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Governance and financial performance in China's charitable foundations

Zhou, Qingyi; Nguyen, Tam


Qingyi Zhou

Tam Nguyen


The study aims at investigating the relationship between non-profit governance and financial performance based on the top 50 most transparent China's charitable foundations in a period of 5 years (2013-2017). Underlying by a mixed theories (agency theory, stewardship theory and resource dependence theory), this study measures governance practice from the perspectives of board characteristics (i.e. board size, tenure, frequency of meetings, business background and political connections). While financial performance is examined by three cost efficiency ratios: program ratio, operating ratio and fundraising ratio. The study found that whilst board size is positively related to program efficiency, the political relation of the board is inversely related to program efficiency. In addition, younger foundations seems to perform better in program efficiency compared with older foundations. Finally, increasing donation income can improve both program efficiency and operating efficiency. The findings from this study has a significance to academic and practice in relation to enhancing governance practice in non-profit organizations.

Conference Name 18th Workshop on Accounting and Finance in Emerging Economies
Start Date Oct 26, 2018
End Date Oct 26, 2018
Acceptance Date Oct 12, 2018
Publication Date Oct 26, 2018
Deposit Date Mar 5, 2019
Keywords Non-profit organisations; Foundations; Governance; Board of Trustees; Financial Performance; Agency Theory 2
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