The Contingent Value of Political Connections on Donations to Chinese Foundations: Exploring the Moderating Role of Transparency

• DOI: 10.1177/0095399720945969
• Author: Yuan Cheng,Zhongsheng Wu
• Date: 01 January 2021
• Published date: 01 January 2021
• Subject Matter: Articles

https://doi.org/10.1177/0095399720945969

Administration & Society

2021, Vol. 53(1) 36 –63

© The Author(s) 2020

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DOI: 10.1177/0095399720945969

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Article

The Contingent Value

of Political Connections

on Donations to Chinese

Foundations: Exploring

the Moderating Role of

Transparency

Yuan Cheng*1 and Zhongsheng Wu*2

Abstract

Existing studies assume that the value of political connections is homogeneous

to different types of nonprofits and seldom consider their interplay with other

accountability mechanisms. Based on a multilevel analysis of 2,085 foundations

in China, this study builds and tests a theoretical framework of the contingent

value of political connections to nonprofits, treating transparency as a

moderator for the relationship between political connections and donations.

Our findings suggest that while transparency is positively associated with the

amount of donations obtained by foundations, political connections can help

foundations obtain more donations only when their transparency score is

higher than a certain threshold.

Keywords

political connections, transparency, private donations, moderation effect,

Chinese foundations

1University of Minnesota Twin Cities, Minneapolis, USA

2University of Maryland, College Park, USA

*The authors share equal authorship and contribution to this article.

Corresponding Author:

Zhongsheng Wu, School of Public Policy, University of Maryland, College Park,

2101 Van Munching Hall, College Park, MD 20742, USA.

Email: zswu2015@umd.edu

945969AASXXX10.1177/0095399720945969Administration & SocietyCheng and Wu

research-article2020

Cheng and Wu 37

Introduction

Inquiries about government–nonprofit relations have exploded in the last

two decades both in the Western and non-Western context. A wider recogni-

tion has been reached that it is hard to rely only on the public sector to solve

complex societal problems in modern society (Brinkerhoff & Brinkerhoff,

2002). In the Western context, the interest toward nonprofit organizations

and their relationships with the government is largely driven by the New

Public Management Movement and the prevalence of contracting out in

public service provision (Salamon, 2002). The funding flow from govern-

ments to nonprofits for public service provision dominates the mode of

government–nonprofit relationships. In the non-Western context, such as

China, two parallel yet contradictory trends happen simultaneously. On one

hand, governments are constraining the space of nonprofit organizations

which make democratic claims (Spires, 2011) or collective expression

(King et al., 2013). On the other hand, following the contracting model in

the Western context, governments are actively collaborating with nonprof-

its for public service provision (Jing & Chen, 2012; Zhao et al., 2016). In

both contexts, because of the significant power imbalances between gov-

ernment and nonprofits both in terms of resources and political authority, a

key focus of the scholarly inquiry is how government support or control

influences the operation and behaviors of nonprofit organization (Brooks,

2000; Cheng, 2019c; Gazley & Brudney, 2007; Guo, 2007).

Because of the power imbalances between the state and nonprofit sector,

especially in authoritarian regimes like China where governments often not

only control the resources but determine the survival of these organizations,

forming political connections with governments thus became an important

co-optation strategy both for for-profit firms (Sun et al., 2012) and nonprofit

organizations (Johnson & Ni, 2015; Yan & Luo, 2016; Zhan & Tang, 2016)

to survive and grow in a turbulent environment. Despite the accumulation of

literature on the benefits of political connections on the operation of nonprof-

its, what is missing in the literature is on how the impact of nonprofit political

connections may be moderated by or work together with other accountability

mechanisms such as transparency to influence private donations received by

nonprofit organizations.

Situated in 2,085 foundations in China, which are more than 67% of the

entire population of foundations established before January 1, 2013, in

China, we explore the question of how the transparency level of Chinese

foundations moderates the impact of political connections on their revenue-

raising capacities. This article makes several contributions to our under-

standing of the role of political connections for nonprofit operations and