Philanthropic Decisions Research Articles

Impact of corporate philanthropy on firm performance: The moderating role of board structure

Corporate philanthropy plays an important role in enhancing firm reputation and financial performance. Further, board structure has the responsibility to make philanthropic decisions. This study investigates the moderating role of board structure on the relationship between corporate philanthropy and financial performance. We apply fixed effect model for analysing the results, while generalized method of moments (GMM) is employed to check the robustness of the results. We find that corporate philanthropy has a significant positive impact on financial performance. Further, results provide support for the moderating role of board attributes. The findings suggest that the policymakers should take appropriate decisions regarding corporate philanthropy while considering other factors such as board attributes.

Predicting user loyalty and repeat intention to donate towards fantasy sports gaming platforms: A large‐sample study based on a model integrating philanthropic actions, well‐being and flow experience

AbstractIndia has become one of the world's largest gaming destinations, and in the last few years, the rapid rise of online gaming has led to the domination of fantasy sports gaming platforms. Very little is understood about how users on fantasy sports gaming platforms perceive and approach giving and what essentially matters to users before selecting or engaging with such fantasy sports gaming platforms. This study aims to predict user loyalty and repeat intention to donate towards fantasy sports gaming platforms by examining philanthropic actions, well‐being (WB) and flow experience (FE). A large‐scale research study on 2091 samples was undertaken by adopting three‐fold SEM‐ANN‐NCA (structural equation modeling‐artificial neural network‐necessary condition analysis) for establishing and empirically testing a comprehensive model by integrating philanthropic actions, WB and FE to predict user loyalty and repeat intention to donate towards online fantasy sports gaming platforms. The findings add depth to our understanding of philanthropic actions linked to fantasy sports gaming platforms and users' loyalty and donation intentions towards such platforms. The results of ANN indicated the normalized importance of the predictors of user loyalty and found that philanthropic action was the strongest predictor. Likewise, philanthropic actions, WB, and FE were necessary conditions (must‐have) to determine user loyalty during NCA. The findings would provide invaluable intelligence to fantasy gaming companies to oversee critical philanthropic decisions proficiently. In addition, the results would provide valuable insights to decision‐makers in philanthropic foundations and other entities, such as practitioners and online fantasy gaming companies, to devise effective marketing strategies to gauge user loyalty and shape donation intentions.

Looking good by doing good: CEO attractiveness and corporate philanthropy

We investigate the effect of male corporate managers' physical appearance—classified into unattractive, average-looking, and attractive—on the philanthropic decisions of Chinese listed firms. We find that compared to average-looking managers, those who rated as attractive do not engage more actively in corporate donations. On the contrary, the probability of donating is approximately 5% higher for unattractive managers than for average-looking managers; further, unattractive managers donate 95% more in charitable giving. To explain these findings, we propose a psychological channel through which physical appearance may influence male managers' charitable donations: Because altruistic behaviors may aggrandize individuals, managers conscious of deficits in their own physical attractiveness may engage in prosocial behavior to increase their attractiveness in the eyes of others. We find consistent evidence that the effect of managers' unattractiveness on philanthropic decisions is stronger in firms with weaker corporate governance; further, we find that the positive impact of corporate donation on financial performance observed in firms led by attractive and average-looking managers is substantially weaker in those firms led by unattractive managers.

Adversity Tries Friends: A Multilevel Analysis of Corporate Philanthropic Response to the Local Spread of COVID-19 in China.

We examine corporate philanthropic decisions in response to the local spread of COVID-19. From a strategic perspective, firms may proactively undertake philanthropic efforts to limit the spread of the pandemic and avoid a degraded business environment. From the perspective of non-trivial costs, increased economic uncertainty can raise concerns about business survival and lead to conservative philanthropic strategies. Following the proverb “prosperity makes friends, adversity tries them,” at the provincial level, our results support the second perspective. Specifically, when the spread of the pandemic worsens in a province, local firms are less likely to make COVID-19-related donations in terms of likelihood and amount. Investors also react negatively, not only to the local spread of COVID-19 but also to COVID-19-related philanthropic donations. At the organizational level, our evidence indicates that there is at least some level of cost–benefit analysis underlying corporate philanthropic decisions. Specifically, corporate philanthropic donations, especially those made to the local business environment, are significantly affected by organizational-level factors, such as pre-existing resource availability and motives to acquire political and reputational resources. Overall, our multilevel study presents a comprehensive picture of corporate philanthropic decisions amid the COVID-19 crisis.

