Whether a company donates $1,000 a week for 52 weeks or gives $52,000 all at once, the total amount donated is the same. However, recent research by Alexander Park, an assistant professor of marketing at Indiana University Kelley School of Business in Indianapolis, finds that consumers view these donations differently. Specifically, his research shows that consumers see companies as more authentically motivated when they donate periodically ($1,000 a week for 52 weeks), leading them to evaluate the company more favorably.
“Companies contributing a significant amount periodically can improve things like reputation or outcome, compared to making an equivalent aggregate donation,” Alex said. “This is because consumers perceive the consistency of periodic donations as a cue of authentic prosocial motivation. This, in turn, increases the perceived impact of the donation and leads to more favorable evaluations of the company.”
Alex’s paper, “Consumers Prefer that Corporations Donate Periodically,” appears in the Journal of Marketing Research.
Alex worked with Yanyi Leng, Cynthia Cryder, and Fausto J. Gonzalez of the Olin Business School at Washington University in St. Louis; Jared Watson of the Stern School of Business at New York University; and Francesca Valsesia of the Foster School of Business at the University of Washington.
The researchers examined consumer responses to Facebook ads and email campaigns, as well as scenarios in which companies donated the same total amount either over time or all at once.
In one field study, they partnered with a Midwestern business that regularly donates to its community. Through the business email’s newsletter, researchers framed the company’s donation as “25,000 meals every month to local communities last year,” or “donated 300,000 meals to local communities last year,” in separate communications.
The results showed that subscribers were more likely to click and learn more about the company when the donation was described as periodic rather than in aggregate. In other words, the way the donation was described affected how willing consumers were to engage with the donor company.
However, Alex notes that communicating a periodic donation is not always better.
“A previously published paper found that periodic donations can actually harm perceptions of the donor, which is the opposite of what we have been finding. To better understand these differing results, we conducted a detailed comparison and found that an important condition is donation size,” Alex explained. “For example, if you take a total donation of $100 and break it into $2 a week, it will lead to less favorable perceptions of the company compared to substantially larger donation amounts. A company’s donation size is something to consider when deciding how to describe its charitable efforts.”
Alex and his fellow researchers hope these findings can help inform best practices for businesses.
“Over the past few decades, corporate social responsibility (CSR) has become a central part of many companies’ day-to-day operations. These efforts can address social challenges and improve a firm’s reputation.”
However, Alex emphasizes that consumers care deeply about whether a company’s motivations are genuine and notes that the current research is meant to guide ethical and thoughtful communication, not encourage performative giving.
“These findings do not suggest that companies should re-frame their donations as periodic if they are not actually structured that way,” Alex says. “That could be misleading. While some companies may pursue CSR for reputational benefits, many also have sincere prosocial intentions. Our hope is that when companies receive recognition for meaningful contributions, they will be more likely to continue them, creating a virtuous cycle of ongoing corporate social responsibility.”
