Networks and Organizational Growth: A Study of Community Based Nonprofits

Abstract

The paper examined the effects of nonprofit organizations' network ties over time on growth. Donative non-profits, which relied heavily on contributions and volunteers, grew at a faster rate if they had high status, more ties to urban elites, and greater interorganizational network centrality. In contrast, commercial nonprofits, which depended on fees and/or sales and employees, grew at faster rates if they had fewer ties to other nonprofits and local elites. Also, as nonprofits became more dependent on fees and/or sales, they moved to the periphery of the interorganizational resource exchange network. The findings contribute to the social capital literature by suggesting that networks are more beneficial to organizations that depend on donations and gifts than on earned income.