Government Funding and Nonprofit Revenues in China: A Cross-Regional Comparison

Abstract

This study examines the various effects of government funding on nonprofit revenues in China through a cross-regional comparison. We argue that central government funding increases nonprofit revenues by improving nonprofits’ legitimacy/reputation and competitive capacities. Based on a dataset of 2,058 questionnaires and 65 interviews with nonprofits receiving central government funding to participate in social service projects from 2013 to 2017, we find that having more central government funding enables nonprofits to raise more revenues through local government funding, private donations, and commercial revenues. A cross-regional comparison shows that central government funding has more effects on nonprofit revenues in the non-western region than in the western region. Our interviews suggest that resource accessibility and marketization institutions determine the various effects of central government funding on nonprofit revenues in western and non-western regions. The findings reveal nuances in the effects of government funding on nonprofit revenues through a cross-regional comparison under authoritarianism.