Using philanthropy as insurance
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Podcast "Philanthropy in question(s)" - Episode 32
Using philanthropy as insurance - Jiao Luo, Aseem Kaul and Haram Seo
In the event of problematic events threatening their reputation, do corporate sponsors withstand the sanctions imposed by their stakeholders better than others? And does this result in better financial performance for these corporate sponsors than for others, due to the sympathy capital accumulated over the years?
In this 32nd episode, Arthur Gautier, professor at ESSEC and the ESSEC Philanthropy Chair holder, presents an article by Jiao Luo, Aseem Kaul and Haram Seo published in 2018 and entitled “Winning us with trifles: Adverse selection in the use of philanthropy as insurance”.
The authors look at corporate philanthropy in the US oil industry, and explore the extent to which the "price" that companies "pay" with their philanthropy leads to favorable or unfavorable consequences for the company itself, as well as for society.
The main ideas of the article:
In this episode, Arthur Gautier presents four key results of the study:
The more an oil company spends on corporate philanthropy, the more it will pollute in the future.
The more generous oil companies are less likely to be sued.
The protective effect of corporate philanthropy is stronger in the case of accidents caused by corporate negligence.
Two limitations of this study: the causal relationship between corporate philanthropy and pollution has not been proven, and the singular nature of the oil industry precludes extending the results to all sectors of activity.
➡️ Listen to the episode above to learn more!
Other resources on the topic
🔹 Seo, H., Luo, J., & Kaul, A. 2021. Giving a little to many or a lot to a few? The returns to variety in corporate philanthropy. Strategic Management Journal, 42(9): 1734–1764.
🔹 Luo, J., & Kaul, A. 2019. Private action in public interest: The comparative governance of social issues. Strategic Management Journal, 40(4): 476–502.
🔹 Kaul, A., & Luo, J. 2018. An economic case for CSR: The comparative efficiency of for-profit firms in meeting consumer demand for social goods. Strategic Management Journal, 39(6): 1650–1677.
🔹 “TotalEnergies, un mécène qui fait de plus en plus tache dans le monde de l’art”, Télérama, 26 mai 2023.
🔹 “Greenwashing, comment les géants pétroliers ont changé de stratégie”, YouMatter, 19 janvier 2023.
🔹 “How Mobil pushed its oil agenda through 'charitable giving'”, The Guardian, 12 juin 2019.
Other episodes with related themes
Fundraising in times of crisis (John Godfrey, Alexandra Williamson)
Climate philanthropy (Edouard Morena)
Symbolic capital and coporate philanthropy (Yuliya Shymko, Thomas Roulet, Bernardo de Melo Pimentel)
Climate crisis and inequalities (Anne Monier)
Corporate philanthropy and major events (Andras Tilcsik, Christopher Marquis)
Sincerity in corporate philanthropy (Ilya Cuypers, Ping-Sheng Koh, Heli Wang)
Conservative foundations and climate skepticism (Natalie Rauscher)
Listen to all episodes of our podcast "Philanthropy in Question(s)"
Every last Wednesday of the month, in an episode of about 10 minutes, we share the discoveries of a researcher on philanthropy in France or internationally, all disciplines included. The goal? To give research a place in everyday life, to contribute to critical thinking and to shed light on societal issues through the prism of philanthropy. Dive with us into the heart of research on giving!
Also to be discovered: "Towards Strategic Philanthropy"
Based on interviews with philanthropists and professionals in the philanthropy sector, this podcast from the ESSEC Philanthropy Chair introduces you to the 5 key dimensions of philanthropy strategy: value, logical framework, style, time horizon and vehicle. The embodiment of the learnings from the book Towards Strategic Philanthropy published by Peter Frumkin, Anne-Claire Pache and Arthur Gautier at Odile Jacob in 2020. To your headphones!
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