The Indian Ocean tsunami and private donations to NGOs

Non-governmental organisations (NGOs) are widely believed to raise their flag in humanitarian hotspots with a strong media presence in order to attract higher private donations. We assess this hypothesis by comparing the changes in donations between US-based NGOs with and without aid operations in the four countries most affected by the tsunami in the Indian Ocean in 2004. Simple before-after comparisons tend to support the hypothesis that 'flying the flag' helps attract higher private donations. However, performing a difference-in-difference-in-differences (DDD) approach, we find only weak indications that private donors systematically and strongly preferred NGOs with operations in the region. Extended specifications of the baseline regressions reveal that our major findings are robust. NGO heterogeneity matters in some respects, but the DDD results hold when accounting for proxies of the NGOs' reputation and experience.