Introduction

In recent decades, governments have sought to realize public good provision in more efficient, effective, and targeted ways by providing funding to non-governmental organizations (NGOs) [8, 48, 53, 73]. The government is one of the most crucial sources of revenue for most NGOs [2], especially in authoritarian states. In China, where the state controls the vast majority of resources, government funding is not only a guarantee for the survival and growth of Chinese social organizations (official discourse on NGOs in China), but it also implies political and administrative legitimacy [7, 16]. The variables affecting Chinese NGOs’ access to government funding have been extensively studied in the literature [18, 39, 74, 76]. Scholars have argued that multiple internal and external characteristics, such as professionalization, rationalization, government ties, and a history of collaboration, influence the government’s willingness to fund an NGO and the level of funding provided [27, 78].

However, studies have discussed the development of NGOs only within the state–society dichotomy, in which the state is often simply understood as the party-state [19, 52, 54], thus ignoring the unique and profound role of the party. Since Xi Jinping came to power in 2012, the CCP has carried out a vigorous party-building campaign in the social sector, which has involved the party moving increasingly from “an external force intervening in … institutions and processes” [37] to a uniquely important influence on the development of NGOs [51, 54, 55, 59]. Research into Chinese NGOs thus needs to break away from the traditional state–society paradigm and develop a party–state–society framework [51, 54].

Party-building is a series of self-improvement activities in which the CCP engages to strengthen and maintain itself, and they mainly include political, ideological, organizational, style, discipline, and institutional building activities. The CCP has put great effort into strengthening the party, and party members and organizations have become essential conduits between the government and the social sector [44, 64, 69]. Party-building activities by the CCP in the social sphere can be traced back to the “party-building for the two new organizations” implemented in China in the 1990s. In 2015, the Central Office of the CCP released Guidance on Strengthening the Party’s Building Work in Social Organizations (for Trial Implementation) (hereafter, Guidance), which became a landmark document for party-building in social organizations [51]. The strength of party-building in NGOs has reached unprecedented levels. However, the literature on party-building in NGOs has been limited, and its extent does not match the practical importance of the issue [16, 54, 59].

Scholars have proposed ideas such as adaptive tactics of the party, strategic responses of NGOs, and party advancement and state retreat. The relevant studies have mostly adopted a case study approach and have selected cases in the more highly developed eastern region of China, such as Zhejiang and Shanghai [40, 51, 69]. There are several limitations to this literature. First, quantitative research on the impacts of party-building in NGOs has been limited, and even fewer studies have examined party-building schemes to discuss the effects of different forms of party-building. Second, the findings based on case studies are limited in their generalizability. Third, there has been little effort to examine the nuances of the effects of NGO party-building on government funding across regions. Accordingly, we adopted a party–state–society framework in this study to address the following questions: Does party-building increase the level of government funding for NGOs? Do different forms of party-building have different effects? Are there differences in the effects of party-building between regions?

China recognizes three legal types of NGOs, namely foundations, social service organizations, and social groups, with foundations being the dominant and most developed type [29]. Thus, we drew on data from the China Foundation Annual Report from 2019 to 2020, and we found that establishing party branches can significantly increase foundations’ levels of government funding. The cross-regional comparisons indicate that the effect of party-building on government funding is greater in non-eastern regions of China than in the eastern region. However, we found that the number of party-building activities did not affect government funding for foundations with established party branches.

In other words, the state determined the allocation of its government funding only by the founding of party branches, with the party-building activities that reflect the real purpose of party-building in NGOs having no effect on government funding. Thus, although such party-building campaigns have indeed led to significant growth in NGOs’ party branches, our findings may raise questions over whether these endeavors have strengthened the party’s control over the social sector. Although the main findings should be generalized with caution because our sample only covers foundations, this study can serve as a foundation for future research on issues of party-building by NGOs in China.

The remainder of this paper is structured as follows: the next section presents the development of NGOs in China; the third section reviews the relevant literature, presents the analytical framework, and puts forward our research hypotheses; the methodology, including the data sources and variable measurement, is covered in the fourth section; the empirical findings are presented in the fifth section; and the final section provides a discussion and conclusion.

