Financial Conditions, Political Connections, and Nonprofit Investment Income: Evidence From Chinese Foundations

Investment income offers nonprofits a flexible and sustainable revenue source, yet it remains underexamined in the literature, particularly outside Western contexts. This study addresses that gap by analyzing panel data from Chinese foundations from 2018 to 2022 to examine how financial and political factors are associated with investment participation and investment income. We find that investment engagement among Chinese foundations is limited, and among participants, investment income levels are modest. Drawing on resource dependence and institutional theories, the analysis considers two financial conditions, financial autonomy and financial leverage, and a political factor, political connections. The findings deepen our understanding of nonprofit investment income and highlight how financial conditions and political connections relate to investment engagement and investment income.