification: D64, L31