Giving a little to many or a lot to a few? The returns to variety in corporate philanthropy

Haram Seo, Jiao Luo, Aseem Kaul

Research output: Contribution to journalArticlepeer-review

5 Scopus citations


Research Summary: We examine the returns to specialization versus variety in corporate philanthropy. Acknowledging the theoretical rationale for both a specialist and a generalist approach to philanthropy, we took a question-driven, abductive approach, and found a robust positive association between philanthropic variety and firm profitability for donations by large US public corporations from 2003 to 2011. This association held for variety across causes but not within causes, for nonlocal giving and for giving by diversified firms, and was weaker for firms whose donations faced greater scrutiny. These findings are consistent with a moral hazard explanation whereby firms take advantage of the relatively inelastic support for philanthropy within a cause area by strategically spreading their donations across a wide range of supporter interests, thus maximizing profits. Managerial Summary: Do firms earn higher profits if they spread their philanthropic donations across many different causes, or if they concentrate them among a few? Examining donations by large US public corporations we found that firms earned higher returns when they gave to many different causes, holding the total amount of donations constant; that this relationship was primarily true for nonlocal giving and giving by multinational and multi-business firms, and was weaker for firms under shareholder scrutiny or those that gave inconsistently over time. Our best explanation for these results is that supporters of corporate philanthropy care more about whether a firm gives to a cause than how much it gives, making it optimal for firms to give minimal amounts to a large variety of causes.

Original languageEnglish (US)
Pages (from-to)1734-1764
Number of pages31
JournalStrategic Management Journal
Issue number9
StatePublished - Jun 15 2021
Externally publishedYes

Bibliographical note

Funding Information:
We thank Editor Alfonso Gambardella and two anonymous reviewers for their generous and insightful feedback throughout the review process. We are also grateful to Luis Ballesteros, Magali Delmas, Jonathan Doh, Shon Hiatt, Mae McDonnell, Kate Odziemkowska, Carrie Oelberger, Phanish Puranam, Myles Shaver, Jasjit Singh, PK Toh, Timothy Werner, Minyuan Zhao, Chris Zott, seminar participants at INSEAD, Purdue University, Singapore Management University, and University of Texas at Austin, Washington University at St. Louis, participants at the 2018 Strategy and Business Environment conference, the 2018 Alliance for Research on Corporate Sustainability conference, the 2018 Academy of Management Conference, the 2018 Strategic Management Society Annual conferences, and the 2019 Utah-BYU Winter Strategy Conference, as well as anonymous reviewers from the Academy of Management Annual Conference and the Strategic Management Society Annual Conference, for their valuable comments and feedback. We thank the Alliance for Research on Corporate Sustainability for awarding an earlier version of this paper its 2018 Outstanding Paper Award, and the Strategic Management Division of the Academy of Management for awarding it a Distinguished Paper Award, also in 2018.

Publisher Copyright:
© 2021 John Wiley & Sons Ltd.


  • abductive approach
  • corporate philanthropy
  • market for social goods
  • moral hazard
  • strategic CSR


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