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Wright State University
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Release: Immediate

Tis the season for giving or not: new marketing study identifies motivation for corporate gifts

IOWA CITY, Iowa -- Business owners who donate surplus goods to food banks are motivated by a desire to help others, and not necessarily by potential impact on the company's bottom line, according to a study co-authored by a University of Iowa marketing professor.

In their study of why some companies give to charity and why others do not, UI associate professor Tom Gruca and his co-authors found that the personal attitude of a decision-maker in a key position has a stronger impact on a firm's policy on charitable giving than do business-related factors.

Gruca co-authored the study, with Leland Campbell, a marketing professor at Bentley College in Waltham, Mass., and Charles S. Gulas, an assistant professor of marketing at Wright State University in Dayton, Ohio. Their study, "Corporate Giving Behavior and Decision-Maker Social Consciousness," is scheduled for publication in an upcoming issue of the Journal of Business Ethics.

"Overall, altruistic motivation appears to be stronger than profit motive," said Bentley's Campbell. "However, firms that don't give to charity at all tend to justify their policy for business reasons, such as lack of surplus food supplies or an inability to respond from a labor perspective at the present time."

The researchers surveyed 64 food distributors and producers in western Massachusetts, reflecting the most common donors to food banks. Nearly 60 percent of the respondents said they had given to food banks to fighting hunger locally or to be good corporate citizens. About one third of the business managers said tax deductions were a factor, but this was a lesser motivator.

Some 25 respondents in the survey said they did not give food to charity. Most managers who did not make donations (89 percent) said their firms did not have any surplus to give, with 28 percent saying their product reputation may suffer by identifying them with lesser quality or past-peak freshness. "Some firms' increased control of production quality reduces the availability of surplus food for donations," said Iowa's Gruca. "Just-in-time inventory policies further reduce the supply of surplus."

In light of these findings, the co-authors advise food banks to focus on how a company's donation will help the so-called "deserving" needy. "We found that in the same geographic area, there was quite a difference in the seriousness of problems such as homelessness and hunger as perceived by donor and non-donor respondents," he said. "However, there was no difference with respect to domestic violence, which was seen as a serious problem by both groups. By focusing on how donations help children and families in crisis as well as others, a food bank can better appeal to current non-donor firms."

"If you can identify the decision-makers in a company, and especially the individual influencer who is aware of existing social problems, then you can make specific appeals to which they can--and will want to--respond," added Bentley's Campbell. "Instead of knocking on their door for a one-time request, it would be more effective to educate those decision-makers over time. Enable them to understand current social needs and how their company can make a difference in the community, and they will respond."

12/11/98