Theoretical Development of Corporate Charitable Giving

Theoretical Development of Corporate Charitable Giving: Comparison

Please note this is a comparison between Version 3 by Yan Liu and Version 2 by Yan Liu.

Corporate charitable giving refers to the unconditional provision of funds or materials by companies to governments or related institutions in a voluntary and non-reciprocal manner to solve social problems such as poverty, education, natural disasters and public health. Corporate charitable giving not only brings strategic resources and information channels needed for enterprise innovation, but also helps companies enhance their moral capital, improve their brand image and increase their political legitimacy.

corporate social responsibility
corporate charitable giving
theoretical framework
enterprise innovation

1. Introduction

Corporate philanthropy as a business practice has been on the rise since the early 1950s, when companies mainly made cash donations to nonprofit organizations through foundations, as an effective way to demonstrate their social responsibility (Eells, 1958; Honer, 1955) [12,13]. In the 1970s and 1980s, globalization led to a trend of increased corporate mobility, which had a negative impact on the long-term relationship between companies and the workforce. Companies begin to explore the use of corporate philanthropy to restore these labor relations (Kasper and Fulton, 2006) [14]. Since the early 1990s, companies have turned to charitable giving as a response to stakeholder demands for corporate social engagement (Marinetto, 1999) [15], and to using philanthropic initiatives to advance business interests through strategic alliances with marketing, government affairs, research and development, and human-resources functions (Porter and Kramer, 2002) [16]. Over the past few years, companies have increasingly turned to corporate philanthropy as a valuable strategy to increase their competitive advantage.

With the growing interest in corporate charitable giving among industry and academia, there is a substantial body of literature on corporate philanthropy motivation. A number of studies on the motivation of charitable giving and its impact on financial performance have yielded rich results (Porter and Kramer, 2002; J. L. Campbell, 2007; Godfrey, 2005) [16,20,21]. In the complex and changing economic environment, the improvement of innovation performance is a manifestation of the enhanced technological strength of enterprises. Due to the scarcity of resources and the limitation of technology, the resources needed for enterprise innovation often cannot be obtained on their own, so external resource supplement and policy support is crucial. The essence of corporate profit-maximization determines that the motivation of corporate charitable giving is to obtain resource compensation, reduce government regulation and obtain better political resources. However, most of the existing literature always focuses on the determinants of corporate charitable giving and the motivations for giving, while few scholars relate the impact of charitable giving to the associated economic consequences. Whether charitable giving occurs out of altruism or strategic decision-making, it can lead to a mutual exchange of resources that can boost innovation. A general overview of research on corporate-charitable-giving motives is shown in Table 3.

Table 3. A General Review of Research on Corporate-Charitable-Giving Motivations.

Research Theme: Concept
Level of Analysis	Key Ideas
The altruism of corporate charitable giving	Altruistic motives are the main reason for corporate charitable giving. (Cowton 1987) [22] The altruistic model of corporate philanthropy is considered to be a non-strategic interpretation of corporate giving. Companies use social standards as the basis for correct, good and just social action. Firms engage in altruistic philanthropy with the single goal of helping others. (Useem 1988; Sharfman 1994) [23,24] One possible motivation is that a person actually prefers the public benefit provided by the donation. In this case, the money belonging to the charity has a utility (or reward value) that is independent of the individual’s contribution. This preference for public goods can be considered “altruism”, and if this is the only motivation for the donation, the behavior is called “pure altruism”. (Andreoni 1989) [25] There is an ethical element to the decision to engage in corporate philanthropy that cannot be ignored. (Shaw and Post 1993) [26] Despite its noble goals, the altruistic model itself is often not a strong explanation for corporate philanthropy, even in the most diverse societies, which is because it ignores the profit maximization goals and other strategic objectives of corporations. (Neiheisel 1994) [27] Corporate philanthropy can be driven by factors such as the sense of aesthetic pleasure. (File and Prince 1998) [28] The study shows that firms who have a history of giving to charity cite altruistic motives for their behavior. (Campbell et al., 1999) [29] Pro-social behavior theorists claim that managers’ behavior is also motivated by ethical norms, which is a strong reason for corporate giving. (Valor 2006) [30] Corporate philanthropy may be the result of top management’s values of benevolence and integrity. (Choi and Wang 2007) [31]
The strategic nature of corporate charitable giving	Many companies which have a strong sense of corporate social responsibility, however, are turning away from traditional giving and toward a more market-driven strategic management, bottom-line approach to philanthropy. (Mescon and Tilson 1987) [32]
The strategic nature of corporate charitable giving	Profit maximization is an important motivation driving corporate charitable giving. (Navarro 1988) [33] Managers use corporate philanthropy to promote management and corporate interests. (Haley 1991) [34] From a strategic perspective, corporate philanthropy can be further divided into economic or political dimensions. (Neiheisel 1994; Young and Burlingame 1996) [9,27] When companies engage in philanthropy in a more strategic and professional way, they can not only do work that has a greater impact on society, but they can also create tangible and intangible benefits for themselves in terms of goodwill, employee morale and public support. (Collins 1995) [35] Firms engage in philanthropic activities as a means of improving the financial performance of their organizations. (Sanchez 2000) [36] While corporate violations of environmental and labor regulations can reduce their public image, charitable giving can reduce the extent of the decline. (Williams and Barrett 2000) [37] Corporate philanthropy has a positive impact on corporate financial performance because decisions about charitable giving can strategically enhance a firm’s image and reputation (Porter and Kramer 2002; Godfrey 2005) [16,21] Firms are becoming increasingly strategic in their philanthropic activities. (Saiia et al., 2003) [38] Some companies are increasingly emphasizing corporate charitable giving as a strategic tool. (Patten 2008) [39] High social sentiment and politically-related economic motivations should trigger a more efficient market reaction to corporate philanthropic involvement, which could then address more directly and effectively the strategic motivation and the “insurance-like” protection property of reputational capital behind corporate philanthropy. (Gao et al., 2012) [40] Managed rent withdrawals are motivated as corporate donations. (Masulis and Reza 2015) [41] Corporate reputation effects emphasize on altruistic motivation, while strategic philanthropy focuses more on egoism. (Xu et al., 2017) [42] Corporate decisions to be charitable are not based solely on purely philanthropic motives, but depend more on the source of revenue. (Oh et al., 2018) [43] When controlling shareholders intend to transfer wealth out of the company, they may use the company’s resources for charitable giving. (Chen et al., 2018) [44]

