When Government Becomes the Principal Philanthropist: The Effects of Public Funding on Patterns of Nonprofit Governance

Abstract

This study uses board governance as an analytical lens for exploring the effects of government funding on the representational capacities of nonprofit organizations. A typology of governance patterns is first developed that captures the board’s strength relative to the chief executive and its representation of community interests. Using this typology and employing multinomial logit analyses of survey data from a sample of urban charitable organizations, the study tests how nonprofit governance is mediated by levels of government funding. Controlling for other relevant environmental and institutional factors, reliance on government funding decreases the likelihood that nonprofit organizations will develop strong, representative boards. In recent years, government has emerged in the United States as a major “philanthropist,” the major philanthropist in a number of the principal, traditional areas of philanthropy. —Filer Commission (Commission on Private Philanthropy and Public Needs 1975, 89)