The Development of NGOs in China

In China, after suppression of NGOs during the Mao era, there was a rapid growth of NGOs after the economic reforms of 1978 [69]. Many scholars were positive that this signaled the beginning of civil society and that there would be an associated revolution with the potential to bring about democratic changes to the Chinese political system [67]. Some academics were more cautious, asserting that the Chinese government was still in charge of the growth of NGOs even though its ability to influence the third sector was decreasing [32, 63].

In the 1990s, China increased its control over the social sector through the establishment of government-organized non-governmental organizations (GONGOs) and “dual registration” [12]. Scholars gradually abandoned the civil society argument and turned to corporatism to explain the state regulation of NGOs [41, 49, 63]. However, the theories of state corporatism and socialist corporatism have proven inadequate to capture the intricate interactions between the Chinese state and society [15, 51, 71].

After 2000, scholars stopped rigidly applying Western theories and incorporated a hybrid approach to understand the state–society relationship [14, 75]. The hybrid approach reflects two observations: the existence and growth of NGOs are always controlled by the state [20, 39]; in addition, as the state’s control over society has gradually loosened, the number and variety of NGOs have grown significantly, and they now actively contribute to social governance and public services [19, 51, 55]. For example, while early foundations were established top-down by the state to take over a part of the government’s functions [30, 32], in the last two decades, citizens and businesses have also been allowed to establish foundations to fulfill Chinese citizens’ rising demand for public goods [39]. Scholars have tried to capture the complexity of the relationship between the state and NGOs based on foundation data [66]. Ni and Zhan proposed the concept of “embedded government control” [39], and Ma further identified “differential embeddedness” in the boards of Chinese foundations [31]. Furthermore, the terms “contingent symbiosis” [56] and “two-way empowerment” [17] have been used to describe how the state and NGOs have become more interdependent.

In the Xi era, the central leadership recognized the development of the social sector as an essential consequence of economic progress and its importance to social governance [3]. The state has gradually relaxed the requirements for NGO registration [57] while also positively transferring government functions to NGOs and increasing the level of government contracting [15, 51]. With a series of retreat initiatives of the government, however, the state faces the important challenge of how to maintain control over NGOs and promote their participation in social governance [60].

In China, the CCP has long been seen as the force behind state–society interactions. Since 2012, the party has increasingly moved from the backstage to the front, and a series of party-building campaigns have been launched as innovative ways to strengthen social control [37, 54]. The Guidance guarantees the extensive physical coverage of party-building in NGOs, stating that “in line with the principle of the building as many party organizations as possible, the formation of party organizations will be increased.” In addition to the breadth of physical coverage, party-building is expected to deepen NGOs’ understanding and internalization of the party’s values, thus achieving party permeation and control over the social sector.

The CCP designated the highest governmental governing body for NGOs, the Social Organizations Administration within the Ministry of Civil Affairs (MCA) to oversee NGOs’ party-building work nationwide. The MCA has since introduced several supporting policies to refine and implement the party-building campaign. The MCA added party-building to the evaluation criteria and included party-building resulting in a one-vote veto as an indicator for 5A-rated organizations [70]. In 2016, the MCA released the Notice on Issues Related to Simultaneous Party-building Work when Social Organizations are Established and Registered, which emphasized that party-building work was a prerequisite for registration, at which time social organizations are required to submit a Commitment to Party-building Work in Social Organizations and a Party Member Status Information Form [34]. In addition, the MCA requires social organizations to fill out a detailed Social Organization Party Building Form in their annual report during the annual inspection [80]. In 2018, the MCA further proposed in the Notice on Adding Relevant Contents of Party-building and Socialist Core Values to the Bylaws of Social Organizations that relevant content on party-building and socialist core values was to be added to the organizations’ bylaws [35]. Since 2020, the MCA has been actively conducting party inspections for the party branches of social organizations, identifying specific problems with party-related activities, and formulating various measures to rectify them [36].

Party organizations can be established in various ways, including being independently, jointly, and functionally organized. Party branches must be established by all social organizations with three or more CCP members. Social organizations with few party members can jointly establish party branches in the field of business, office location, and supervising agency [69]. Social organizations that do not meet the conditions for the establishment of party branches can use the selection of party-building instructors and liaisons or the establishment of labor unions and branches of the Communist Youth League, among other ways, to carry out the party-building campaign. The functional party branch is a complement to the official party branch and is only responsible for organizing activities. Party members’ party organizational dossiers remain in their workplaces or residences, but as volunteers in the NGO, they can still participate in the NGO’s party activities. This party-building campaign has achieved great results, with about 303,000 social organizations having established ties with the party by 2018 [69].

