Skip to main content
SpringerLink
Log in

Exploring Factors that Influence Voluntary Disclosure by Chinese Foundations

  • Original Paper
  • Published:
VOLUNTAS: International Journal of Voluntary and Nonprofit Organizations Aims and scope Submit manuscript

Abstract

In the context of government regulation and social demand, Chinese foundations have increasingly faced pressure to make their organizations more transparent. Our paper explores the factors associated with voluntary disclosure by foundations in China. Building on the literature on transparency and foundation development in China, we explore how the public (donations) and the government (funding and control) might influence the voluntary transparent behaviors of Chinese foundations. Using the database of the China Foundation Center, we perform regression analysis of N = 2074 Chinese foundations. Controlling for organization size, age, and other characteristics, we find that foundations that depend more on donations, collect more restricted funds, receive fewer government funds, and operate with less government control have a higher probability of offering voluntary disclosure. We then discuss organizational strategies and policy implications for building a healthy and transparent foundation sector in China.

Résumé

Dans un contexte de règlementation gouvernementale et de demande sociale, les fondations chinoises font de plus en plus face à des pressions pour rendre leurs organisations plus transparentes. Notre article étudie les facteurs associés à la communication d’informations volontaire par des fondations en Chine. S’appuyant sur les publications traitant de la transparence et du développement des fondations en Chine, nous explorons la façon dont le public (dons) et l’État (financement et contrôle) peuvent influencer les comportements volontaires de transparence des fondations chinoises. En utilisant la base de données de la China Foundation Center (Centre des fondations de Chine), nous effectuons une analyse de régression de N = 2074 fondations chinoises. Après avoir contrôlé la taille, l’âge et les autres caractéristiques des organisations, nous constatons que les fondations qui dépendent le plus des dons recueillent des fonds plus limités, reçoivent moins de fonds publics et exercent leurs activités avec moins de contrôle étatique sont plus susceptibles de communiquer volontairement des informations. Nous examinons ensuite les stratégies des organisations et les implications politiques pour créer un secteur des fondations sain et transparent en Chine.

Zusammenfassung

Im Zusammenhang mit staatlichen Regulierungen und der gesellschaftlichen Forderung stehen chinesische Stiftungen vermehrt unter Druck, ihre Organisationen transparenter zu machen. Unsere Abandlung untersucht die Faktoren in Verbindung mit freiwilligen Offenlegungen von Stiftungen in China. Wir stützen uns auf die Literatur zum Thema Transparenz und Entwicklung von Stiftungen in China und erforschen, wie die Öffentlichkeit (Spenden) und die Regierung (Finanzierung und Kontrolle) unter Umständen Einfluss auf die freiwillige Transparenz chinesischer Stiftungen nehmen. Wir führen mit Hilfe der Datenbank des Stiftungsverbands China Foundation Center eine Regressionsanalyse von chinesischen Stiftungen mit N = 2074 durch. Bei einer Kontrolle der Organisationsgröße, des Alters der Organisation und anderer Merkmale kommen wir zu dem Ergebnis, dass Stiftungen, die vermehrt auf Spenden angewiesen sind, begrenzte Mittel und weniger staatliche Finanzierungen erhalten und einer geringeren staatlichen Kontrolle unterliegen, eher dazu neigen, Offenlegungen freiwillig vorzunehmen. Anschließend diskutieren wir die Organisationsstrategien und politischen Implikationen für die Entwicklung eines soliden und transparenten Stiftungssektors in China.

Resumen

En el contexto de la reglamentación gubernamental y la demanda social, las fundaciones chinas se han enfrentado cada vez más a la presión para que sus organizaciones sean más transparentes. Nuestro documento explora los factores asociados a la divulgación voluntaria por parte de las fundaciones en China. Basándonos en el material publicado sobre la transparencia y el desarrollo de las fundaciones en China, exploramos cómo el público (donaciones) y el gobierno (financiación y control) pueden influir en los comportamientos transparentes voluntarios de las fundaciones chinas. Utilizando la base de datos del Centro de Fundaciones de China, realizamos un análisis de regresión de N = 2074 fundaciones chinas. Controlando el tamaño, la antigüedad de la organización y otras características, encontramos que las fundaciones que dependen más de las donaciones, recaudan más fondos restringidos, reciben menos fondos del gobierno, y operan con menos control gubernamental tienen una mayor probabilidad de ofrecer una divulgación voluntaria. Después, tratamos las estrategias organizativas y las implicaciones de las políticas para construir un sector fundacional sano y transparente en China.

