Examining the corporate-charity link

Sometimes the corporate-charity link is as obvious as a signpost, as in the CIBC Run for the Cure or the Sears National Kids Cancer Ride. Not so obvious are the ways in which partnerships between corporations and the non-profit sector are formed in the first place and how the two entities relate to each other.

Dr. Gloria Tian, an associate professor of finance at the University of Lethbridge’s Calgary campus, wants to know more about the relationship between the two sectors and how it enhances economic and social welfare in a country.

Tian, together with Dr. Ebenezer Asem, a U of L finance professor, and Dr. Olubunmi Faleye, a finance professor at Northeastern University in Boston, have been awarded an Insight Grant through the Social Sciences and Humanities Research Council worth almost $95,000 over four years to investigate the impact of corporate-charity connections in Canada.

“Corporations are the economic engine of a country but non-profit organizations also make important contributions to the overall economy,” says Tian. “If we don’t understand how the sectors relate to each other, we are missing important information as to how the relations could be enhanced.”

The research team proposes three related studies. One study will look at the relation between corporate-charity connections in Canada, measured through corporate directors’ affiliations with registered charities, corporations’ philanthropic activities and the effect of corporate governance.

The second study will examine whether companies who regularly give are less likely to engage in financial misconduct and, if they are sued by investors, how they modify their corporate policies in response.

The third study will look at the non-profit sector to determine whether corporate connections help improve the operational efficiency and growth prospects of local charities.

“These studies will address important questions of interest to businesses, charities, policy makers and other public and private stakeholders,” says Tian. “Canadian corporations and registered charities face unprecedented challenges in today’s global context. Strengthening the collaboration between these two sectors will help improve corporate decision-making and benefit society at large.”