The party-building campaign aims to achieve effective coverage through party-building activities, emphasizing that social organizations’ party-building activities can be carried out with organizations’ operations and organizational culture. These party-building activities require social organizations to strictly implement the system of Three Meetings and One Class, which refers to party congresses, branch committees, party group meetings, and party classes, to achieve ideological control over the third sector.

Analytical Framework and Hypothesis Development

The accumulated research drawing on the frameworks of civil society, corporatism, and hybrid models has formed a rich academic foundation. However, the majority of the literature has ignored the prominent role of the party [54].

Not all of the literature has overlooked the party’s role in the social sector. For example, using the case of Shanghai, the model city for party-building in China, Thornton was a pioneer in explicitly identifying “the advancing of the party” and arguing that the distinct role of the party had been largely ignored [59]. Shen et al. built on this work to propose a party–state–society analytical framework and used the case of business associations in Wenzhou, arguing that the state (the administrative body represented by the government) was more concerned with the registration and management of social organizations, whereas the party emphasized political control; the authors described this as the retreat of the administration and the advance of the party [51]. Snape and Wang argued that the party achieved its influence on society through the state using historical policy and discourse analysis [54].

Scholars publishing in Chinese journals have discussed the “embeddedness” and “co-optation” of party-building in social organizations [4, 24, 65]. Many scholars have borrowed Polanyi’s concept of embeddedness to account for the party’s management of NGOs [43], with the party described as spreading its values and philosophy to NGOs through organizational and cognitive embedding, which has not only increased organizations’ motivation to be involved in the management of public affairs but also helped the party to achieve its own ends. However, the concept of embeddedness has been used extensively in studies seeking to understand government strategies for NGOs without defining the unique role of the party [39]. Li described the effect of the party on NGOs using the idea of co-optation and argued that it is an extension of the party–group relationship [24]. However, although Li’s research emphasized the various powerful roles of the party in society, it neglected the interactions with the government.

Accordingly, we refer to Snape and Wang’s analytical approach of placing the party, state, and society in a single framework [54]. We focus on the administrative institutions within the state, thus excluding people’s congresses, courts and procuratorates, and the military from the analysis [51, 54]. In considering how the party exerts influence on NGOs through the state (government), we discover more about the interactions beyond the notion of an advancing party and a retreating state. In the next section, we explore the effects of party-building on NGOs’ access to government funding, which is one of the classic topics of state–society research.

Hypothesis Development

Revenue is pivotal to the growth of NGOs [11, 13]; however, most NGOs in China face a shortage of funds, and eligibility for public fundraising and for receiving funding from overseas is strictly controlled [26]. Government funding through contracting has continued to increase in recent years. The public looked to the state to endorse NGOs to enhance their credibility and to have the state able to provide backup if an organization cannot fulfill its role following the Guo Meimei incident [79].

Party-building, a new form of control, can be used by NGOs to obtain government funding through legitimacy signaling, official evaluations, and political capital. Institutional theory posits that organizations face formal and informal pressures imposed by other organizations and the environment and that they tend to comply with the demands associated with these pressures, especially in cases in which they have a high resource dependency on others, thus showing a tendency to be isomorphic [5]. For NGOs in China, the institutional pressure of party-building is specific and strict, as reflected in the registration, annual inspection, and evaluation aspects of NGO management [80]. NGOs should establish a party organization, but if they do not, they will not be rated at a higher level than 4A [36]. If NGOs do not actively carry out party-related activities, they are likely to face rectification [7, 36]. In the early days of economic reform, many private companies established party branches to escape ideological debates [61]. For NGOs, establishing a party branch is a manifestation of political legitimacy and serves as a signal that can reduce the government’s risk judgment of the organization and thus provide an advantage in the distribution of government funding [24, 78]. As NGOs in China operate in the context of a strong state, they tend to rely on the state’s resource supply for their survival [22, 42]. Party-building helps NGOs solve the dilemma of insufficient resources through “multi-channel funding and diversified inputs” [10]. Compared to government contracting, tax incentives, and incubation, party-building is more flexible and can break through the government’s administrative structure restrictions to maximize the integration of resources [24, 42, 59].