摘要

在政府监管与社会需求的背景下,及 促进其组织更加透明化,中国基金面临着越来越大的压力。本论文探究中国基金会自愿披露相关的各种因素。在研究透明度及基金会在中国的发展相关的文献的基础上,我们探究了公众(捐献)与政府(资助与控制)是如何影响中国基金会的自愿透明化行为。利用中国基金会中心的数据库,我们对中国基金会进行了回归分析(N = 2074)。通过控制组织规模、成立時間以及其它 特性,我们发现,如果更加依赖捐献、接收較多的受限资金、接收政府资助较少、运营受政府控制較小,其提供自愿披露的可能性更高。接着,我们讨论在中国建设健康与透明基金会行业的策略与政策意义。

ملخص

في سياق التنظيم الحكومي والطلب الإجتماعي، المؤسسات الصينية تواجه ضغوطا” متزايدة لجعل منظماتهم أكثر شفافية. يستكشف بحثنا العوامل المرتبطة بالكشف التطوعي من قبل المؤسسات في الصين. بناءا”على ما كتب حول الشفافية و التنمية المؤسسية في الصين، نحن نستكشف كيف الجمهور (التبرعات) والحكومة (التمويل والسيطرة) قد يؤثرون على السلوكيات التطوعية الشفافة للمؤسسات الصينية. بإستخدام قاعدة بيانات مركز مؤسسة الصين، نحن نؤدي تحليل الإنحدار من (N = 2074) مؤسسات صينية. السيطرة على حجم المنظمة، العمر، وغيرها من الخصائص، نجد أن المؤسسات التي تعتمد أكثر على التبرعات، تجمع أموال أكثر تقييدا”، تتلقي تمويل حكومي قليل، وتعمل مع أقل سيطرة من الحكومة لديها إحتمال أكبر لتقديم الكشف التطوعي. ثم نناقش الإستراتيجيات التنظيمية والآثار المترتبة على السياسات لبناء قطاع مؤسسي صحي وشفاف في الصين.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1
Fig. 2

Similar content being viewed by others

Notes

  1. Several charity foundation scandals have occurred in China, such as the “Henan’s Soong Ching Ling Foundation fund misuse” in 2011 (www.infzm.com/content/62743) and “China Charities Aid Foundation for Children financial misinformation” in 2014 (www.gongyi.people.com.cn/n/2014/0221/c151132-24431163.html).

  2. In Chinese history, foundation-like organizations existed during the Sui Dynasty and Song Dynasty (Wang and Xu 2008). Such organizations were supported by private farmland endowment, and they rented the endowed farmland to create income. The rental income was used to establish schools or help needy clansmen. However, in this article, we focus on foundations that emerged in modern China with the official definition and registration.

  3. To assess the reliability of the CFC database, our research team learned about the procedures taken to ensure data quality during our field visit to the center: (1) The CFC first collects annual reports disclosed by foundations or Civil Affairs Departments and uses this disclosed information to build its base-line database. (2) A daily task of CFC data managers is to search any available channels (social media or print media) and update the database. (3) Because the CFC is an independent third-party organization without control from any foundations or the government, it has no incentive to withhold any information. (4) The total number of foundations, as displayed by the CFC database, is consistent with China Civil Affairs’ Statistical Yearbook, which is published annually by the Ministry of Civil Affairs.

  4. Our research team accessed the CFC database in March 2013, when foundations’ 2005–2011 annual reports were available. We thus used the most recent 2011 annual reports to generate our independent variables. However, our dependent variables—VDI, VDIg, and VDIm—were coded in April 2014. Tremblay-Boire and Prakash (2015) and Saxton et al. (2012) used similar data collection strategies.

References

  • Anheier, H. K. (2005). Nonprofit organizations: Theory, management, policy. London, UK: Routledge.

    Google Scholar 

  • Backer, T. E. (2000). Strengthening nonprofits: Capacity-building and philanthropy. Encino, CA: Human Interaction Research Institute.

    Google Scholar 

  • Barako, D. G., Hancock, P., & Izan, H. Y. (2006). Factors influencing voluntary corporate disclosure by Kenyan companies. Corporate Governance, 14(2), 107–125.

    Article  Google Scholar 

  • Beckert, J. (2010). Institutional isomorphism revisited: Convergence and divergence in institutional change. Sociological Theory, 28(2), 150–166.