2. The Altruism of Corporate Charitable Giving

企业慈善事业的利他主义模式（沙夫曼，1994;Useem，1988）[

The altruistic model of corporate philanthropy (Sharfman, 1994; Useem, 1988) [

23，

24]被认为是对企业捐赠的非战略解释。根据这一理论，企业将社会标准作为正确、良好和公正的社会行动的基础。公司从事利他慈善事业的唯一目标是帮助他人，因此慈善事业被认为独立于产生利润的运营压力。正如以前的研究人员所指出的（Shaw and Post，1993）[

] is considered to be a non-strategic interpretation of corporate giving. According to this theory, companies use social standards as the basis for correct, good and just social action. Firms engage in altruistic philanthropy with the single goal of helping others, so philanthropy is considered independent of the operational pressures that generate profits. As previous researchers have pointed out (Shaw and Post, 1993) [

26]，参与企业慈善事业的决定有一个不容忽视的道德因素。先前的研究发现，企业慈善事业可以由审美愉悦感（File和Prince，1998）[

], there is an ethical element to the decision to engage in corporate philanthropy that cannot be ignored. Previous research has found that corporate philanthropy can be driven by factors such as the sense of aesthetic pleasure (File and Prince, 1998) [

28]或利他主义（Campbell等人，1999）[

] or altruism (Campbell et al., 1999) [

29]等因素驱动。公司有义务参与企业慈善事业，而不是出于任何自利的财务考虑（Shaw and Post，1993）[

]. Firms have an obligation to engage in corporate philanthropy, rather than out of any self-interested financial considerations (Shaw and Post, 1993) [

26]。总之，有大量文献表明，从事慈善事业的决定是由道德义务驱动的。

]. In sum, there is a substantial body of literature that reveals the decision to engage in philanthropy is driven by moral obligation.

正如Sharfman（1994）[

As Sharfman (1994) [

24]在利他主义模型中指出的那样，慈善事业的本质是道德的。因此，管理者有道德责任，以促进社会整体福利的方式分配公司资源，无论这些行为是否带来具体结果，例如增加利润或提升形象。Choi and Wang （2007） [

] has pointed out in the altruistic model, the essence of philanthropy is ethical. Thus, managers have an ethical responsibility to allocate the firm’s resources in a way that promotes the overall welfare of society, regardless of whether these actions lead to specific results, such as increased profits or an enhanced image. Choi and Wang (2007) [

31] 断言，企业慈善事业可能是最高管理层仁慈和正直价值观的结果。除了经济原因，亲社会行为理论家声称，管理者的行为也是由道德规范驱动的，这是企业给予的有力理由（Valor，2006）[

] asserted that corporate philanthropy may be the result of top management’s values of benevolence and integrity. In addition to economic reasons, pro-social behavior theorists claim that managers’ behavior is also motivated by ethical norms, which is a strong reason for corporate giving (Valor, 2006) [

30]。从这个角度来看，企业慈善捐赠的动机可以归类为利他主义。尽管有崇高的目标，但利他主义模式本身往往不是企业慈善事业的有力解释，即使在最多样化的社会中也是如此，因为它忽视了企业的利润最大化目标和其他战略目标（Neiheisel，1994）[

]. From this perspective, the motivation for corporate charitable giving can be categorized as altruistic. Despite its noble goals, the altruistic model itself is often not a strong explanation for corporate philanthropy, even in the most diverse societies, because it ignores the profit-maximization goals and other strategic objectives of corporations (Neiheisel, 1994) [

