Interlocking Boards in Nonprofit Organizations

What is it about?

We are one of the first studies that we know of to examine board interlocks in the nonprofit sector. Specifically, we examine differences in nonprofit governance, efficiency and accrued donations for interlocked and non-interlocked boards. Using an index of sixteen nonprofit governance policies, we find that interlocking boards are more likely to have better governance, indicating that best practices are indeed spread through interlock networks. Organizations with interlocks are also found to be more efficient than those without interlocks. Finally, the composition of a nonprofit board may be particularly relevant in assisting with fundraising efforts. As a board interlock establishes a social network through which more potential resources for funding may be reached, this expanded network may help to increase the amount of donations obtained by a nonprofit entity. We find support for this conjecture in that donations are positively associated with the existence of a board interlock.

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