Corporate Philanthropy Around the World and its Darker Motivations

Why do corporations donate to charity? Is it purely altruistic or does it serve the personal interests of corporate insiders? Does corporate philanthropy have benefits for the firm that can be seen to enhance its reputation or value? In this talk we examine corporate giving around the world with the hope of answering some of these questions. We focus on the important influence that country-level institutions, laws, and regulations have on corporate donations. We suggest that the motivations behind corporate philanthropy vary across nations and present evidence on the role of corruption in determining the level of donations provided. We show that in countries that suffer from higher levels of corruption, corporate donations tend to be greater, and this is specifically the case for donations of cash rather than in kind donations. We examine firm level characteristics that may moderate the relation between donations and corruption and find that a firm’s political connections play an important role. Our results suggest that firms without strong political connections may use corporate philanthropy as a means of influence in nations that struggle with corruption.

Speaker

Dr. Purda is Professor and RBC Fellow of Finance at Smith School of Business. Lynnette received her PhD from the Rotman School of Management at the University of Toronto and obtained her Chartered Financial Analyst designation in 2000.