Financial Transparency Certification and Interorganizational Network Ties—An Empirical Study

ABSTRACT In this study, we examine the role of interorganizational network ties (being board interlocks and auditor ties in particular) in explaining external financial transparency certification among Belgian nonprofit organizations (NPOs). As a voluntary quality signal, external certification is particularly relevant in the nonprofit context, where donors face information asymmetry. Previous studies have shown that certification positively influences donations, yet the antecedents of certification remain underexplored, especially those related to social network ties. We rely on a sample of 5058 NPO‐year observations and find that NPOs with board interlocks or sharing audit partners with certified NPOs are more likely to be certified themselves. These findings are relevant for regulators, nonprofit managers, and other stakeholders because they shed light on how certification practices spread within the nonprofit sector.