The Role of Collective Board Members’ Social Capital on the Financial Performance of Non-Profit Organization

Non-profit organizations exist to provide public goods and are an integral part of the community around them. Though Non-profit organizations do not make profits, they are expected to remain financially sound and have a lasting impact on the community they serve. Board members volunteer to assist in the provision of essential services. Using social capital theory, this study examines the role of collective board members’ social capital on the financial performance of non-profit organizations. Using secondary data from GuideStar, this study will operationalize financial performance using Prentice’s Financial Performance Index as liquidity, solvency, and profitability ratios. The study will use primary data to measure social capital by sending surveys of Putnam's social capital index, such as networks, trust, and reciprocity, to board chairpersons. Correlation analysis will be conducted on the variables. Conclusion and Further Research The importance of collective board members’ social capital cannot be ignored. Understanding whether it has an impact on the financial performance is of fundamental importance since Non-profit organizations have limited resources and struggle to remain financially stable. Future research should explore the timing of measuring collective board members’ social capital and matching it with the accurate and most relevant financial performance data