Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/31432
Authors: 
Brown, William O.
Helland, Eric
Smith, Janet Kiholm
Year of Publication: 
2006
Series/Report no.: 
Working paper series // Claremont Institute for Economic Policy Studies 2006-01
Abstract: 
We study corporate philanthropy using an original database that includes firm-level data on dollar giving, giving priorities, governance, and managerial involvement in giving programs. Results provide some support for the theory that giving enhances shareholder value, as firms in the same industry tend to adopt similar giving practices and firms that advertise more intensively also give more to charity. But much of our evidence indicates that agency costs play a prominent role in explaining corporate giving. Firms with larger boards of directors are associated with significantly more cash giving and with the establishment of corporate foundations. Consistent with effective monitoring by creditors, firms with higher debt-to-value ratios give less cash to charities and are less likely to establish foundations. The empirical work considers the impact of industry regulation on giving and controls for state philanthropy laws and fiduciary responsibility laws.
Subjects: 
Corporate philanthropy : corporate governance
boards of directors
monitoring, agency costs
JEL: 
G34
G38
K22
L51
M41
Document Type: 
Working Paper

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