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Funding nonprofits in a networked society: Toward a network framework of government support
Author(s) -
Ma Ji
Publication year - 2020
Publication title -
nonprofit management and leadership
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.844
H-Index - 54
eISSN - 1542-7854
pISSN - 1048-6682
DOI - 10.1002/nml.21426
Subject(s) - government (linguistics) , centrality , spillover effect , china , perspective (graphical) , crowds , crowding out , business , position (finance) , social network analysis , nonprofit organization , public relations , public administration , economics , political science , social capital , finance , law , philosophy , linguistics , mathematics , computer security , combinatorics , artificial intelligence , computer science , monetary economics , microeconomics
This study considers the effects of government funding to nonprofits from a network perspective. By analyzing a novel, 12‐year panel dataset from the People's Republic of China, I find no evidence that government funding to a nonprofit crowds out private donations to the same organization. However, I find a substantial crosswise crowding‐in effect at the ego network level: an increase of one Chinese Yuan in government funding to a nonprofit's neighbor organizations in board interlocking network can increase the private giving to the nonprofit by 0.4 Chinese Yuan . A nonprofit's network position measured by Katz centrality negatively associates with its private giving. The results suggest that, if we consider the funding system from a holistic network perspective, government should support nonprofits with confidence because of the spillover effect. Moreover, a nascent nonprofit cannot increase donor's confidence by only borrowing board members from renowned organizations.