27]。

3. 企业慈善捐赠的战略性质The Strategic Nature of Corporate Charitable Giving

在战略性质的层面上，公司慈善事业的战略动机是与任何其他公司职能一样，为直接的货币利益做出贡献。从战略角度来看，企业慈善事业可以进一步分为经济或政治层面（Neiheisel，1994年;杨和伯林格姆，1996）[

At the level of strategic nature, corporate philanthropy is strategically motivated by the intent to contribute to direct monetary benefits, in the same way as any other corporate function. From a strategic perspective, corporate philanthropy can be further divided into economic or political dimensions (Neiheisel, 1994; Young and Burlingame, 1996) [

9，

27]。战略慈善事业的经济学表明，公司从事慈善活动是改善其组织财务绩效的一种手段（Sanchez，2000）[

]. The economics of strategic philanthropy suggests that firms engage in philanthropic activities as a means of improving the financial performance of their organizations (Sanchez, 2000) [

36]，而政治观点是公司从事企业慈善事业是因为关键环境行为者施加的政治和制度压力（Neiheisel，1994）[

], while the political view is that firms engage in corporate philanthropy because of the political and institutional pressure exerted on them by key environmental actors (Neiheisel, 1994) [

27]。

基于前述研究，企业慈善的战略动机可以从以下两个角度来解释。首先，全球竞争加剧要求企业通过各种渠道建立竞争优势。企业慈善事业可以帮助企业获得品牌认可和忠诚度，将自己宣传为“对社会负责”的公司。其次，取消政府机构和削减以前支持艺术和社会服务的国家预算刺激了志愿机构和私人基金会的发展。随着政府支持的减少，越来越多的私人志愿组织正试图从私营公司筹集资金。反过来，这些公司成立了基金会来传递这些要求。

在企业慈善捐赠的研究中，许多研究都集中在慈善捐赠对企业价值、财务业绩和其他因素的影响上，作为提升企业价值的手段。当慈善捐赠被视为与公司相关的营销的一部分时，它通常与公司绩效的改善直接相关。一些学者认为，企业慈善事业对企业财务业绩有积极影响，因为有关慈善捐赠的决定可以战略性地提升公司的形象和声誉（Godfrey，2005;波特和克莱默，2002）[

Based on the previous research, the strategic motivation of corporate philanthropy can be explained from the following two perspectives. Firstly, increased global competition requires firms to build a competitive advantage through various channels. Corporate philanthropy can help firms gain brand recognition and loyalty, promoting themselves as “socially responsible” firms. Secondly, the elimination of government agencies and cuts to state budgets that previously supported the arts and social services have stimulated the growth of voluntary agencies and private foundations. As government support dwindles, a growing number of private voluntary organizations are trying to raise money from private firms. In turn, these firms set up foundations to pass on these requests.

In the research on corporate charitable giving, a number of studies have focused on the impact of charitable giving on corporate value, financial performance, and other factors as a means of enhancing corporate value. When charitable giving is taken as part of marketing related to firms, it is usually directly related to the improvement of corporate performance. Some scholars argue that corporate philanthropy has a positive impact on corporate financial performance because decisions about charitable giving can strategically enhance a firm’s image and reputation (Godfrey, 2005; Porter and Kramer, 2002) [

16，

21]。同时，企业慈善捐赠通常作为企业从资源依赖的角度降低与资源获取相关的风险的一种手段（Haley，1991）[

]. At the same time, corporate charitable giving often serves as a means for firms to reduce the risks associated with resource acquisition from the perspective of resource dependence (Haley, 1991) [

34]。

此外，企业还试图通过慈善捐赠创造积极的社会形象，以减轻或抵消其他领域的负面社会影响。例如，Williams和Barrett（2000）[

Furthermore, firms also try to create a positive social image through charitable giving to mitigate or offset negative social impact in other areas. For instance, Williams and Barrett (2000) [

37]研究了企业慈善捐赠计划对违反EPA（环境保护局）和OSHA（职业安全与健康管理局）法规的公司数量与其公众形象之间关联的影响，并发现虽然企业违反环境和劳动法规会降低其公众形象，但慈善捐赠可以减少下降的程度。因此，与CSR的观点相反（Carroll，1991）[45]，公司可能会增加慈善捐赠以保持其积极的社会形象，而不是将资源用于纠正其他领域的负面社会影响。

] examined the impact of corporate charitable giving programs on the association between the number of corporate violations of EPA (Environmental Protection Agency) and OSHA (Occupational Safety and Health Administration) regulations and their public image, and found that while corporate violations of environmental and labor regulations can reduce their public image, charitable giving can reduce the extent of the decline. Therefore, contrary to the CSR perspective (Carroll, 1991) [45], firms may increase charitable giving to maintain their positive social image, rather than devote resources to correcting negative social impact in other areas.