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

See all articles by Changhyun Ahn

Changhyun Ahn

University of Florida - Department of Finance, Insurance and Real Estate

Joel F. Houston

University of Florida - Department of Finance, Insurance and Real Estate

Sehoon Kim

University of Florida - Department of Finance, Insurance and Real Estate

Date Written: January 7, 2021

Abstract

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

Ahn, Changhyun and Houston, Joel F. and Kim, Sehoon, Hidden in Plain Sight: The Role of Corporate Board of Directors in Public Charity Lobbying (January 7, 2021). Available at SSRN: https://ssrn.com/abstract=3700649 or http://dx.doi.org/10.2139/ssrn.3700649

Changhyun Ahn

University of Florida - Department of Finance, Insurance and Real Estate ( email )

P.O. Box 117168
Gainesville, FL 32611
United States

Joel F. Houston

University of Florida - Department of Finance, Insurance and Real Estate ( email )

P.O. Box 117168
Gainesville, FL 32611
United States

Sehoon Kim (Contact Author)

University of Florida - Department of Finance, Insurance and Real Estate ( email )

P.O. Box 117168
Gainesville, FL 32611
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
112
Abstract Views
748
rank
284,839
PlumX Metrics