December 19, 2012

Corporate Donors Favor 'Elite' Nonprofits, Study Finds

"Elite" nonprofits like arts institutions and colleges tend to benefit more from corporate giving than do social-welfare charities, according to a study published in the journal Organization Science.

The higher the concentration of corporate headquarters in a city, the faster the growth of local nonprofits, the study found. But the impact was greater on nonprofits that enrich the culture or higher learning of a community than on groups that aim to alleviate social problems.

The study examined the influence of locally headquartered corporations in 100 U.S. cities from 1987 to 2002.

"Corporations are vessels for aggregating resources," Gerald Davis, a professor at the University of Michigan's Ross School of Business and a co-author of the study, said in a written statement announcing the study's publication. "We find that across every major American city, the resources of the corporate sector are most beneficial for elite-oriented nonprofits."

Christopher Marquis, a Harvard Business School professor and lead author of the study, said the new research supported other studies suggesting that philanthropy may be a "vehicle to benefit elite interests."

"Corporate effects on elite-oriented nonprofits are enhanced when there is a community structure in place that organizes and validates the elite," Mr. Marquis said in a written statement.

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