    Article  Google Scholar 

  • Behn, B. K., DeVries, D. D., & Lin, J. (2010). The determinants of transparency in nonprofit organizations: An exploratory study. Advances in Accounting, 26(1), 6–12.

    Article  Google Scholar 

  • Birkinshaw, P. (2006). Transparency as a human right. In C. Hood & D. Heald (Eds.), Transparency: The key to better governance? (pp. 47–58). New York: Oxford University Press.

    Google Scholar 

  • Brody, E. (2003). Accountability and public trust. In L. M. Salamon (Ed.), The state of nonprofit America. Washington, DC: Brookings Institution Press.

    Google Scholar 

  • Bujaki, M., & McConomy, B. J. (2010). Corporate governance: Factors influencing voluntary disclosure by publicly traded Canadian firms. Canadian Accounting Perspectives, 1(2), 105–139.

    Article  Google Scholar 

  • Calabrese, T. D. (2011). Public mandates, market monitoring, and nonprofit financial disclosures. Journal of Accounting and Public Policy, 30, 71–88.

    Article  Google Scholar 

  • Carman, J. G., & Fredericks, K. A. (2010). Evaluation capacity and nonprofit organizations: Is the glass half-empty or half-full? American Journal of Evaluation, 31(1), 84–104.

    Article  Google Scholar 

  • Chatterjee, S., & Hadi, A. (2006). The use of regression analysis by example (4th ed.). Hoboken, NJ: Wiley-Interscience.

    Book  Google Scholar 

  • Chow, C. W., & Wong-Boren, A. (1987). Voluntary financial disclosure by Mexican corporations. The Accounting Review, 62(3), 533–541.

    Google Scholar 

  • Cormier, D., Aerts, W., Ledoux, M. J., & Magnan, M. (2010). Web-based disclosure about value creation processes: A monitoring perspective. A Journal of Accounting, Finance, and Business Studies, 46(3), 320–347.

    Google Scholar 

  • Dainelli, F., Manetti, G., & Sibilio, B. (2013). Web-based accountability practices in non-profit organizations: The case of national museums. VOLUNTAS: International Journal of Voluntary and Nonprofit Organizations, 24, 649–665.

    Article  Google Scholar 

  • DiMaggio, P. J., & Powell, W. W. (1983). The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields. American Sociological Review, 48(2), 147–160.

    Article  Google Scholar 

  • Elbers, W., & Arts, B. (2011). Keeping body and soul together: Southern NGOs’ strategic responses to donor constraints. International Review of Administrative Sciences, 77(4), 713–732.

    Article  Google Scholar 

  • Fernandez, K. M., & Hager, M. A. (2014). Public and private dimensions of grantmaking foundations. Public Administration Quarterly, 38(3), 405–439.

    Google Scholar 

  • Forman, C. (2005). The corporate digital divide: Determinants of internet adoption. Management Science, 51(4), 641–654.

    Article  Google Scholar 

  • Froelich, K. A. (1999). Diversification of revenue strategies: Evolving resource dependence in nonprofit organizations. Nonprofit and Voluntary Sector Quarterly, 28(3), 246–268.

    Article  Google Scholar 

  • Frumkin, P., & Galaskiewicz, J. (2004). Institutional isomorphism and public sector organizations. Journal of Public Administration Research and Theory, 14(3), 283–307.

    Article  Google Scholar 

  • Fung, A., Graham, M., & Weil, D. (2007). Full disclosure: The perils and promise of transparency. New York, NY: Cambridge University Press.

    Book  Google Scholar 

  • Gandía, J. L. (2009). Internet disclosure by nonprofit organizations: Empirical evidence of nongovernmental organizations for development in Spain. Nonprofit and Voluntary Sector Quarterly, 40(1), 57–78.

    Article  Google Scholar 

  • Gelman, A., & Hill, J. (2007). Data analysis using regression and multilevel/hierarchical models. New York, NY: Cambridge University Press.

    Google Scholar 

  • Guo, C. (2007). When government becomes the principal philanthropist: The effects of public funding on patterns of nonprofit governance. Public Administration Review, 67(3), 458–473.

    Article  Google Scholar 

  • Guo, C., & Brown, W. A. (2006). Community foundation performance: Bridging community resources and needs. Nonprofit and Voluntary Sector Quarterly, 35(2), 267–287.

    Article  Google Scholar 

  • Heald, D. (2006). Varieties of transparency. In C. Hood & D. Heald (Eds.), Transparency: The key to better governance? (pp. 25–46). New York, NY: Oxford University Press.

