DOI: 10.25442/hku.29133926
title: Supporting Data for "Managing NPO-Funder Relations for Financial Sustainability: Insights from Social Service Nonprofits in China"

description: As a sub-sector of nonprofit organizations (NPOs), social service nonprofits (SSNs) are essential agents in delivering human services and contributing to social welfare. However, they are struggling with acquiring and maintaining sustainable financial resources as a result of continuous welfare retrenchment. To date, little research has examined SSN-funder relations, relational management strategies, and their impact on organizational financial sustainability in non-democratic regimes characterized by contentious state-NPO relations and stringent regulations. This thesis is guided by an overarching research question: “How do social service nonprofit organizations manage their relations with multiple funders to achieve financial sustainability in a non-democratic context?” This thesis comprises three interconnected studies. First, a scoping review (Chapter 2) of 32 selected articles unearths the theoretical and empirical landscape of research on SSN–funder relations. This review synthesizes existing evidence and generates a new typology of SSN–funder relations: contract-based, partnership-based, transactional, and transformational. It also identifies both externally- and internally- oriented relational management strategies. Finally, this review theorizes the impact of SSN-Funder relations across four dimensions: service continuity, environmental adaptability, social impact expansion, and sustainable financial performance. Second, informed by Resource Dependence Theory and Embeddedness Theory, a quantitative study (Chapter 3) uses a cross-sectional secondary dataset of 681 SSNs in China to examine the impact of SSN-funder relations on organizational financial sustainability. Results found that greater reliance on a dominant funder was significantly associated with lower revenue generation (β = -0.5, p &lt; 0.05), reduced surplus retention (β =-0.7, p &lt; 0.001), and decreased operational efficiency (β = -0.0, p &lt; 0.001). Revenue diversification was negatively related to surplus retention (β = -0.6, p &lt; 0.01). Moreover, Party (β = 0.5, p &lt; 0.001) and corporate embeddedness (β = 0.2, p &lt; 0.001) were positively associated with revenue generation, while government embeddedness was negatively associated with revenue generation (β = -0.4, p &lt; 0.001).Third, informed by Relationship Management Theory, a qualitative study (Chapter 4) comprising 30 in-depth interviews with SSN practitioners explores how various relational management strategies with funders impact organizational financial sustainability in China. It identifies a “relational strategy portfolio” with four strategies: trust-building, alignment, commitment reinforcement, and power-balancing. This study further conceptualized an inverted U-shaped relationship between the relational strategy complexity and organizational financial sustainability: as organizations choose to move from single to dual and then bundled strategies, their financial outcomes tend to improve. However, overly complex relational strategies may strain organizational capacity, leading to diminishing returns or even operational inefficiencies.This thesis makes three important contributions: Theoretically, it extends Resource Dependence Theory, Embeddedness Theory, and Relationship Management Theory by demonstrating how each offers complementary insights into SSN-funder relations and nonprofit financial sustainability in a non-democratic context. Empirically, this thesis identifies the typologies of SSN–funder relations and demonstrates how different relational management strategies shape organizational financial outcomes. Practically, this study provides actionable guidance for nonprofit practitioners, emphasizing the importance of a relational mindset and management strategies used to foster nonprofit financial sustainability in the social service sector and beyond.