Religious Environments, Governments, and the Density of Nonprofit Organizations

• Published date: 01 May 2024
• DOI: http://doi.org/10.1177/02750740231225437
• Author: Meena Subedi,Gao Liu
• Date: 01 May 2024
• Subject Matter: Articles

Religious Environments, Governments,

and the Density of Nonprof‌it

Organizations

Meena Subedi

1

and Gao Liu

2

Abstract

This study examines the impact of religious environments on the jurisdictional density of nonprof‌it organizations. It has been

argued that religiosity can affect nonprof‌it activities by promoting prosocial attitudes, collectivism, collaborating and bonding,

and business ethics. While prior research has investigated the effects of religiosity on various aspects associated with nonprof‌it

activities, such as volunteering, generosity, nonprof‌it management, and prosocial attitudes, there remains a dearth of studies

exploring the direct relationship between religious environment and the size of nonprof‌it sectors. Existing research yields

mixed results with certain limitations. This research addresses these limitations and f‌inds that a more vibrant religious envi-

ronment contributes to a higher density of both religious and nonreligious nonprof‌it organizations. The study also f‌inds that

the effect is more pronounced in areas with a higher government presence. This f‌inding is consistent with the prediction of

interdependence theory but not government failure theory.

Keywords

nonprof‌it, religion, government, social capital, social cohesion, government failure theory, interdependency theory

Introduction

As an important institution of our society, religion has played

an important role in delivering public services. For instance,

religious organizations were the main providers of social

welfare services in earlier dates; they were associated with

social functions such as mutual insurance, health service,

and education (Cadge & Wuthnow, 2006). However, it has

been observed that these roles of religious organizations in

our society have been diminishing and to some extent

taken over by more formal organizations such as govern-

ments and specialized nonprof‌it organizations (NPOs;

Chaves, 1993; Gorski, 2000). Thus, NPOs seem to supple-

ment religious organizations in some social functions.

On the other hand, it is widely believed that religiosity can

promote nonprof‌it activities (Polson, 2017) and shape non-

prof‌it management (Filistrucchi & Prüfer, 2019). The reli-

gious belief and engagement of individuals may drive

prosocial attitudes (Becker & Dhingra, 2001; Mattis et al.,

2004), collectivism (Cukur et al., 2004), collaboration and

bonding (Becker & Dhingra, 2001; Mattis et al., 2004), and

business ethics (Longenecker et al., 2004). All these factors

may improve social cohesion and social capital, which in

turn foster a nurturing environment for developing nonprof-

its. Researchers have also documented that religiosity leads

to more generous giving (Reitsma et al., 2006) and volunteer-

ing activities (Becker & Dhingra, 2001; Johnston, 2013).

Almost half of personal charitable donations in the United

States (U.S.) are contributed to religious organizations

(Cadge & Wuthnow, 2006). As such, we may expect a

larger nonprof‌it sector (NPS) in jurisdictions with more

active religious activities.

Theoretically, government activities can also interact with

nonprof‌its and religions, adding complexity to their relation-

ship. According to government failure theory (Weisbrod,

1977, 1991; Young, 2000a, 2000b), nonprof‌its arise in

response to unmet public demands. Therefore, when govern-

ments more effectively address these needs, the inf‌luence of

religious environments on nonprof‌its may decrease, poten-

tially weakening the connection between religious activities

and nonprof‌its. For instance, Salonen (2016) noticed that reli-

gious groups created thousands of faith-based nonprof‌itorga-

nizationsto provide homeless shelters and food banksin recent

years. This religion-nonprof‌it link, however, tends to be less

1

Accounting Department, University of Wisconsin-Whitewater, Whitewater,

USA

2

School of Public Administration, Florida Atlantic University, Boca Raton,

USA

Corresponding Author:

Gao Liu, School of Public Administration, Florida Atlantic University, 777

Glades Rd., Boca Raton, FL, 33431, USA.

Email: Gao.liu@gmail.com

Article

American Review of Public Administration

2024, Vol. 54(4) 377–392

© The Author(s) 2024

Article reuse guidelines:

sagepub.com/journals-permissions

DOI: 10.1177/02750740231225437

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pronounced in regions where governments have effectively

provided thesesocial services. On theother hand, governments

often act as substantial funding sources and partners for non-

prof‌its, includingreligious and faith-based nonprof‌itorganiza-

tions, potentially amplifying the religion-nonprof‌it link. This

perspective echoes the interdependence theory of government-

nonprof‌it relationships (Salam on, 1987, 1995).

