Hidden in Plain Sight: The Role of Corporate Board of Directors in Public Charity Lobbying

Abstract

We show that public charities with corporate directors on their boards are more likely to lobby on behalf of connected corporate interests. We document corporate influence on nonprofit lobbying decisions using granular fixed effects, alternative measures and subsamples, and shocks to board connections. The effects of connections are stronger when firms themselves have greater lobbying expenditures, when their directors are more politically networked, and when charities face funding constraints. Suggesting aligned interests, connected firms benefit from more procurement contracts and charities from more grants and donations. Our results highlight executive charitable engagement as a complementary avenue for corporate political activities.

Keywords: Corporate Political Activities, Corporate Social Responsibility, Board of Directors, Political Connections, Lobbying, Public Charities, Nonprofit Organizations

JEL Classification: D72, G34, G38, P16