Looking Good by Doing Good: CEO Attractiveness and Corporate Philanthropy

We study whether firm managers’ physical appearance affects their decisions on corporate philanthropy. Examining a large sample of corporate donations matched with managers’ attractiveness data, we find that male managers’ motivations for philanthropic giving are driven by their physical attractiveness. In contrast to managers with average looks, attractive managers do not engage more actively in corporate philanthropy; however, unattractive managers are more inclined to participate in charitable giving and contribute a greater amount. Further, the impact of managers’ unattractiveness on their philanthropic decisions is stronger in firms with lower market capitalization, lower managerial compensation, and weaker corporate governance. Inspired by the research in psychology, we propose two psychological channels through which physical attractiveness may influence a manager’s philanthropic decisions. First, corporate executives with undesirable looks may perceive themselves as belonging to a relatively lower social class, which is associated with a greater motivation for conducting philanthropy. Second, because altruistic behaviors may characteristically aggrandize individuals and concretely enhance their performance evaluations, unattractive managers are motivated to contribute to charity to assail the sense of inferiority due to their undesirable appearance. Together, out findings demonstrate a significant link between individuals’ attractiveness features and philanthropic motivations as well as agency problems behind managers’ ostensibly prosocial behaviors that satisfy their self-interest and personal needs.

Organized labor and corporate philanthropy: Evidence from Korea

AbstractThis study examines the impact of organized labor on corporate philanthropy, focusing on Korean firms. We find a positive association between the labor unionization ratio and the corporate philanthropy of firms, especially for non‐Chaebol‐affiliated firms and firms that have positive operating cash flow. The results from the robustness tests, which employ alternative union strength proxies and two‐stage least squares regression analyses, support our major findings. The findings indicate that unionized firms can utilize corporate philanthropy to boost their bargaining power regarding wages and collective bargaining power with unions by reporting lower earnings. This study contributes to the corporate philanthropy and labor union literature by providing evidence that the labor union is a crucial stakeholder that may affect firms' philanthropic behavior. Our findings explain corporate philanthropic decisions in the Korean context.

The theory of planned behaviour and transformational leadership: an examination of corporate philanthropy among SMEs in Malaysia

A wide body of knowledge concerning CSR has been acquired by integrating this strategy as the corporate strategy in large-scale organisations. However, CSR in SMEs has received relatively little attention despite their important role and contribution in building a nation. The data for Malaysia highlight that small and medium enterprises (SMEs) are the main driver of Malaysia's economic growth. Therefore, this study examines the determinants of the corporate philanthropic decisions of SMEs by mapping it to Ajzen's theory of planned behaviour (TPB) and Bass's transformational leadership theory. Moral obligation and government incentives are also included to provide better understanding of the research. The study was carried out using 82 questionnaires answered by the top management of SMEs. Overall, this study offers new understanding concerning the determinant factors for the engagement of SMEs in corporate philanthropy. This paper also discussed the suggestions for future study as well as the limitations.

The theory of planned behaviour and transformational leadership: an examination of corporate philanthropy among SMEs in Malaysia

A wide body of knowledge concerning CSR has been acquired by integrating this strategy as the corporate strategy in large-scale organisations. However, CSR in SMEs has received relatively little attention despite their important role and contribution in building a nation. The data for Malaysia highlight that small and medium enterprises (SMEs) are the main driver of Malaysia's economic growth. Therefore, this study examines the determinants of the corporate philanthropic decisions of SMEs by mapping it to Ajzen's theory of planned behaviour (TPB) and Bass's transformational leadership theory. Moral obligation and government incentives are also included to provide better understanding of the research. The study was carried out using 82 questionnaires answered by the top management of SMEs. Overall, this study offers new understanding concerning the determinant factors for the engagement of SMEs in corporate philanthropy. This paper also discussed the suggestions for future study as well as the limitations.

After the harvest: A stewardship perspective on entrepreneurship and philanthropy

Entrepreneurs comprise the majority of the richest people in the world. Their venture exits, or more specifically harvests, often represent the events through which they accrue this great wealth. Following these harvests, entrepreneurs make critical decisions with their financial resources that can have a profound impact on society. Through content analysis of The Giving Pledge letters and in-depth interviews with entrepreneurs, we explore how and why entrepreneurs redistribute their resources following harvests, and we reveal four mechanisms — intrinsic motivation, identification, personal power, and stewardship norms — that drive these philanthropic decisions. We extend stewardship theory and highlight a new avenue through which entrepreneurs can act as stewards of others and address societal concerns.

