Agency Consequences of Government Funding in Nonprofit Organizations

S. Verbruggen (), K. Vlassenroot and Johan Christiaens

Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium from Ghent University, Faculty of Economics and Business Administration

Abstract: Nonprofit organizations often rely on governmental grants to finance their social programs. Under certain circumstances, the procurement of these grants causes an agency-relation between the board of directors and the management of the organization. Using archival data from a substantial number of nonprofit organizations’ financial statements, the influence of different types of government grants on the agency-relation between board and management is tested. The study reveals an increase in the agency-relationship depending on the level of efforts necessary to achieve the grants.

Pages: 29 pages
Date: 2011-02
New Economics Papers: this item is included in nep-soc
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http://wps-feb.ugent.be/Papers/wp_11_711.pdf (application/pdf)

Related works:
Working Paper: Agency consequences of government funding in nonprofit organizations (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:rug:rugwps:11/711

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