Hidden in Plain Sight: The Role of Corporate Board of Directors in Public Charity Lobbying

Abstract

We show that public charities with corporate directors on their boards are more likely to lobby on behalf of connected corporate interests. We document this result using granular fixed effects, alternative measures and subsamples, and shocks to board connections. The effects of connections are stronger when firms have greater political incentives, indicated by ex-ante lobbying demand and political connections as well as ex-post political benefits in the form of governmental procurement contracts. Governance improving policies help discipline charities who seek funding benefits through pro-corporate lobbying activities. Our results highlight executive charitable engagement as a complementary avenue for corporate political activities.

Keywords: Corporate Political Activities, Corporate Social Responsibility, Board of Directors, Political Connections, Lobbying, Public Charities, Nonprofit Organizations

JEL Classification: D72, G34, G38, P16