An Empirical Study On The Relationship Between Charitable Donation And Financial Performance From The Perspective Of Enterprise Life Cycle

Philanthropy is becoming a main social behavior. Chinese "Charity Law" will be implemented since September 1, 2016. More and more enterprises, as the main of the commercial activities, take the charitable donations as a development strategic choice. In the domestic, the enterprises help the victims. In the ordinary course of business, companies choose different ways to donate in different areas to fulfill their social responsibilities. Corporate donation has become a hot topic. Some enterprises success because of philanthropy and thus enhance the image in the minds of consumers, So the charitable donation is virtually priceless advertising for enterprises, to enhance the enterprise performance. Some enterprises are not successful because of an inappropriate philanthropy. The consumers are unsatisfactory. Although giving some disbursement, the companies did not get good returns. Some small businesses get into the eyes of consumers because of a donation, become the "Reds" of the market and get good incomes.The relationship between enterprise performance and charitable behavior is important to a company. A same donation will take different impact for different companies. A same donation will take different impact for a company at different stage. So enterprises should take the appropriate donation policies according to their own circumstances. An important feature of the enterprise is at what stage. How does the life cycle impact the relationship of charitable giving and enterprise performance? This impact is important for companies to take charitable donations policy.In this article, I take an empirical research between corporate charitable donations and enterprise performance, from the perspective of the life cycle. In this paper, we will see the theory of charitable donations, the theory of corporate enterprise performance, the theory of enterprise life cycle. The research shows that there is a close relationship between enterprise performance and charitable donation, especially the growing stage. During the recession period, there are operational problems in the enterprises. So the charitable donations increase the enterprise burden.Finally, I give suggestions to the enterprises of different life cycle. Start-up companies should select appropriate donation field and amount according to their own economic situation, especially the industry with consumers closely. Enterprises should foster scientific concept of charity. For the growing companies and mature companies, there is good economic foundation. Charitable donations have also been recognized by business. Enterprises should carry out charitable theme creatively, lead social philanthropy and create their own brand of charity. There is poor financial situation with recession enterprises. Recession enterprises neglect charitable donations and should choose the right philanthropy time and right philanthropy field to reverse the situation.