Nonprofit Competitive Advantage in Grant Markets: Implications of Network Embeddedness

36 Pages Posted: 10 Apr 2013 Last revised: 30 Sep 2014

See all articles by Lewis Faulk

Lewis Faulk

American University - School of Public Affairs

Jesse D. Lecy

Arizona State University (ASU) - School of Public Affairs; Maxwell School of Syracuse University; Georgia State University - Andrew Young School of Policy Studies

Jasmine McGinnis

George Washington University - Trachtenberg School of Public Policy and Public Administration

Date Written: December 1, 2012

Abstract

This paper empirically addresses the effects that the network embeddedness of nonprofit organizations has on their ability to access philanthropic resources within competitive markets. Implicit in many criticisms of institutional philanthropy is the normative belief that nonprofits that are not ‘in’ the existing networks of foundation boards and staffs will be otherwise excluded from the grants process. We relate this proposition to theory on status signaling and test it in a network of nonprofits linked by grants from common foundations in metropolitan Atlanta during 2000 and 2005. Through this analysis we find that observable characteristics of nonprofits including age, size and their financial operating ratios explain success in grant markets. However, the reputation effects from greater network centrality in previous time periods provide additional advantages in securing resources. Our findings raise questions about the implications of socially constructed entrance barriers that may prevent otherwise competitive organizations from accessing financial resources.

Suggested Citation

Faulk, Lewis and Lecy, Jesse D. and McGinnis, Jasmine, Nonprofit Competitive Advantage in Grant Markets: Implications of Network Embeddedness (December 1, 2012). Available at SSRN: https://ssrn.com/abstract=2247783 or http://dx.doi.org/10.2139/ssrn.2247783

Lewis Faulk

American University - School of Public Affairs ( email )

Washington, DC 20016
United States

Jesse D. Lecy (Contact Author)

Arizona State University (ASU) - School of Public Affairs ( email )

Farmer Building 440G PO Box 872011
Tempe, AZ
United States

Maxwell School of Syracuse University ( email )

400 Eggers Hall
Syracuse, NY 13244
United States

Georgia State University - Andrew Young School of Policy Studies ( email )

Public Management and Policy
35 Broad Street, 6th Floor
Atlanta, GA 30303-3083
United States

Jasmine McGinnis

George Washington University - Trachtenberg School of Public Policy and Public Administration ( email )

805 21st Street, NW
Suite 601
Washington, DC 20052
United States

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