This paper analyzes the determinants of corporate reputation within a sample of large UK companies drawn from a diverse range of industries. We pay particular attention to the role that philanthropic expenditures and policies may play in shaping the perceptions of companies among their stakeholders. Our findings highlight that companies which make higher levels of philanthropic expenditures have better reputations and that this effect varies significantly across industries. Given that reputational indices tend to reflect the financial performance of organizations above (...) other factors (Fryxell, G. E. and J. Wang: 1994, Journal of Management 20, 1–14) and that elements of the literature emphasise that discretionary aspects of social responsibility, including corporate donations, may not be in the financial interests of organizations (e.g. Friedman, M.: 1970, “The Social Responsibility of Business is to Increase its Profits”, New York Times Magazine, September 13), this is a significant finding. It suggests that philanthropic expenditures may play a significant role in stakeholder management and may, in particular, lead to stakeholders holding more positive impressions of philanthropic corporations. (shrink)

Prior studies have advanced our knowledge of the individual determinants of corporate philanthropy; however, little empirical research has been conducted on how these determinants combine to influence giving. In this study, the authors develop and test an integrated model of the relationship between firm resources and corporate philanthropy as mediated by managerial discretion and managerial values. In addition, the authors offer organizational slack as an alternative measure of organizational resources. As predicted, the results show that firm resources have a positive (...) effect on corporate philanthropy. This effect is fully mediated by managerial discretion and partially mediated by managerial values. (shrink)

This paper briefly reviews the theories that seek to explain the phenomenon of corporate charitable donations and then provides a review of the empirical issues that have arisen in previous studies in this area. The findings of an analysis of charitable donations data from the entire U.K. FTSE index for the years 1985–2000 are then reported. These findings include the observation of a time-related increase in charitable donations, which is compared with an earlier study to give a 24 year history (...) of charitable donations in the U.K. The findings note little responsiveness of the monetary value of charitable donations to the economic performance of firms. An international comparison over time against U.S. trends is also reported and shows how U.S. corporations have traditionally been more generous than U.K. firms, but that the trend in the U.S. is downwards. Membership of a U.K.-based "tithing" club (the PerCent Club) is shown to be associated with higher profit performance against non-members. Members' charitable contributions against profit are shown to be higher than the FTSE mean although short of the 0.5% target figure in "cash" terms. The paper concludes with a brief discussion of these findings in relation to the theoretical positions advanced for corporate philanthropy. (shrink)

This paper investigates why some companies give to charity and others do not. The study uncovers a strong relationship between the personal attitudes of the charitable decision maker and the firm's giving behavior. This relationship indicates that the human element of personal attitudes may interact and play a very important role in a firm's decision to become involved with philanthropic activities. The study also shows that firms who have a history of giving to charity cite altruistic motives for their behavior. (...) On the other hand, firms that do not give to charity tend to use business reasons to explain their non-involvement. (shrink)

The authors argue that corporate philanthropy is far too important as a social instrument for good to depend on ethical egoism for its support. They claim that rule utilitarianism provides a more compelling, though not exclusive, moral foundation. The authors cite empirical and legal evidence as additional support for their claim.

Various corporate social activities were regressed on self-report measures of stakeholder-orientations from 220 CEOs from large Fortune 500 industrial and service firms. Overall, the relationship between who CEOs say is important and corporate activities toward those stakeholders is much weaker than anticipated. Of the expected relationships, only corporate philanthropy was positively related to CEO community orientation. The few other significant findings were less straightforward. Return on equity (ROE) of the company was related to the CEO's customer orientation rather than the (...) CEO's stockholder orientation, and liberal HRM programs were positively associated with a CEO's stockholder orientation rather than employee orientation. (shrink)

Owners of businesses represent an interesting case in the study of the intersection of personal and corporate philanthropic values. Because individuals who own businesses have the means and the ability to act on philanthropic motivations through the medium of their businesses, it is interesting to explore the extent to which their corporate contributions to nonprofits are philanthropic in nature or instrumentally motivated, as in the instance of cause related marketing. The trade-offs between cause related marketing and corporate support of nonprofits (...) are complex. Although larger firms are increasing their investments in cause related marketing, the extent of and motivations for adoption of cause related marketing among privately held businesses is less well understood. This study of 478 businesses which are supporters of arts organizations shows that privately held businesses of medium size (300 to 500 employees) are participating in cause related marketing to a significant degree. The adoption rate of cause related marketing is about 40%, and the primary benefits sought are company image enhancement and product marketing support. Adoption of cause related marketing among privately held and smaller enterprises will grow as CEOs exhibit satisfaction with the results of their program, intend to engage in positive word of mouth about it, and plan to allocate more resources to it. (shrink)

