Network Connections and Competitively Awarded Funding: The impacts of board network structures and status interlocks on nonprofit organizations’ foundation grant acquisition

As You Sow, So Shall You Reap?

“…Of particular interest, controls for lagged foundation grant amounts from both the foundation that made the capacity grants and from other foundations had consistent, positive, and significant effects on future financial growth across all models. These findings support the theoretical perspectives that informed Hypothesis 3, and add to a growing body of evidence that external endorsements from institutional funders add to an organization's ability to garner future financial resources from additional stakeholders and increase their sustainability over time (Faulk et al ; Faulk et al ; Hager et al ).…”

“…This alternative hypothesis is informed by status‐signaling theory (Podolny ) and the role of stakeholders and network connections in developing an organization's reputation, funding, and financial growth (Esparza and Jeon ; Faulk, Johnson, and Lecy ; Faulk et al ; Galaskiewicz, Bielefeld, and Dowell ; Hager, Galaskiewicz, and Larson ). Any capacity‐building grant functions as an external endorsement of the organization to other funders, signaling that the organization is worthy of greater financial investment than other organizations, all else equal.…”

Reputation spillover effects from grant‐providing institutions

“…Institutions such as governments and foundations, in contrast, can request and process more detailed information. Various scholars found that the amount and number of grants is potentially higher for organizations that send positive objective signals, such as financial health, funding experience, and a considerable organizational size (Ashley & Faulk, 2010;Faulk, Willems, McGinnis Johnson, & Stewart, 2016;Lecy & Van Slyke, 2013;Lu, 2015;McGinnis & Ashley, 2011). McGinnis Johnson (2016 argues that foundations can request documents of nonprofit organizations that apply for a grant, which provide additional organizational information, for example about board members, performance records, and funding history.…”

“…Revenue diversification displays financial stability (Carroll & Stater, 2009;Searing, 2018), which leads to more fund-raising efforts that help to inform and educate the public about a public service organization or its cause (Andreoni & Payne, 2011). Hence, although foundation and government grants may decrease the need for fund-raising as the organization is already financially stable (Andreoni & Payne, 2003;Faulk et al, 2016;Hughes et al, 2014), additional grants enable nonprofit organizations to increase their fund-raising and promotion expenditures. With increasing fund-raising efforts, a crowding-in of individual support is likely.…”

Leadership, Performance, and Reputation: A multi-method empirical view on the public and nonprofit sectors - Habilitation Synopsis

“…The study in Article 10 (Faulk et al 2016) investigates whether nonprofit board connections with other nonprofit organizations and foundations explain organizational performance in earning foundation grants. Using a sample of 402 nonprofits and sixty-eight foundations in a single metropolitan area in the US, we find that greater connectedness and status interlocks significantly influence organizations' ability to acquire resources.…”