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Legitimacy, Board Involvement, and Resource Competitiveness: Drivers of NGO Revenue Diversification

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Abstract

Revenue diversification, which generates resources from different streams and an increased number of sources, has been highly recommended as an active strategy to maintain revenue stability. To help NGOs to strategically improve or maintain revenue diversification, we identified managerial and environmental drivers of revenue diversification. Using a national sample of 429 Chinese grassroots NGOs, we investigated the extent to which organizational legitimacy, board involvement, and resource competitiveness influence organizational revenue diversification. Our findings reveal that managerial factors, including organizational legitimacy and board involvement, could increase organizational revenue diversification in terms of the organizational revenue diversification index (HHI) and the number of revenue sources. Regarding environmental factors, regional organizational density may exert a negative influence, whereas revenue diversification could improve with increasing regional GDP.

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Change history

  • 29 August 2019

    The present special issue (Philanthropy in China: Institutional and Social Factors) should also include the previously published papers linked below.

Notes

  1. Including municipalities and autonomous regions.

  2. The same division methods of four major regions is applied as the “China Statistical Yearbook (2011)”, including 31 provinces(municipalities and autonomous regions), which are divided as following: ten provinces (municipalities) of east China, including Beijing, Tianjin, Hebei, Shanghai, Jiangsu, Zhejiang, Fujian, Shandong, Guangdong, and Hainan; six provinces of central China, including Shanxi, Anhui, Jiangxi, Henan, Hubei, and Hunan; 12 provinces (municipalities and autonomous regions) of west China, including Inner Mongolia, Guangxi, Chongqing, Sichuan, Guizhou, Yunnan, Tibet, Shaanxi, Gansu, Qinghai, Ningxia, and Xinjiang; three provinces of northeast China, including Liaoning, Jilin, and Heilongjiang.

  3. Data source for each province is from provincial statistical yearbooks (2012 edition).

  4. Registration status including registered as social organizations, private non-commercial enterprises, for-profit businesses, and internal organizations (of NGOs or public institutions, such as universities).

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Acknowledgements

We gratefully thank Angela Bies, endowed associate professor of global philanthropy and nonprofit leadership at the School of Public Policy at the University of Maryland, for her assistance giving us suggestion and comments in revising our paper, including content, literature, language, graph, and format. We also appreciate the interviewees from the grassroots NGOs, for their patience to help us to finish the data collecting and sharing their experience and opinion on philanthropy. Finally, we want to thank the interviewers around different regions and organizations, without their effort, we could not finish this nationwide survey.

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Authors and Affiliations

  1. Department of Sociology, Nankai University in China, Tianjin, China

    Jiangang Zhu

  2. Department of Social Work, Chinese University of Hong Kong, Shatin, Hong Kong

    Shihua Ye

  3. Institute of Philanthropic Studies, The Sun Yat-sen University, Guangzhou, China

    Yifei Liu

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  1. Jiangang Zhu
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Correspondence to Shihua Ye.

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Zhu, J., Ye, S. & Liu, Y. Legitimacy, Board Involvement, and Resource Competitiveness: Drivers of NGO Revenue Diversification. Voluntas 29, 1176–1189 (2018). https://doi.org/10.1007/s11266-018-0044-5

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