Contingencies or institutions? Drivers of venture philanthropy initiation for nonprofit sector growth by local governments

In the past three decades, local governments have initiated venture philanthropy (VP) to strengthen non-profit organisations (NPOs). However, there has been little scholarly analysis of the dynamics of VP initiation. To address this gap, this study builds on contingency theory and neo-institutional theory and connects three factors – target population characteristics, coercive pressure, and mimetic pressure – to the initiation of VP by local governments. This study examines this claim using a series of regression analyses of data for 79 Chinese cities from 2011 to 2023. While the extant literature shows that the initiation of VP is intended to address the weaknesses of NPOs (i.e. an efficiency-driven model), this study indicates that the initiation of VP may be a political decision, made by local governments in response to mimetic pressure (i.e. a legitimacy-driven model). This study advances scholarly knowledge about VP, policy tools, and government-non-profit relations.