Based on the arguments presented above, the association

between religious and nonprof‌it activities remains an empir-

ical exercise. In this study, we specif‌ically focus on assessing

the impact of religious environments on the density of NPOs.

While previous studies have empirically examined the effects

of religiosity on various factors related to nonprof‌it activities,

such as volunteering, generosity, and prosocial attitudes,

limited research has investigated the relationship between

religious activities or environments and the size or density

of the NPS, except for those employing religious diversity

as a proxy for population demand heterogeneity (Lu, 2020;

Polson, 2017). Furthermore, existing research yields mixed

f‌indings. Corbin (1999) documented a positive relationship

between religiosity and nonprof‌it activities. Polson (2017)

found that some religious traditions lead to a more active anti-

poverty NPS. More recently, Jeong and Cui (2020) observed

a positive relationship between the rate of religious adher-

ents, used as a control variable, and the density of arts,

health, and human services nonprof‌its. In contrast,

Gronbjerg and Paarlberg (2001) failed to establish a signif‌i-

cant association between religious adherents and nonprof‌it

density. Therefore, the conclusion summarized by Lecy and

Van Slyke (2013, p. 196), that the “debate about the relation-

ship between nonprof‌it density and religious activity remains

an open issue,”remains pertinent.

The available studies addressing this question are also

subject to the following limitations. First, they all rely on

cross-sectional data to analyze the relationship. As elaborated

in later sections, cross-sectional data may potentially yield

biased estimates due to unobserved information correlated

with both the religious environment and the density of

NPOs. Second, as discussed above, governments may play

an important role in the association between religious activi-

ties and the size of the NPS. Unfortunately, prior research has

largely overlooked this potential interaction effect.

This research aims to further our understanding of whether

religious environments affect nonprof‌it density by empiri-

cally testing their relationships. We use f‌ixed-effect panel

data analyses to address the aforementioned f‌irst limitation

facing previous studies. We also tackle the second limitation

by examining the association between religious environ-

ments and the density of NPOs in the context of the

government-nonprof‌it relationship. We posit that the impact

of religious environments on nonprof‌its might be smaller

with the presence of a larger government system and empir-

ically test this hypothesis.

While we use the terms “religious organizations”and

“congregations”interchangeably in this study, we recognize

the distinction between them. A congregation is def‌ined as a

local, community-based group of individuals who primarily

come together for religious worship and activities, often

involved in social service provision within their communities

(Chaves & Tsitsos, 2001; Polson (2017). Chaves and Tsitsos

(2001) and Polson (2017) describe congregations as integral

components of the broader social welfare system, actively

participating in social service activities and collaborating

with secular and government organizations. In contrast, “reli-

gious organizations”refers to a broader category that encom-

passes a wide variety of entities engaged in religious

activities, including congregations and other types such as

religious charities, missionary societies, and educational

institutions. In this study, “religious environments”are oper-

ationalized through two measures: the density of religious

adherents and the density of congregations.

Theories Explaining the Size of the NPS

This study reviews four key concepts or theories that help to

explain the emergence or growth of the NPS: government

failure theory, interdependence theory, social capital, and

social cohesion. These concepts or theories are highly rele-

vant to the current research. The concepts of social capital

and social cohesion have been shown to be closely linked

to both the religious environment and the development of

the NPS (Ben-Ner & Van-Hoomissen, 1992; Corbin,

1999), forming the primary theoretical foundation of this

study. Government, as a powerful institution, plays a

central role in our social functions and activities, potentially

inf‌luencing the religion-nonprof‌it connection. Thus, theories

that center on nonprof‌it-government relationships, particu-

larly government failure theory (Weisbrod, 1977, 1991)

and interdependence theory (Salamon, 1987, 1995), are

also essential to this study. In this section and the next, we

will elaborate how these theories and concepts contribute to

our understanding of the relationships between religious

environments and nonprof‌its, and help formulate hypotheses

for this study.

Social Capital and Social Cohesion

Social capital, a construct advanced by Bourdieu (1986) and

popularized by Putnam (1995), captures community-binding

social networks, reciprocity norms, and trust (Coleman,

1990). Putnam (1995, 2001) associates social capital with

positive outcomes such as cohesion, charitable giving, com-

munity involvement, prosocial attitudes, and happiness. It

motivates civic engagement, political participation, coopera-

tion, and trust (Brooks, 2005). In essence, social capital

fosters collective action (Rupasingha et al., 2000;

Woolcock, 2001), creating a favorable environment for non-

prof‌it sector development. Researchers have also empirically

found that social capital is associated with more generous

giving (Brown & Ferris, 2007; Glanville et al., 2016) and

378 American Review of Public Administration 54(4)