Corporate giving seen linked to reputation

April 21, 2009

Image enhancement may be the underlying driver of charitable donations made by British companies operating in countries that lack basic human rights, a new study says.

Firms doing business in countries like China, Sudan, Burma and the Democratic Republic of Congo give about 70 percent more to charity than companies without a presence in such countries, says the study published in the Journal of Management Studies.

Giving by companies with a presence in one or more countries lacking civil liberties give an average of $1.7 million, compared to $2.9 million for other companies.

"Our findings suggest that companies are seeking to offset negative impressions in the eyes of the public that arise from doing business in such countries by making greater gifts to charity," Stephen Pavelin, study author, says in a statement.

The study was unable, however, to determine how much of the charitable donations went to projects in Britain and how much was directed to the host countries.

The study was conducted by Pavelin, a reader in economics at Henley Business School at the University of Reading, Stephen Brammer, deputy director of the Centre for Business Organizations and Society, and Lynda Porter, a lecturer in economics at Henley.

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