The Effects of Corporate Philanthropy on Reputation Following Natural Disasters: The Benefits of Helping When Hurting ^*

Abstract

Crises and natural disasters represent significant challenges to business, straining financial and human resources. However, corporate philanthropy during these times can result in significant benefits to the reputation of firms, while assisting in crisis recovery. This research focuses on the 2016 earthquake in Kaikōura, New Zealand to examine consumer reactions to corporate philanthropy. Two between-subject experiments were used to test the proposed hypotheses. Our results suggest that consumers do not differ significantly in their perceptions of the reputation of a company when donations of money or employee time are made by the company to assist the Red Cross. However, if a company is not engaged in corporate philanthropy, its reputation is significantly lower than when it engages in corporate philanthropy. We also found that the reputational benefits of giving to corporate philanthropy are weakened when consumers are highly sceptical of underlying corporate motives. Finally, we found that companies who give, despite being adversely impacted by a natural disaster, are perceived more favourably in terms of reputation, when compared with firms that have not been hurt by the natural disaster. We discuss the implications of this research for both practitioners and researchers.

Citation

Bennett-Longley, G. and Laufer, D. (2024), "The Effects of Corporate Philanthropy on Reputation Following Natural Disasters: The Benefits of Helping When Hurting ^* ", Einwiller, S., Seiffert-Brockmann, J., Romenti, S. and Valentini, C. (Ed.) Communication in Uncertain Times (Advances in Public Relations and Communication Management, Vol. 7), Emerald Publishing Limited, Leeds, pp. 159-172. https://doi.org/10.1108/S2398-391420240000007011