The Dual Contingency Effects of Business Ties on Government Funding Acquisition by Chinese Nonprofit Organizations

ABSTRACT While cross‐sector relations involving nonprofit organizations (NPOs) have garnered increasing scholarly attention, the conditions under which business ties influence NPOs' ability to acquire government resources remain underexplored. This study investigates the dual contingency effects of business ties on NPOs' access to government subsidies in China. We have distinguished business ties with state‐owned enterprises (SOEs) from business ties with privately owned enterprises (POEs) and examined the moderating role of political capital. By analyzing data from 1280 Chinese foundations in 2014, we find that business ties with SOEs are significantly and positively associated with government subsidies, whereas ties with POEs exhibit a negative association. Further analysis reveals that the association between SOE ties and government subsidies is negatively moderated by political capital. These findings highlight the contingent value of business relations for NPOs seeking government resources. This research contributes to the literature on NPO–business relations by examining the impact of business ties on government resource acquisition, providing a more nuanced understanding of these ties differentiated by ownership type, and identifying a critical boundary condition.