Consumer Response to Foundations and Firms When Firms Own or Sponsor a Foundation

Corporate philanthropy has been around for centuries. Corporations have used it to shed a positive light on company in the consumers’ eyes. As more and more consumers are asking for companies to be more involved in making the world better, corporate social responsibility (CSR) has become increasingly more popular in the business world. CSR goes beyond having a positive mission, it is businesses holding themselves accountable for their own actions, which can take many forms ranging from philanthropic efforts, like starting or partnering with foundations, to trying to reduce their own environmental impact. Corporate foundations, especially, has become a popular way to utilize CSR as a way to enhance public appearance. Many well-known companies have started their own corporate foundations, like Walmart and Wells Fargo Bank. Both companies gather some proceeds and give it to the foundation that the companies set up, and then that money is then used as grants or gifts for causes established when the foundations were created. These corporate foundations, bearing the names of the companies, are then able to do well for the companies. Because so many are practicing CSR, businesses have to find ways to practice CSR that set themselves apart from competition. The purpose of this research is twofold. First, by using experiments, we aim to explore consumer attitude and purchase intentions toward corporations that either partner with a foundation or develop their own foundation. Second, we are interested in attitude and donation likelihood toward foundations that are: owned by a corporation or sponsored by a corporation. The results support our hypotheses that corporate foundations have a higher perceived level of trust and of perceived impact. This research is necessary for providing strategic insights to corporations toward the better CSR strategy (own a foundation vs. sponsor with a foundation). Also, investigating consumer response to foundations’ strategic positioning in the marketplace will allow optimizing consumer contributions to the cause