Signaling responsibility, deflecting controversy: Strategic and institutional influences on the charitable giving of corporate foundations in the health sector
ISBN: 978-1-78190-545-6, eISBN: 978-1-78190-546-3
Publication date: 15 October 2013
Abstract
Corporate foundations – entities established to regularize corporate giving at an arm’s length removed from the firm – command substantial resources, root companies in the nonprofit sectors of their host communities, indirectly augment perceptions of corporate responsibility, and help firms to deflect controversies in an attentive global media environment. Despite these important roles, relatively little research has examined the institutional and strategic factors that influence such proximate charitable giving by firms. Using systematic data on foundations linked to S&P 3000 firms in the health sector – a growing domain in which public trust in high-stakes products and services is critical – fixed-effects models illustrate the primary role of network influences on giving: corporate foundations give substantially more in years following higher contributions by other (noncorporate) foundations in the health sector in a firm’s headquarters locality and also following increased contributions by industry peers through their corporate foundations. Giving also appears to reflect strategic reputational concerns, in that foundation contributions increase significantly following controversies associated with the corporate parent’s products and/or services. By contrast, giving tends to decline as the presence of outside directors on a firm’s board increases, as well as when firms carry heavier debt loads. Combined, these findings suggest that corporate foundations serve as a strategic proxy for the firm, reflecting both a company's position in community and interfirm networks while also mitigating the threat of reputational challenges.
Acknowledgements
Acknowledgment
Thanks are due to the Robert Wood Johnson Foundation for its generous support of this research; the RWJF, however, bears no responsibility for the analysis reported here. This research benefited from feedback offered by Megan Andrew, Graeme Boushey, Forrest Briscoe, Seth Freedman, Alice Goffman, Rick Hall, Colin Jerolmack, Brayden King, Paula Lantz, Trevon Logan, Edward Norton, Brendan Nyhan, Mark Peterson, Gabriel Rossman, David Snow, Patricia Strach, and Stefan Timmermans. Thanks are also due to the National Center for Charitable Statistics at the Urban Institute for providing access to foundation data.
Citation
Walker, E.T. (2013), "Signaling responsibility, deflecting controversy: Strategic and institutional influences on the charitable giving of corporate foundations in the health sector", Voices of Globalization (Research in Political Sociology, Vol. 21), Emerald Group Publishing Limited, Leeds, pp. 181-214. https://doi.org/10.1108/S0895-9935(2013)0000021012
Publisher
:Emerald Group Publishing Limited
Copyright © 2013 Emerald Group Publishing Limited