It is often believed that mega-events like the Olympics are good for a city or country. Many of the benefits are implied but they still get a monetary value attached when selling it to the public; 'leadership','world-stage', etc. The hangover that occurs economically afterward often leaves host countries wondering who did the math.
But if you are a small charity relying on corporate donations, it may be a good idea to get behind all of those taxpayers underwriting big occasions. Even smaller events like political conventions, and certainly the Super Bowl, deliver a morale-boost in the form of hometown pride and that translates into corporate largess, says a new paper that refutes beliefs that corporate philanthropy remains stable even during high-profile activities.
The scholars based their conclusions on analysis of data on the charitable giving of locally-headquartered Fortune 1000 firms between 1980 and 2006.
The paper also found that corporate giving can dramatically increase during times of local natural disasters. The findings on the impact of mega-events and disasters underline that, despite the belief that most major corporations act globally, they are also affected by what is happening in the communities where they are headquartered, and where many of their executive staff live. Expect the corporations of Oklahoma to be out in force supporting the families after the tornado disaster on Monday.
"For non-profit managers, it suggests that one potentially reasonable strategy might be to tie some of their efforts in fundraising and building local corporate relationships to these mega-events," says András Tilcsik, an assistant professor of strategic management at the Rotman School of Management at the University of Toronto, who co-wrote the study with Christopher Marquis, an associate professor at Harvard Business School. "Communities still really matter, even in this global age."
Charitable giving during times of natural disasters depended on how severe the damage was. Serious disasters saw a drop in charitable giving, whereas smaller-scale events increased giving.
Tilcsik recognizes that one explanation for the difference may be that during major disasters high-profile forms of support, such as federal government aid, step in. Local non-profits that ordinarily would be targeted for giving by corporations may be so negatively affected themselves -- such as through the displacement of their own staff and board members -- that they may not be able to receive donations or carry out their normal work.
Published in Administrative Science Quarterly.