What Drives Nonprofit Prevalence and Growth in Local China: Is it Demand Driven or Resource Oriented?

Nonprofit organisations have grown tremendously in China over the past two decades, but their density and growth vary substantially across regions. Why are nonprofits distributed differently across China? This article develops a theoretical model to explain the prevalence and growth of nonprofits from three perspectives: heterogeneous service demands (e.g. population size, proportion of ageing and floating people); human resources and social capital (e.g. economic affluence and donation culture); and government support (e.g. government procurement). The authors' analysis of 153 prefecture-level cities reveals that nonprofit density is well explained by the model, and nonprofit growth is related only to population size and government support. The findings deepen our understanding of nonprofit density and growth in China, and generate helpful policy implications.