Does Government Funding Alter Nonprofit Governance? Evidence from New York City Nonprofit Contractors

31 Pages Posted: 13 Aug 2001  

Katherine M. O'Regan

New York University (NYU) - Robert F. Wagner Graduate School of Public Service

Sharon M. Oster

Yale School of Management

Date Written: July 2001

Abstract

This paper explores the relationship between nonprofit board governance practices and government contracting. Monitoring by a board is one way a governmental agency can help to insure quality performance by its contractors. Agencies could thus use both their selection process and their post-contracting power to influence board practice. Using a new, rich data set on the nonprofit contractors of New York City, we test a series of hypotheses on the effects of government funding on board practices. We find that significant differences exist in board practices as a function of government funding levels, differences that mark a shift of focus or energy away from some activities, towards others. Trustees of nonprofits which receive high government funding are significantly less likely to engage in the traditional board functions, such as fund raising, while more likely to engage in financial monitoring and advocacy.

Keywords: governance, government contracting, nonprofits, public management

JEL Classification: L3

Suggested Citation

O'Regan, Katherine M. and Oster, Sharon M., Does Government Funding Alter Nonprofit Governance? Evidence from New York City Nonprofit Contractors (July 2001). Yale SOM Working Paper No. PM-03. Available at SSRN: https://ssrn.com/abstract=279310 or http://dx.doi.org/10.2139/ssrn.279310

Katherine M. O'Regan

New York University (NYU) - Robert F. Wagner Graduate School of Public Service ( email )

The Puck Building
295 Lafayette Street, Second Floor
New York, NY 10012
United States
212-998-7498 (Phone)
212-995-3890 (Fax)

Sharon M. Oster (Contact Author)

Yale School of Management ( email )

135 Prospect Street
P.O. Box 208200
New Haven, CT 06520-8200
United States
203-432-5969 (Phone)

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