Party-building might also influence the level of government funding for NGOs through official evaluations. The evaluation of NGOs in China can be traced to 2010, when the MCA promulgated the Administration Methods for Social Organization Evaluation [33]. According to a series of evaluation indicators, from highest to lowest, NGOs are categorized into five levels: 5A, 4A, 3A, 2A, and 1A. NGOs at higher levels will have a greater probability of obtaining government contracts and other funding resources [28, 69]. The original NGO evaluation indicators included basic conditions, internal governance, work performance, and social evaluation and were focused on improving the management and professional capacity of organizations. In recent years, party-building has been gradually incorporated into the range of indicators for evaluation. It includes the coverage of party organizations and work, the weighting of which has been increasing.

Besides the abovementioned legitimacy signals and official evaluation mechanisms, party-building can give NGO leaders honorary political status, such that the NGO leaders are also the heads of party organizations [23]. In this way, NGO leaders are absorbed into the system by relying on the party, which is fundamentally different from mere government ties. Government ties are subject to a fragmented administrative system, and they tend to be unstable if they are established by personal connections. Using a case comparison of two grassroots environmental NGOs, Li found that increasing the political capital of its leaders enabled the previously disadvantaged Green Water organization, which had loose ties to the local Environmental Protection Bureau, to rise to a position of influence in the province and even nationally, with a significant increase in its ability to access government resources [24].

Furthermore, the party-building campaign aims for NGOs to have party organizations and to engage in party-building activities [40], which represents a shift from “physical coverage” to “effective coverage” [10]. Therefore, we divided party-building into two specific forms: the establishment of party branches and the number of party-building activities. The establishment of party branches is the basic condition for party-building in an NGO, as integration into the party system gives leverage for a larger scale of government support. Party-building activities are a key means for the party to merge the identity of NGOs with its own. Through routine party-building activities, NGOs bring the party’s values into their organizational operations, and this can help them to make use of any government resources to which they might have access.

However, from interviews with 64 NGO representatives in China, Nie and Wu argued that although the institutional pressures created by the party-building campaign can indeed cause NGOs to become isomorphic, resource constraints, different degrees of government intervention, and different organizational cultures meant that NGOs had responded strategically by acquiescence, compromise, and avoidance [40]. Their research points to the idea that NGOs retain the power to negotiate with the ruling regime [40, 47]. Xin and Huang conducted a case study in Shanghai and found that the effects of the current party-building campaign were more quantitative than qualitative and that the party had struggled to play a substantial role even in NGOs that had established party branches [69].

Despite Xin and Huang’s warning not to be too confident about the effects of party permeation [69], we argue that party-building has a strong capturing and controlling effect on NGOs through mechanisms such as legitimacy signals, official evaluations, and political capital. Accordingly, we propose Hypothesis 1:

  • H1a: NGOs that establish party branches receive more government funding than those that do not.

  • H1b: The more party-building activities NGOs conduct, the more government funding they receive.

The Various Effects of Party-Building on Government Funding Across Regions

An assessment of the effects of party-building on government funding for NGOs should consider variability in the regional locations of the organizations. In terms of both geography and economic development, China is divided into three main regions: the east, center, and west. The eastern area’s level of economic development is generally higher than that of the other two regions, and the institutional environment also differs between regions [25, 50, 68, 74]. Zhang’s comparison of the business association models in two Chinese cities, Wuxi and Wenzhou, found that the local economic base and the government’s willingness to develop trade associations were the main factors that shaped the two different models [77]. Teets divided the regulatory models for NGOs across regions and argued that the eastern region tended to adopt the innovation model, whereas the western region preferred the corporatist model [58]. Shen et al. discovered that compared to the western area, non-western regions’ nonprofit income was more affected by central government financing [50].

Although the literature on party-building in NGOs is mostly based on cases in the eastern region, such as in Zhejiang and Shanghai [40, 51, 59, 69], we hypothesize that in non-eastern regions, party-building has a greater effect on government funding for NGOs. The explanatory mechanism for this can be understood from the third sector bases of the different regions, which directly influence the local governments’ experiences of and attitudes toward NGOs. Compared to the eastern region, the development of NGOs in the non-eastern regions is less developed, and local governments in these regions are more conservative in managing NGOs and will be more aggressive in implementing party-building [40, 58]. On this basis, we propose Hypothesis 2:

  • H2a: NGOs in the eastern region receive lower increases of government funding for establishing party branches than NGOs in non-eastern regions.

