Can donations be too little or too much?

Abstract

Purpose Charities depend on giving behaviors of organizations to fulfil their purpose, whereas corporations seek to improve their image in return. Accordingly, the purpose of this research is to investigate optimal donation thresholds for organizations to enhance their corporate social responsibility (CSR) image. Design/methodology/approach Experiment 1 (N = 482) tests whether CSR image improves with donation amount up to the point at which it becomes excessive (H1) and whether this point differs between firms in a positive versus negative economic situation (H2). Experiment 2 (N = 432) examines the role of consumer attribution of firm motives through mediation of these effects (H3), while also exploring consumer donation expectations by testing an “undefined” amount. Experiment 3 (N = 400) validates the role of attributions through the moderating effect of motives. Findings The experiments demonstrate an optimal interval between inferior and superior donation amounts that maximize the impact of corporate giving on CSR image through the attribution of society-serving motives. Furthermore, the economic situation of the company alters these thresholds – higher donations are required to positively influence the CSR image when the company is in a favorable situation. Research limitations/implications This research answers a long-term call to provide more reliable tools on which to base charitable giving decisions. It also identifies perceived donating motives as the psychological process underlying consumers’ response to donation magnitudes. Practical implications The authors determine psychological donation thresholds by examining amounts perceived as insignificant in comparison to excessive and provide managers with an easy-to-implement method to determine optimal donation amounts from their target market. Originality/value By examining charitable giving at the micro-level, this research provides practical advice to companies on how to determine, ahead of time, how much to donate and what exactly to communicate in which economic situation.