In this paper, we investigate how competition among NGOs affects employees' moral behavior. Employees can engage in constructive and destructive effort, where only the former benefits the NGOs. The NGOs need to monitor the employees as
their destructive effort is non-contractible. We find that competition may reduce monitoring intensity, thereby leading to more destructive effort. We also show that NGOs may end up paying too much to hire talented employees. Therefore, the availability of talented employees may hurt NGOs and this is particularly the case when NGOs' competition is severe.