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October 29, 2007

Companies That Give More to Charity Are More Profitable, Study Finds

Companies that nurture a culture of philanthropy are more profitable, says research produced by Dover Management, a company that operates a mutual fund that invests in corporations committed to charitable giving, reports The Wall Street Journal. The data support results of a similar study produced a year ago by university researchers.

Dover found that companies with a solid link between giving and operating earnings outperformed the Standard & Poor’s 500 index by 3.5 percentage points over five years.

Dover’s research is further supported by a study last year by Baruch Lev and Christine Petrovits of the New York University Stern School of Business and Suresh Radhakrishnan of the University of Texas at Dallas School of Management, which said, “corporate charitable contributions are effective in enhancing revenues in the ‘consumer sectors,’ such as retailers and financial services.”

To learn more about last year’s study, read an article in The Chronicle of Philanthropy.

(A paid subscription is required to view the Journal article, and a paid subscription or short-term pass is required to view the Chronicle article.)

Monday October 29, 2007 | Permalink

Comments

1. Just because there is correlation doesn’t mean there is a relationship. There could be other factors, independent of each other, that contribute to both.

   — Philanthro Joe    Oct 29, 04:06 PM    #

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