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The Effect of Large Corporate Donors on Non-profit Performance
Journal article   Peer reviewed

The Effect of Large Corporate Donors on Non-profit Performance

Andrew R. Finley, Curtis Hall, Erica Harris and Stephen J. Lusch
Journal of business ethics, v 172(3), pp 463-485
01 Sep 2021
DOI: https://doi.org/10.1007/s10551-020-04516-2

Abstract

Business Business & Economics Ethics Social Sciences Social Sciences - Other Topics
Using a dataset of corporate philanthropic gifts of $1 million or more, we examine the influence of corporate donors on the performance of recipient non-profit organizations (NPOs). We find that corporate donors positively influence NPO performance, specifically in the form of higher revenues per employee, program ratios, and fundraising returns. We find little evidence that large foundation or individual donors similarly enhance organizational performance. In additional analysis, we find that large corporate donations matter when the corporation is more likely to have influence over the recipient NPO. These findings suggest that corporate donors provide the monitoring and expertise needed to enhance organizational performance beyond simply providing funding to NPOs. Our results are robust to a two-stage model and propensity score matching to address endogeneity concerns. While prior research has examined the effect of corporate philanthropy on donor organization performance, we contribute to the literature by examining whether corporate philanthropy also improves recipient organization performance.

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8 citations in Web of Science
10 citations in Scopus

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Collaboration types
Domestic collaboration
Web of Science research areas
Business
Ethics
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