Corporate philanthropy describes the action when a corporation voluntarily donates a portion of its resources to a societal cause. Although the thought of philanthropy invokes feelings of altruism, there are many objectives for corporate giving beyond altruism. Meeting strategic corporate objectives can be an important if not primary goal of philanthropy. The purpose of this paper is to share insights from a strategic corporate philanthropic initiative aimed at increasing the pool of frontline customer contact employees who are performance-ready, while supporting (...) curriculum development and infrastructure improvement for selected university business programs, creating a win-win situation for the company and the universities. This paper will address three objectives. First, we will examine the evolution of strategic philanthropy from the traditional view to its current position as a strategic option. Second, we will address the recruitment of front line talent needs (customer facing jobs in sales, customer service, and marketing) based on the profit maximization model of strategic philanthropy. Finally, we will offer conclusions and issues for future research. (shrink)

This paper addresses the question of the existence of corporate philanthropy. It proposes a framework for analysing corporate philanthropy along the dimensions of business/society interest and primary/secondary stakeholder focus. The framework is then applied in order to understand business involvement with the arts in the U.K. A unique dataset of 60 texts which describe different firms' involvement with the Arts is analysed using formal content analysis to uncover the motivations for business involvement. Cluster analysis is then used in order to (...) identify motivational groupings. Two broad types of involvement are identified – advertisers and legitimators. Only in one case of the 60 is there the potential to observe pure altruism. The contribution of this paper is twofold. First, it provides a clear framework to understand the motivations for corporate giving and applies this using empirical data. Secondly, this research finds little evidence, if at all, of corporate philanthropy in the context of firms giving to the Arts in the U.K. (shrink)

In a departure from the traditional studies of corporate philanthropy that focus on board composition, advertising, and social networks, the authors investigate the financial correlates of corporate philanthropy. The research design controls for firm size and industry while observing firms from a variety of industries. The sample contains matched pairs of generous and less generous corporate givers. The authors find, as hypothesized, a positive relationship between a firm''s cash resources available and cash donations, but no significant relationship between corporate philanthropy (...) and firm financial performance, regardless of whether corporate philanthropy is measured as cash payouts or the aggregate contributions that charities actually receive, and regardless of whether financial performance is gauged using accounting measures or market measures. Whereas the link between available resources and corporate philanthropy is well accepted in the literature on corporate social responsibility, it has been rarely tested and never so definitively found as in this research. (shrink)

This study examined the influence of corporate giving programs on the link between certain categories of corporate crime and corporate reputation. Specifically, firms that violate EPA and OSHA regulations should, to some extent, experience a decline in their reputations, while firms that contribute to charitable causes should see their reputations enhanced. The results of this study support both of these contentions. Further, the results suggest that corporate giving significantly moderates the link between the number of EPA and OSHA violations committed (...) by a firm and its reputation. Thus, while a firm's reputation can be diminished through its violation of various government regulations, the extent of the decline in reputation may be significantly reduced through charitable giving. (shrink)

This paper discusses how Salvadoran companies practice corporate philanthropy in El Salvador, and what might motivate it. First, I briefly discuss three principal theories of corporate philanthropy, and explore some current trends in international corporate philanthropy to highlight some of the motives Salvadoran companies may have to participate in charitable activities. Then, I discuss the history of the Salvadoran private sector to help us understand philanthropic activity today. Next, I suggest that philanthropic acts by Salvadoran firms are driven by altruistic (...) and politically strategic motives, and reflect individualistic and paternalistic attitudes. In the discussion, I include examples of Salvadoran corporate philanthropy as it is practiced today, based on recent field research in El Salvador. (shrink)

The market economy has triumphed virtually everywhere-and has come to be reviled virtually everywhere. Critics, including more than a few economists, charge that capitalism creates gross inequality, inflicts environmental destruction, and undermines democracy. Nothing could be further from the truth. The market economy is the most just and humane economic system yet conceived.