Corporate philanthropy and employee engagement

Abstract

The firm develops its identity through actions that reflect its business strategy. Some of those actions are social and show the social commitment of the company. Hence, philanthropic actions could be incorporated into the core business, through the implementation of a specific corporate philanthropy strategy. The company would then need to measure its financial and non-financial effects to evaluate the effectiveness of this strategy. Philanthropic actions impact not only on the community but also on other stakeholders, for example employees, and it would be useful to identify and measure these effects. This paper describes an empirical study of 232 European companies. The findings show that a company’s philanthropy strategies and the presence of women on the board impact on the attitude of its employees. Firms that have a corporate philanthropic strategy tend to have lower levels of labour controversies and incidents, with respect to those which apply discretional or sporadic philanthropic practices. The types of philanthropic practices adopted highlight and define the firm’s corporate identity and foster trust among its employees. The results of this study have implications for the design and management of corporate philanthropy strategies.