  • H2b: The number of party-building activities in NGOs in the eastern region has a weaker effect on the level of government funding than that of NGOs in non-eastern regions.

Data and Methods

We used data from the MCA’s official website, the China Social Organization Government Services Platform (https://chinanpo.mca.gov.cn/index), which provides annual reports of registered charitable organizations (foundations) in its information disclosure section. The platform’s annual reports have been considered to have the most comprehensive information about Chinese foundations, including the basic information, institutional establishment, financial data, and other widely used information [18, 30, 39]. After sorting and checking the data and eliminating records with missing government funding and party-building information or with illogical information (e.g., government funding less than 0), we obtained a sample of 2,436 valid observations. Our sample accounts for 28.9% of the population of registered foundations by 2020 according to official numbers published by the MCA (https://www.mca.gov.cn/article/sj/tjgb/). In addition, consistent with prior studies using this database, our sample is geographically distributed to be located mostly in densely populated areas [18], although the findings of our study should be generalized with caution.

Over two thirds of the foundations in the sample reported zero government funding for 2020, which would cause estimation bias if estimated using the ordinary least squares model (OLS). We therefore used the Tobit model to develop the analysis, as it is more appropriate for such censored data [62]. The Tobit model is also often used in nonprofit expenditure and revenue studies [9, 21]. We used the logarithm of the amount of government funding for 2020 as our dependent variable while taking the values for the independent, moderating, and control variables from 2019. In addition, we added the dummy variables for provinces to address the issue of omitted variables and clustered robust standard errors at the foundation level for heteroskedasticity.

We measured the following independent variables. The presence of a party branch was set to 1 if the foundation established a party branch in 2019 and 0 otherwise. The number of party-building activities was directly measured using the logarithm of the sum of party congresses, branch committees, party group meetings, and party classes reported in the foundations’ annual reports. Although there are differences in the form and content of these types of activities, we believe that they all affect the value of foundations. To compare regions, we divided the foundations into two types based on registration location, with the region set to 1 for foundations in the eastern region and 0 for those in non-eastern regions.

We added foundations’ age, square of age, registration level, size, professionalization of full-time staff, fundraising status, and government ties as control variables. Age as of 2019 is the number of years since the foundation was founded. The registration level was set to 1 for MCA registration or 0 for local registration. Size was set to the logarithm of the organization’s net assets at the beginning of 2019. The percentage of full-time employees at the foundation who had bachelor’s degrees served as a proxy for the professionalization of full-time staff [38]. We expect that the higher the overall level of education of an NGO’s full-time staff, the more likely the NGO is to actively seek to diversify its revenues and reduce its resource dependence on the government [38, 72]. For fundraising status, foundations with public fundraising status were assigned a value of 1, and 0 otherwise. Government ties were set according to information in the foundation’s annual report and took a value of 1 if the foundation’s board of directors in 2019 included retired cadres from the party and government, state-owned enterprises, and institutions, and 0 otherwise [39]. Party-building activities and size were measured by the form of the logarithm to reduce any heteroskedasticity due to skewness [18].

Table 1 presents the descriptive analysis and correlation matrix of the variables. The maximum mean variance inflation factor (VIF) was 1.24, indicating that multicollinearity was not an issue in our study [46].

Table 1 Descriptive Analysis and Correlations
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Empirical Results

Results of the Effect of Party-Building on Government Funding for NGOs

The results of our data analysis on the effects of party-building on government funding for NGOs are shown in Table 2. Models 1 and 2 show that the establishment of party branches and the number of party-building activities significantly increased the level of government funding for foundations (p < 0.01 and p < 0.05, respectively). Models 3 and 4 further incorporate the control variables. From Model 3, it is clear that the establishment of party branches by foundations increased their government funding levels (p < 0.01) when we controlled for the effects of other variables; this result was therefore stable. However, after we added the control variables, the coefficient of the effect of the number of party-building activities on the government funding of foundations was no longer significant. These results support H1a but not H1b.

