The Research Of Political Ties And Business Ties Of Foundations And Their Influence On Organizational Performance

Foundations are playing an increasingly prominent role in bridging the gap between rich and poor,and promoting social harmony and sound development in the process of social governance in our country.Their development,however,is still facing the dilemma of insufficient resources,unreasonable resource structure and imperfect operational capacity.Thus,a growing number of foundations build up their competitive advantages(such as One Foundation)by establishing connections with governmental institutions and business organizations.Based on this phenomenon,this article explores how political ties and business connections of China's foundations affect organizational performance in the context of a transitional society.This study further probes into three sub-questions.Question 1: How do political ties and business connections affect the fund-raising performance of a foundation?Question 2: How do political ties and business connections affect the performance of public welfare activities of a foundation? Question 3: What is the contingency effect of foundation types on the above relations? On the basis of systematically reviewing the researches on foundations at home and abroad,this study first draws an overall analysis framework through exploratory multi-case studies.Second,this paper divides the dimensions of the fund-raising performance of a foundation into three categories,namely,donation income,government subsidy income and gross income,and then test the relations between political ties and the above dependent variables,and between business connections and the above dependent variables respectively using empirical analysis.Furthermore,this paper explores the relations between political ties and the performance of public welfare activities,relations between business connections and the performance of public welfare activities,and their interaction mechanisms.Lastly,by introducing “organization type” as the scenario variable,this paper investigates the boundary conditions of the relations between external relations of a foundation and its organizational performance,which fully reveals the relations between external relations of a foundation and organizational development and provides a basis for a deeper understanding of the development of China's foundations.The main conclusions of this study are as follows:First,a comparative study into the four cases of the eastern coastal area has confirmed the significant relevance between the organizational performance of a foundation and its political ties and business connections.Specifically,political ties and business connections affect the fund-raising performance of a foundation through the resource mechanism,and affect the performance of public welfare activities through the capacity mechanism.Second,the statistical analysis of a large sample of 1,621 foundations shows that political ties negatively affect the donation income of an organization while it positively affects the government subsidy income.On the contrary,business connections generate a significant positive impact on the donation income,but no significant impact on the government subsidy is registered.Both political ties and business connections have significant positive impacts on the gross income of a foundation.In addition,the impacts of political ties and business connections on the gross income of a foundation are complementary,which means that business connections positively promote the gross income with a high level of political ties while they negatively restrain the gross income with a low level of political ties.Third,the empirical analysis of the 1,565 foundations shows significant positive impacts of both political ties and business connections on the performance of public welfare activities.Meanwhile,complementary effects between political ties and business connections have been noted regarding the performance of public welfare activities of a foundation.In other words,business connections positively enhance the performance of public welfare activities with a high level of political ties while negatively restrain the performance of public welfare activities if political connections are at a low level.Fourth,the classification and regression analysis of the total samples based on organizational types show that business connections generate a significant positive impact on the fund-raising performance in the public offering foundation samples,but their impact turns negative when it comes to non-public offering foundations.In contrast,political ties negatively affect the performance of public welfare activities in public offering foundations while the effect turns positive when it comes to non-public offering foundations.Business connections,however,have significant positive impacts on the performance of public welfare activities,be it public offering foundations or non-public offering foundations.This study discusses the classic topic in foundation research-the relationship between organizational governance and organizational performance-in the context of foundations.Its main contributions are as follows: First,it discusses the "state and society" relationship from the microscopic perspective;second,it extends the external relations of a foundation from political ties to business connections;third,it further divides the performance of a foundation into the fund-raising performance and the performance of public welfare activities,and reveals the functional mechanism of political ties and business connections on the fund-raising performance and the performance of public welfare activities from the perspective of resources and capacities respectively.Based on the above results,this paper points out the direction for future research and implications of the relevant findings for the management of foundations.