    Google Scholar 

  • Healy, P. M., & Palepu, K. G. (2001). Information asymmetry, corporate disclosure, and the capital markets: A review of the empirical disclosure literature. Journal of Accounting and Economics, 31, 405–440.

    Article  Google Scholar 

  • Hillman, A. J. (2005). Politicians on the board of directors: Do connections affect the bottom line? Journal of Management, 31(3), 464–481.

    Article  Google Scholar 

  • Hood, C. (2007). What happens when transparency meets blame-avoidance? Public Management Review, 9(2), 191–210.

    Article  Google Scholar 

  • Hoole, E., & Patterson, T. E. (2008). Voices from the field: Evaluation as part of a learning culture. In J. G. Carman & K. A. Fredericks (Eds.), Nonprofits and evaluation. New directions for evaluation (pp. 93–113). San Francisco, CA: Jossey-Bass.

    Google Scholar 

  • Khanna, T., Palepu, K. G., & Srinivasan, S. (2004). Disclosure practices of foreign companies interacting with U.S. markets. Journal of Accounting Research, 42(2), 475–508.

    Article  Google Scholar 

  • Lang, M., & Lundholm, R. (1993). Cross-sectional determinants of analyst ratings of corporate disclosures. Journal of Accounting Research, 31(2), 246–271.

    Article  Google Scholar 

  • Lenkowsky, L. (2003). Foundations and corporate philanthropy. In L. M. Salamon (Ed.), The state of nonprofit America (pp. 355–386). Washington, DC: Brookings Institution Press.

    Google Scholar 

  • Lester, R. H., Hillman, A., Zardkoohi, A., & Cannella, A. A, Jr. (2008). Former government officials as outside directors: The role of human and social capital. Academy of Management Journal, 51(5), 999–1013.

    Article  Google Scholar 

  • Liu, Y., & Liu, X. (2004). Realistic thinking on the transparency of governmental information in China. China Soft Science, 9, 24–31.

    Article  Google Scholar 

  • Liu, Z., Zhang, X., & You, Y. (2013). Determining factors in online information disclosure of NGOs: A Chinese foundation case study. Chinese Public Administration, 11, 46–51.

    Google Scholar 

  • Ma, Q. (2002). The governance of NGOs in China since 1978: How much autonomy? Nonprofit and Voluntary Sector Quarterly, 31(3), 305–328.

    Article  Google Scholar 

  • McGinnis, J. J., & Ni, N. (2015). The impact of political connections on donations to Chinese NGO’s. International Public Management Journal, 18(4), 514–535.

    Article  Google Scholar 

  • Meyer, J. W., & Rowan, B. (1977). Institutionalized organizations: Formal structures as myth and ceremony. American Journal of Sociology, 83(2), 340–363.

    Article  Google Scholar 

  • Mosley, J. E., & Galaskiewicz, J. (2015). The relationship between philanthropic foundation funding and state-level policy in the era of welfare reform. Nonprofit and Voluntary Sector Quarterly, 44(6), 1225–1254.

    Article  Google Scholar 

  • Nah, S., & Saxton, G. D. (2012). Modeling the adoption and use of social media by nonprofit organizations. New Media & Society, 15(2), 294–313.

    Article  Google Scholar 

  • Okten, C., & Weisbrod, B. A. (2000). Determinants of donations in private nonprofit markets. Journal of Public Economics, 75(2), 255–272.

    Article  Google Scholar 

  • Oliver, C. (1991). Strategic responses to institutional processes. Academy of Management Review, 16(1), 145–179.

    Article  Google Scholar 

  • Ostrander, S. A. (2007). The growth of donor control: Revisiting the social relations of philanthropy. Nonprofit and Voluntary Sector Quarterly, 36(2), 356–372.

    Article  Google Scholar 

  • Papenfuß, U., & Schaefer, C. (2010). Improving public accountability by aligning reporting to organizational changes in public service provision—An empirical internet study of all Austrian, German and Swiss towns and states from an agency-theory perspective. International Review of Administrative Sciences, 76(3), 555–576.

    Article  Google Scholar 

  • Pfeffer, J. A., & Salancik, G. R. (2003). The external control of organizations: A resource dependence perspective. Stanford, CA: Stanford University Press.

    Google Scholar 

  • Phillips, S. D. (2013). Shining light on charities or looking in the wrong place? Regulation-by-transparency in Canada. VOLUNTAS: International Journal of Voluntary and Nonprofit Organizations, 24, 881–905.

