Do Companies Manage their Donations based on their Slack Resources? A Panel Data Analysis of US Corporate Donations through their Corporate Foundations for the Period 2001-2010

In recent decades corporate philanthropy has increasingly been framed as a strategic corporate activity(Porter & Kramer, 2002). This strategic framing of corporate philanthropy is typically held to be in contrast to the traditional description of philanthropy as a firm's most discretionary social responsibility. So, does `strategic' when applied to philanthropy mean that a company spends its discretionary philanthropy budget in deliberate ways (philanthropy strategy), or has philanthropy become an central strategic activity (like R&D) which is integrated into the core strategies of the firm (strategic philanthropy)?;One way to illuminate this distinction is to consider the link between organizational financial slack (which measures resources available for discretionary spending) and corporate giving. A significant positive link would suggest that the concept of `strategic' applied to philanthropy is largely a matter of having a philanthropy strategy, while the lack of such a link would lend some support that firms are increasingly adopting deeper strategic philanthropy. The central hypothesis of the study is that the level of corporate donations is significantly positively correlated to the level of financial slack - that is, that corporate philanthropic spending has not yet become deeply strategic.;This study investigates the relationship between financial slack and company donations to their foundations for large US corporations during the period 2001-2010 using a nested-models structural equation panel data methodology which is an extension of traditional panel data approaches.;The study finds general support for a positive slack-donations link, and therefore for the assertion that companies do, in fact, adjust their giving based on changing levels of slack In addition, the study indicates that the slack-donations relationship lost statistical significance during the economic downturn of the 2008-2010 period - suggesting that that adverse economic conditions may bring to the forefront the discretionary quality of donations as a part of overall corporate spending.;The study finds little support for other potential drivers of corporate donations, with the exception of CEO duality. It appears, then, that the word `strategic' when used with philanthropy most often still represents the deliberate and careful spending of discretionary donations budgets rather than philanthropy deeply embedded within a company's strategy.