Table 2 Results of the Effect of Party-building on Government Funding
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The coefficient of the effect of the foundations’ professionalization of full-time staff on government funding was negative (in Models 3 and 4), indicating that a higher percentage of the foundations’ full-time staff holding bachelor’s degrees was associated with less government funding. A possible explanation for this finding is that foundations with higher levels of professionalization of full-time staff are more likely to seek funding from sources that are more independent of the government [38]. Government ties were positively related to the levels of government funding obtained by the foundations, and the coefficient was robust. Additionally, there was a strong positive association between the foundations’ fundraising status and the dependent variable, indicating that foundations with public fundraising status received a higher level of government funding than those with non-public fundraising status.

Moderating effect of region

We further analyzed the regional differences in the impact of party-building on government funding, with the results presented in Table 3. Models 1 and 2 show that the foundations based in the eastern region received higher levels of government funding on average than those in the non-eastern regions. With the interaction term of establishing a party branch with an eastern region location added in Model 3, the results show that the effect of establishing a party branch on increasing the level of government funding was smaller for the foundations in the eastern region than for the non-eastern foundations. However, the results of Model 4 were not significant. These results support H2a but not H2b.

Table 3 Results of the Moderating Effect of Region
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Robustness Test

We conducted a robustness test by replacing the dependent variable with the levels of the foundations’ government funding in 2020 as a proportion of total revenue in that year, with the results shown in Table 4. As shown in Model 1, the relationship between the establishment of party branches and the proportion of government funding in the total revenue of the foundations was significant, and that between the number of party-building activities and the proportion of government funding in the total revenue of the foundations was not, thus reflecting the findings of the main analysis. The establishment of party branches had a smaller positive effect on the proportion of government funding of the total revenue of the foundations in the eastern region than in the non-eastern regions, but unlike in the main analysis, the coefficient was non-significant.

Table 4 Results of the Effect of Party-Building on the Share of Government Funding in Revenue
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There remained a selectivity bias regarding whether the foundations had chosen to establish a party branch. To address this issue, we used Rosenbaum and Rubin’s propensity score matching (PSM) method by matching organizations with similar characteristics (age, registration level, size, professionalization of full-time staff, fundraising status, government ties, registration region, and the dummy variables of each province) as those that did establish a party branch from among those that did not establish a party branch, and assuming that the control group of organizations with the similar characteristics reflected the potential outcome of the treatment group if they had not received the treatment [45]. To eliminate selectivity bias, we compared the two matching groups to obtain the average treatment effect on the treated group (ATT).

The results of estimating the ATT for government funding using three PSM approaches are given in Table 5. The one-to-four nearest neighbor matching approach returned an ATT of 2.17, and both the radius matching and kernel matching approaches returned an ATT of greater than 2. It was found that a foundation with the average characteristics of those establishing a party branch received significantly higher amounts of government funding than it would have received if it had not established a party branch, reflecting the positive effect of establishing a party branch on foundations’ access to government funding and validating the robustness of the results of this study.

Table 5 Results of Propensity Score Matching
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Discussion

The results show that the establishment of party branches in foundations increases their government funding, but the number of party-building activities does not have this effect. Moreover, the positive effect of establishing a party branch on government funding is greater among foundations outside of the eastern region than among those in the eastern region. Consistent with previous studies, we found that foundations’ public fundraising qualifications and government ties can enhance their government funding [1, 6, 39].

We found that the Party’s influence on society through the administrative system reflects a reshuffling of the relationships between the party, state, and society [54] rather than the advancement of the party and retreat of the state [51, 59]. Although some government functions have been shifted to the third sector because of its ability to better provide targeted public goods, the government remains the legal authority that regulates NGOs. The growing development of NGOs has in turn made the CCP, as a Leninist party, unable to resist stepping in and increasing its control over the sector [69]. The party’s strengthening of its control over NGOs through the state administrative structure allows for the dual control and management of government institutions and the social sphere.

