National Sovereignty and Transnational Philanthropy: The Impact of Countries’ Foreign Aid Restrictions on US Foundation Funding

Foundations are often criticized as organizations of elite power facing little accountability within their own countries. Simultaneously, foundations are transnational actors that send money to, and exert influence on, foreign countries. We argue that critiques of foundation power should expand to include considerations of national sovereignty. Recently, countries across the globe have introduced efforts to restrict foreign aid, wary of the foreign influences that accompany it. However, it is unknown whether these restrictions impact foundation activity. With data on all grants from US-based foundations to NGOs based in foreign countries between 2000 and 2012, we use a difference-in-difference statistical design to assess whether restrictive laws decrease foundation activity. Our results suggest that restrictive laws rarely have a significant negative effect on the number of grants, dollars, funders, and human rights funding to a country. These results call for attention to considerations of foundation accountability in a transnational context.