Non-profit organizations in emerging markets frequently have to manage relations with governments and for-profit firms. We advance a multistakeholder perspective and develop propositions about how the political ties of charities influence their success in raising funds from corporate donors. Evidence from 2,054 Chinese charities during 2005–2012 shows that organizational political ties, established through formal affiliation with the government, aid fundraising from corporate donors, whereas personal political ties, formed through personal political services of senior leaders of charities, have no such effect. The positive effect of government affiliation is relevant for both foreign and domestic donors, but stronger for domestic ones. These results highlight the differential impact and contingent value of political embeddedness for charities' ability to acquire resources from for-profit business, contributing to both stakeholder theory and the political embeddedness perspective.
Non-profit organizations have to maintain productive relations with multiple stakeholders, including government and business. We focus on Chinese charities that seek to raise funds to fulfill their mission. We identify how their political relations influence the behavior of corporate donors. Evidence from 2,054 charities from 2005 to 2012 shows that political ties formed through organizational affiliation with a political body help charities attract corporate donors that seek legitimacy. In contrast, ties formed through personal connections with politicians have less influence on donors who perceive a high risk of connected insiders engaging in activities of dubious legality. The value of political ties is more pronounced for domestic corporate donors.
The authors thank Guest Editor Matthew Potoski and two anonymous reviewers for their constructive advice. The authors are indebted to Chris Marquis for comments on an earlier version of this article and to participants at the 2017 Academy of Management (AoM) annual conference for their suggestions. The authors are also grateful to Yushan Xu and Xueyong Zhan for contributing to the data collection in the field study. This paper has benefited from the National Nature Science Foundation of China (#71602121), the Nature Science Foundation of Guangdong Province, China (#2017A030313410), and the Fund for Philosophy and Social Science of Shenzhen Municipality, China (#SZ2018B007).
© 2018 John Wiley & Sons, Ltd.
- corporate donations
- emerging markets
- political ties