The effects of strategic corporate philanthropy on consumer perceptions: an experimental assessment

Abstract

There are many objectives for corporate philanthropic activity beyond altruism. Financial gain, increased image, and thwarting negative publicity have been suggested as potential objectives for corporate giving. This dissertation develops a 2X2 classification schema as a framework for empirical investigation and managerial decision making. Additionally this dissertation examines current models of corporate philanthropy and develops a new model for the use of philanthropy in crisis management using stakeholder theory. Finally it presents experimental assessments of various types of philanthropy based on the classification schema. Philanthropic activity is assessed in the context of two controlled experiments. The first experiment examines the perceptions of African-Americans versus other ethnic groups based on philanthropic activity directed toward African-Americans versus the general population. These perceptions are also examined in the context of a crisis (after a firm has been found to be discriminatory toward African-Americans) versus a good will gesture. A second experiment will conduct a closer examination of philanthropic activity in the crisis context by replicating the crisis conditions in the first experiment with modified experimental manipulations based on the results of the first study. Results indicate philanthropy is an effective strategic option for corporate or brand image objectives, but ineffective for brand evaluation and purchase objectives. In addition philanthropy directed toward a particular segment also has a positive effect on consumers outside of that segment. Finally, philanthropy as a part of a recovery strategy appears to have a consistent but marginal effect on consumer perceptions of brand equity variables.

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