[Preprint] Funding nonprofits in a networked society: Two modes of crowding mechanism of government support


Ji Ma
LBJ School of Public Affairs and RGK Center, UT Austin

Date Written: July 17, 2018

This paper studies the impact of social relations on the crowding process of government funding–the effect that government funding to nonprofits may crowd out or crowd in private donations. By using a novel panel dataset across 12 years from the People’s Republic of China, this study suggests that, although government funding to a nonprofit may crowd out the private donations to the same organization, private donations are not reduced but redistributed to other nonprofits in the organizational network. Policy and practical implications are discussed.

Keywords: crowd out, crowd in, social relation, government funding, nonprofit organization, networked society

Full-text: https://ssrn.com/abstract=3262798