This study examines whether transformational leadership influences leader–member exchange (LMX) that furthers organizational commitment. It also examines whether transformational leadership directly influences the organizational commitment. Further, the study tests whether organizational commitment enhances NGOs’ effectiveness that improves programme outcomes in terms of health, income, education and happiness of villagers. Data were collected from 312 NGOs in Jharkhand state (India). The constructs under study were assessed from NGO personnel using standard instruments, and programme outcomes on health, income, education and happiness were evaluated from villagers using visuals. Results reveal that transformational leadership directly influences LMX that furthers organizational commitment. Organizational commitment of staff members furthers NGO effectiveness. NGO effectiveness improves health, income, education and happiness of villagers. Transformational leadership has no direct influence on organizational commitment. Rather, such a leadership at the top fosters favourable LMX that leads to organizational commitment of the employees that positively influences NGO effectiveness, which finally improves health, income, education and happiness levels of beneficiaries.
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