When government becomes the principal philanthropist: The effect of public funding on patterns of nonprofit governance

This study uses board governance as analytical lenses for exploring the effect of government funding on the representational capacities of nonprofit organizations. Based on a typology of governance patterns that indicate the extent to which nonprofit organizations represent community interests, it presents analyses of survey data on urban charitable organizations to show how nonprofit governance patterns are associated with levels of government funding as well as other environmental and contextual factors. The findings suggest that government funding reliance decreases the likelihood that a nonprofit organization would develop a strong, community board (i.e., a board with both higher community representation and stronger board power over chief executive) through two possible mechanisms of legitimization – the democratization effect and the professionalization effect. These effects, however, might be counter-balanced by the use of volunteer labor, which increases the likelihood of a strong, community board