    Article  Google Scholar 

  • Prewitt, K. (2006). Foundations. In W. W. Powell & R. Steinberg (Eds.), The nonprofit sector: A research handbook (pp. 355–377). New Haven, CT: Yale University Press.

    Google Scholar 

  • Rodriguez, M. M. G., Caba Perez, M. C., & Lopez Godoy, M. (2012). Determining factors in online transparency of NGOs: A Spanish case study. VOLUNTAS: International Journal of Voluntary and Nonprofit Organizations, 23, 661–683.

    Article  Google Scholar 

  • Saxton, G. D., & Guo, C. (2011). Accountability online: Understanding the web-based accountability practices of nonprofit organizations. Nonprofit and Voluntary Sector Quarterly, 40(2), 270–295.

    Article  Google Scholar 

  • Saxton, G. D., Kuo, J. S., & Ho, Y. C. (2012). The determinants of voluntary financial disclosure by nonprofit organizations. Nonprofit and Voluntary Sector Quarterly, 41(6), 1051–1071.

    Article  Google Scholar 

  • Scott, W. R. (2003). Organizations: Rational, natural, and open systems (5th ed.). Upper Saddle River, NJ: Prentice Hall.

    Google Scholar 

  • Sidel, M. (2010). The promise and limits of collective action for nonprofit self-regulation: Evidence from Asia. Nonprofit and Voluntary Sector Quarterly, 39(6), 1039–1056.

    Article  Google Scholar 

  • Smith, S. R. (1999). Government financing of nonprofit activity. In E. T. Boris & C. E. Steuerle (Eds.), Nonprofits & government: Collaboration & conflict. Washington, DC: Urban Institute Press.

    Google Scholar 

  • Sun, C. (2013). On problems of local government information disclosure: Content defect and improvement measures. Chinese Public Administration, 12, 80–83.

    Google Scholar 

  • Szper, R., & Prakash, A. (2011). Charity watchdogs and the limits of information-based regulation. VOLUNTAS: International Journal of Voluntary and Nonprofit Organizations, 22, 112–141.

    Article  Google Scholar 

  • Tremblay-Boire, J., & Prakash, A. (2015). Accountability.org: Online disclosures by U.S. nonprofits. VOLUNTAS: International Journal of Voluntary and Nonprofit Organizations, 26(2), 693–719.

    Article  Google Scholar 

  • Trussel, J. M., & Parsons, L. M. (2007). Financial reporting factors affecting donations to charitable organizations. Advances in Accounting, 23, 263–285.

    Article  Google Scholar 

  • Verbruggen, S., Christiaens, J., & Milis, K. (2011). Can resource dependence and coercive isomorphism explain nonprofit organizations’ compliance with reporting standards? Nonprofit and Voluntary Sector Quarterly, 40(1), 5–32.

    Article  Google Scholar 

  • Verschuere, B., Beddeleem, E., & Verlet, D. (2014). Determinants of innovative behaviour in Flemish nonprofit organizations: An empirical research. Public Management Review, 16(2), 173–198.

    Article  Google Scholar 

  • Wang, M., & Jia, X. (2002). An analysis of China’s NGO. Management World, 8, 30–43.

    Google Scholar 

  • Wang, M., & Xu, Y. (2008). An outline of a theory of foundations. China Nonprofit Review, 1, 16–54.

    Google Scholar 

  • Zhuang, J., Saxton, G. D., & Wu, H. (2014). Publicity vs. impact in nonprofit disclosures and donor preferences: A sequential game with one nonprofit organization and N donors. Annals of Operations Research, 221(1), 469–491.

    Article  Google Scholar 

Download references

Funding

This is an independent research project. No funding received for this project.

Author information

Authors and Affiliations

  1. The University of Hong Kong, Hong Kong, China

    Lin Nie & Helen K. Liu

  2. Tsinghua University, Beijing, China

    Wenhao Cheng

Authors
  1. Lin Nie
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Helen K. Liu
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Wenhao Cheng
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Helen K. Liu.

Ethics declarations

Conflict of Interest

The authors declare that they have no conflict of interest.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Nie, L., Liu, H.K. & Cheng, W. Exploring Factors that Influence Voluntary Disclosure by Chinese Foundations. Voluntas 27, 2374–2400 (2016). https://doi.org/10.1007/s11266-016-9689-0

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11266-016-9689-0

Keywords

Search

Navigation