Hidden in Plain Sight: The Role of Corporate Board of Directors in Public Charity Lobbying
61 Pages Posted: 29 Sep 2020 Last revised: 8 Jan 2021
Date Written: January 7, 2021
Using IRS tax filings by public charities linked to lobbying disclosure and corporate board data, we show that charities with corporate directors on their boards spend more money on lobbying for the connected firms' industry interests. The effects of board connections are stronger when charities are connected to firms with greater lobbying expenditures or when charities are constrained on funding. We rule out spurious factors by controlling for firm-charity pair fixed effects, and address concerns of reverse causality using director turnovers as shocks to firm-charity connections. Consistent with quid-pro-quo relationships between firms and charities, we find that connected firms benefit from increased procurement contracts, and that connected charities receive more grants and donations. Our results highlight executive charitable engagement as a complementary avenue for corporate political activities.
Keywords: Corporate Political Activities, Corporate Governance, Board of Directors, Political Connections, Lobbying, Public Charities, Nonprofit Organizations
JEL Classification: D72, G34, G38, P16
Suggested Citation: Suggested Citation