Abstract
In this study we seek to determine whether catastrophic events lead to corporate charitable giving unrelated to levels of firm profitability. We examine the issue relative to the corporate philanthropic response to the 9/11 terrorist attacks of 2001. Based on a sample of 489 Fortune 500 companies, we find that differences in the extent of corporate contributions following 9/11 are positively and significantly associated with differences in firms' profitability. Further, while the degree of connection to the catastrophic event led to higher levels of giving in comparison to the contributions of less connected firms, differences in the extent of philanthropy are still␣related to short-term profitability for the more connected firms. The study thus provides evidence suggesting that even in the wake of catastrophic events, corporate philanthropic giving is constrained by economic concerns.
References
Aupperle K. E., Carroll A. B., Hatfield J. D. (1985). An Empirical Examination of the Relationship Between Corporate Social Responsibility and Profitability. Academy of Management Journal 28(2): 446–463
Buchholz A. K., Amason A. C., Rutherford M. A. (1999). Beyond Resources: the Mediating Effects of Top Management Discretion and Values on Corporate Philanthropy. Business & Society 38(2): 167–187
Carroll A. B. (1979). A Three-Dimensional Conceptual Model of Corporate Social Performance. Academy of Management Review 4(4): 497–505
Carroll A. B. (1991). The Pyramid of Corporate Social Responsibility: Toward the Moral Management of Organizational Stakeholders. Business Horizons 34(4): 39–48
Clikeman P. M. (2004). Return of the Socially Conscious Corporation. Strategic Financeu 85(10): 22–27
Conlin, M., J. Hempel, J. Tanzer and D. Polek: 2003, ‹The Corporate Donors: Business Week’s First Annual Ranking of America’s Most Philanthropic Companies’, Business Week (December 1), 92–96
Coy, P. and D. Foust: 2005, ‹Katrina’s Wake’, Business Week (September 12), 32–40
Dolfman M., Wasser S. (2004). 9/11 and the New York City Economy: a Borough-By-Borough Analysis. Monthly Labor Review 127(6): 3–33
Ernst & Ernst: 1976 et seq., Social Responsibility Disclosure (Cleveland, OH, Ernst & Ernst)
Galaskiewicz J. (1985). Social Organization of an Urban Grants Economy: A Study of Business Philanthropy and Nonprofit Organizations. Orlando, FL: Academic Press
Galaskiewicz J. (1997). An Urban Grants Economy Revisited: Corporate Charitable Contributions in the Twin Cities, 1979–81, 1987–89. Administrative Sciences Quarterly 42: 445–471
Gibbs N., M. Billips, M. Calabresi, S. B. Donnelly, M.␣Thompson, D. Waller, E. Martins, C. Masters, C.␣A. Miranda and G. Fulton: 2005, ‹An American tragedy’, Time (September 12): 28–49
Gloede, B.: 2005, ‹Flirting With Disaster’, Mediaweek (September 19), 13
Hempel, J. and L. Gard: 2004, ‹The Corporate Givers’, Business Week (3732), 100–104
Lavelle, L.: 2001, ‹Giving as Never Before’, Business Week (October 1), 10
Levine, G.: 2004, ‹Gates: Foundation Give $3M to Tsunami Victims; Topped by Pfizer’s $35M Donation’. forbes.com www.forbes.com/2004/12/30/123autofacescan05.html
Maddox K. E., Siegfried J. J. (1980). The Effect of Economic Structure on Corporate Philanthropy, in J. J. Siegfried (ed.) The Economics of Firm Size, Market Structure, and Social Performance. Washington, DC: Federal Trade Commission, pp. 202–225
McElroy K. M., Siegfried J. J. (1985). The Effect of Firm Size on Corporate Philanthropy. Quarterly Review of Economics and Business 25: 18–24
Navarro P. (1988). Why do Corporations Give to Charity? Journal of Business 61: 65–93
Patten, D. M.: 2006, Does the Market Reward Corporate Charitable Giving? Evidence from the U.S. Response to the 2004 Tsunami Relief Effort. Presented at the European Accounting Association Annual Congress, Dublin, Ireland
Porter M. E., Kramer M. R. (2002). The Competitive Advantage of Corporate Philanthropy. Harvard Business Review 80(12): 56–68
Saiia D. H., Carroll A. B., Buchholtz A. K. (2003). Philanthropy as Strategy. Business & Society 42: 169–201
Seifert B., Morris S. A., Bartkus B. R. (2003). Comparing Big Givers and Small Givers: Financial Correlates of Corporate Philanthropy. Journal of Business Ethics 45(3): 195–211
Smith C. (1994). The New Corporate Philanthropy. Harvard Business Review 72(3): 105–116
Sraeel H. (2001). In Terror’s Wake, a Lifetime of Lessons on Tragedy, Resilience. Future Banker 5(8): 5
Time: 2005, ‹Sea of Sorrow’. Time (January 10), 29–39
U.S. Corporations Donate $180M for Tsunami Aid: 2005, Cnn.com www.cnn.com/2005/US/01/09/tsunami.corporate.giving.ap/
Useem, M.: 1988, ‹Market and Institutional Factors in Corporate Contributions’, California Management Review (Winter), 77–88
Vogl A. J. (2003). Does it Pay to be Good? Across the Board 40(1): 16–23
Wokutch R. E., Spencer B. A. (1987). Corporate Saints and Sinners: the Effects of Philanthropic and Illegal Activity on Organizational Performance. California Management Review 29(2): 62–77
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Crampton, W., Patten, D. Social Responsiveness, Profitability and Catastrophic Events: Evidence on the Corporate Philanthropic Response to 9/11. J Bus Ethics 81, 863–873 (2008). https://doi.org/10.1007/s10551-007-9553-7
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10551-007-9553-7