Corporate Philanthropy as a Cooptive Relation

Abstract

Corporate philanthropy is analyzed as a cooptive relation, akin to advertising, directed at persons collectively as a consumer sector of the American economy. The strength of this cooptive relation is predictedfrom a network definition of the extent to which corporations in an economic sector have a market incentive to institutionalize their relations with people as consumers. As predicted, the proportion of corporate net income donated to charity covaries with the extent to which firms in a sector are dependent on consumption by people and able to do something about eliminating uncertainty in the demand for their product. In fact, the specified structural effect of the market on the rate of corporate giving is stronger than the income and tax incentive effects typically specified in a microeconomic model. Methodologically, the discussion illustrates a strategy by which network analysis is often used to inform analyses of individuals: social context constraints on an actor are captured in a network model of the context and then specified as parameters in a microeconomic decision model. In the context of the often strained relation between people and corporations as classes of actors in American society, corporate philanthropy offers a dual satisfaction. Corporate philanthropy, that is to say, tax deductible gifts from corporations to charitable activities, provides the direct material benefit of improved public health, education, and welfare. It is a further satisfaction to know that corporate actors, as preeminently rational, profitseeking bastions of power, have acted in the interests of persons rather than themselves. To be sure, corporate philanthropy is a cost effective allocation of corporate income. But it is also a social setting in which the interests of persons and corporate actors come together in an intimate way. Accordingly, the corporate decision to make charitable donations provides