Should charity begin at home? An empirical investigation of consumers’ responses to companies’ varying geographic allocations of donation budgets

Abstract

The final publication is available at Springer via http://dx.doi.org/10.1007/s10551-015-2832-9

In our globalized and interconnected world, companies are increasingly donating substantial amounts to good causes around the globe. Many companies choose to donate “at home” while others give to causes in faraway places where recipients are in dire need of support. Interestingly, past research on corporate donations has neglected the question of whether consumers differentially reward companies for geographically varying allocations of donation budgets. Through a mixed methods approach, this paper remedies this gap by developing and empirically testing a conceptual framework of consumers’ preferences for geographically varying allocations of corporate donation budgets. In a first step, two preliminary field studies (N 1 = 76; N 2 = 80) involving real donations explored customers’ preferences for donation allocations varying in geographical focus. A qualitative focus group study then investigated underlying rationales to inform the research and led to the development of hypotheses. Subsequently a large-scale between-subjects scenario experiment (N = 5770) tested the predictions. Overall, results indicate that, in contrast with current managerial practice, customers prefer companies that split donations equally between domestic and foreign recipients or even donate only abroad.