Business Groups and Tunneling: Evidence from Corporate Charitable Contributions by Korean Companies

This paper investigates whether corporate philanthropic decisions are associated with a firm’s listing status and business group affiliation. Analyzing a large sample of public and private firms in Korea, we find that (1) public firms make more charitable contributions than private firms and (2) business group-affiliated firms make more charitable contributions than non-affiliated firms. The results suggest that public firms, owing to greater public scrutiny, and business groups, owing to higher political costs, are encouraged to make more corporate charitable contributions. Further, we find that (3) greater corporate giving by public firms than private firms is more pronounced for business group-affiliated firms, compared with non-affiliated firms. The result is consistent with business groups’ strategic coordination of their affiliates’ philanthropic decisions to tunnel business group resources out to controlling shareholders who hold a larger portion of private affiliates than public affiliates.

Business Groups and Tunneling: Evidence from Corporate Charitable Contributions by Korean Companies

This paper investigates whether corporate philanthropic decisions are associated with a firm’s listing status and business group affiliation. Analyzing a large sample of public and private firms in Korea, we find that (1) public firms make more charitable contributions than private firms and (2) business group-affiliated firms make more charitable contributions than non-affiliated firms. The results suggest that public firms, owing to greater public scrutiny, and business groups, owing to higher political costs, are encouraged to make more corporate charitable contributions. Further, we find that (3) the greater corporate giving by public firms than private firms is more pronounced for business group-affiliated firms, compared with non-affiliated firms. The result is consistent with business groups’ strategic coordination of their affiliates’ philanthropic decisions to maximize the value of the business group as a whole or to tunnel business group resources out to controlling shareholders who hold a larger portion of private affiliates than public affiliates.

Altruism in business – an empirical study of philanthropy in the small business context

PurposeThe purpose of this study is to examine corporate philanthropy from the perspective of small business owner‐managers to find out whether there is room for altruism in business life.Design/methodology/approachThis study is based on 25 thematic interviews with small business owner‐managers. The data analysis is based on a method of qualitative content analysis.FindingsBased on the analysis, it is shown that reactivity, an emphasis on personal interests, the willingness to utilize philanthropy as part of marketing and lack of planning are typical of philanthropy in the small business context. Small businesses often emphasize strategic business reasons as the main motive for their philanthropic engagements. Nevertheless, in some cases the philanthropic decisions are based on mere willingness to contribute to the welfare of others. Thus, the paper suggests that there is room for altruism in the small business context. The existence of altruism in the context of small business philanthropy is closely related to owner‐managers' values and business ambitions. Indeed, the organizational context does not usually hinder the existence of altruism to any great extent among small businesses, as it might do in the large business context. Similarly, based on the results of this study, the authors suggest that close relationships between a small business and its stakeholders increase the probability of altruism in business.Research limitations/implicationsIt is acknowledged that corporate philanthropy is but one possible context in which to study altruism.Originality/valueThe study provides useful information on whether there is room for altruism in business life from the perspective of small business owner‐managers.

Women Philanthropists: The Wave of the Future

Jewish women are becoming increasingly prominent in the world of philanthropy, distributing wealth they accumulate, inherit, or share with current spouses. These vignettes are taken from a study designed to explore the nature of philanthropic giving among Jewish women through the stories they tell. It considers the motives that impel Jewish women philanthropists to donate significant sums of money to others and examines how and why they make their philanthropic decisions. The study looks at how the women perceive themselves in their roles as philanthropists and the manner in which they conduct their philanthropic endeavors.

Senior executives' personal values: the role personal values play in decisions regarding corporate philanthropy a theoretical model

Corporate philanthropy is increasingly emerging as an issue that demands a response from corporate Australia. The recent Asian Tsunami has heightened shareholder interest in the philanthropic actions of Australian corporate boards. There are many issues of interest in the area of corporate philanthropy but the influence of individual senior executives on individual corporations' decision-making process is of interest to those making the decisions whether to donate and those who are seeking the support of corporate Australia. This study seeks to review the prior literature and develop a theoretical decision-making model that includes senior executives' personally held values as an essential component. In particular, it attempts to present a model that demonstrates the implicit role that personally held values play when a corporation makes philanthropic decisions.

The role of strategic philanthropy in marketing strategy

Outlines the concept of strategic philanthropy, assesses its development and evolution, gives examples of the stakeholder focus, discusses marketing issues and addresses elements to consider in implementation. Organizations have long realized the benefits of benevolent philanthropy in supporting community, employees and the interests of investors. It has only been in recent years that organizations have formalized and integrated the philanthropic decisions with corporate citizenship and other key strategic organizational performance‐related decisions. Organizations in the twenty‐first century are increasingly concerned about managing societal issues in marketing to benefit key stakeholder interests. A new definition of strategic philanthropy is developed and contrasted with other initiatives that link marketing and society. Finally, suggestions for future research are provided.