The empirical results show that the establishment of party branches can leverage government funding for NGOs. According to the Guidance, the MCA and the Ministry of Finance, for example, are required to effectively coordinate the party-building of social organizations, and they will be held accountable if they fail to fulfill their responsibilities. It is also required that the evaluation of state leadership cadres should take social organizations’ party-building efforts into account. Therefore, matters related to party-building by NGOs are given high priority by these administrative agencies. NGOs’ active establishment of party branches is perceived by the government as a signal of political legitimacy, and such NGOs are given priority in the allocation of resources in administrative matters related to them [24, 78]. Specifically, the direct effect of establishing party branches is that it influences NGOs’ assessment ratings, which are used as an indicator for government contracting and other incentives. For the CCP, control over NGOs is achieved through the administrative structure, thus strengthening the dual control of administrative agencies and NGOs.

In addition, the foundation of a party branch boosts NGO leaders’ political capital and thus increases access to government funding. These NGO leaders also become key players in the party branches. When these leaders receive party membership, their NGOs become insiders in the party-state system, which could greatly expand their political capital and increase their capacity to access and integrate resources, which will attract more NGOs to establish party branches [24, 69]. For the CCP, the establishment of party branches in NGOs not only internalizes control, which previously relied on government supervision, but it also promotes the party’s overall leadership. In addition, following the founding of party branches, the CCP can use the professional advantages of NGOs to provide specialized public goods so that society can enjoy quality services provided by NGOs in the name of the CCP [54].

We also found that the enhancement effect of establishing party branches on government funding for NGOs was more significant in the non-eastern regions, as NGOs in the central and western regions are less developed overall than those in the eastern region, which have more diversified revenues. NGOs in the non-eastern regions are more dependent on the legitimacy assigned by the party, higher social organization assessment ratings, and leaders’ political capital to obtain government funding, and local governments depend on NGOs’ participation in party-building campaigns to accomplish political tasks [40].

An intriguing conclusion of this study is that in contrast to the impact of establishing a party branch, the number of party-building activities had no effect on the amount of government funding received by NGOs. Party-building activities are an important means of spreading the values and culture of the CCP and should therefore be more meaningful for the party than simply establishing a party branch; it therefore seems more appropriate to allocate government resources by virtue of the performance of NGOs on this indicator. Some possible reasons for this not being reflected in our findings are that (a) for convenience, local governments usually choose loose joint party branches rather than independent branches, and (b) the government is short-sighted in judging the party-building activities of NGOs and relies only on the number of party branches rather than the quality of party-building activities. The purpose of party-building initiated by the central level is thus diluted [40, 69], and as a result, the actual implementation of party-building is not ideal, as observed in our findings.

With a lack of cohesive party structure and flawed implementation, NGOs will tend to use party-building as a tool for their own development without identifying and internalizing the values and culture of the CCP [40]. When establishing a party branch becomes a necessity for survival, organizations have no choice but to comply. If, however, NGOs find that if they can access government resources without implementing high-quality party-building activities, the party-building effect is superficial, and is successful only in terms of quantity rather than quality. It is worth noting that in the new era of party-building, the political legitimacy that comes with the establishment of a party branch may help organizations to evade other aspects of state regulation. Thus, as some scholars foresee, party organizations may become akin to the “labor unions” of the Maoist era and less likely to constitute an effective part of NGOs [69].

Conclusion

Drawing on the annual reports of Chinese foundation organizations from 2019 to 2020, we analyze the impact of party-building on NGOs’ access to government funding, with attention to the differences between regions. The study found that establishing a party branch significantly increased the level of government funding received by NGOs. However, among the NGOs that had established party branches, the number of party-building activities was not correlated with the level of government funding. Moreover, the effect of establishing a party branch on government funding for NGOs was greater in non-eastern regions than in the eastern region.

We contribute to the literature in three meaningful respects. First, we add a discussion of political parties to the literature on NGOs’ access to government funding, which brings the field more in line with the real-world context in China. Second, we use a quantitative research approach to analyze the influence of party-building on NGOs. Third, our analysis of the responses of NGOs to different forms of party-building points to the paradoxes that are present at this stage of the party-building campaign and introduces the real picture of party-building in China’s social sector.

Nonetheless, there are some limitations to the study. First, the data in this study were from foundations, and thus the findings should be generalized with caution. Second, the forms of the party branches were not distinguished; future studies could consider the specific effects of different types of party branches. Third, we were unable to identify causal effects on the variables. Future analyses of the effects of party-building on NGOs would benefit from richer panel data or more sophisticated research methods.