Nonprofit Networks

• In Event: Procedure, Administration, and Organization

Abstract

We measure the existence, and strength, of relationships between nonprofit organizations, using the list of nonprofit board members reported on Form 990. By looking at the overlap in board memberships between pairs of organizations, we can determine the extent to which two nonprofits are controlled by the same people. Such relationships are required to be reported by the nonprofit on its annual information return, but we find that approximately 20% of these relationships go underreported. While the shape of the network resembles other “small world” networks, its structure seems to reflect the legal rules which govern the nonprofit sector. Sub-networks appear to form in tax-efficient ways: organizations which can receive tax-deductible contributions frequently link to organizations which cannot. On average, subnetworks perform better on key financial measures than individual organizations, suggesting that under-reporting may not be driven by intentional efforts to obscure under-performing components of the sub-network.

Authors

• Brian Galle, brian.galle@Berkeley.edu

• Stephanie Karol, stephanie.karol@treasury.gov