Meng Ye, Jiahuan Lu,Qiang Dong.2026.Financial Conditions, Political Connections, and Nonprofit Investment Income: Evidence From Chinese Foundations

Financial Conditions,  Political Connections, and  Nonprofit Investment  

Income: Evidence From  Chinese Foundations

Abstract:Investment income offers nonprofits a flexible and sustainable revenue source, yet it  remains underexamined in the literature, particularly outside Western contexts. This  study addresses that gap by analyzing panel data from Chinese foundations from 2018  to 2022 to examine how financial and political factors are associated with investment  participation and investment income. We find that investment engagement among  Chinese foundations is limited, and among participants, investment income levels  are modest.Drawing on resource dependence and institutional theories, the analysis  considers two financial conditions, financial autonomy and financial leverage, and  a political factor, political connections. The findings deepen our understanding of  nonprofit investment income and highlight how financial conditions and political  connections relate to investment engagement and investment income.