Tilcsik & Marquis (2013). Punctuated Generosity: How Mega-events and Natural Disasters Affect Corporate Philanthropy in U.S. Communities

Authors:
András Tilcsik (andras.tilcsik@rotman.utoronto.ca)
Christopher Marquis (cmarquis@hbs.edu)

Interviewers:
Johan Chu (johanchu@umich.edu)
Michael Mauskapf (m-mauskapf@kellogg.northwestern.edu)

Article link:      http://asq.sagepub.com/content/58/1/111

Question 1. You make a strong argument that large events (planned or not) create changes in the behavior of organizations within a geographic community. What got you thinking about emplaced events? How did you decide on the setting of corporate philanthropy?

We became interested in local events for a couple of different reasons. One is that even though there has been a revival of interest in geographic communities, most research tended to look at how the persistent features of communities matter for organizations. A common assumption has been that, for example, being headquartered in, say, Atlanta rather than New York matters because these places have longstanding differences in their local norms, networks, traditions, and so on. While that’s very important, we felt that a key mechanism was missing. Atlanta, for example, hosted the Summer Olympics in 1996, and being headquartered in that community at that time had some really powerful effects on Atlanta-based firms. Mary Ann Glynn has a wonderful paper on this specific case in JMS in 2008, where she shows how the Olympics reshaped the networks of local organizations and changed their behaviors, at least for some time. This is an example of an important, geographically delimited, community-based influence on organizations, but if we focused solely on stable differences between communities, we would completely miss this. That’s why it’s so important to have what we call an “emplaced and eventful” perspective.

Another reason why we were drawn to this is that these large local events—from hurricanes to the Super Bowl to major political conventions—are interesting in and of themselves. Even if they only last for a day or a week, their ramifications can shake up communities. And policymakers, urban leaders, economists, and other scholars hotly debate the consequences. But typically the focus has been on regional economic consequences, such as job creation and tourism due to mega-events. We wanted to understand the social and organizational consequences.

The focus on corporate philanthropy as an outcome made sense because prior work suggested several interesting mechanisms that could link these events to charitable giving by locally based firms even beyond the event itself. And because the majority of corporate donations tend to stay in the headquarters community, this outcome is important because it has major consequences for the vibrancy of the local nonprofit sector and civic life.

Question 2. You looked at Fortune 1000 companies in core-based statistical areas (CBSAs). Can you speculate on how your research applies to smaller organizations or to organizations that are “networked”? Would the same dynamics apply in virtual online communities (e.g., Anonymous and its Project Chanology protests against Scientology)?

It is interesting to speculate how these findings may generalize. In regard to smaller organizations, there are reasons to think that such organizations may be even more susceptible to effects of local events than larger, more global firms. And much prior work has shown that larger organizations serve as role models for smaller ones, and so as larger organizations become more involved in local philanthropy and nonprofits as a result of events, smaller organizations may follow. We think that the dynamics of how these effects may vary by type of organization is very interesting to study in the future.

But for online communities, we are not as sure if the findings generalize to that context. As we note in the paper, a focus on events provides an important rationale for studying geographic communities because events “take place.” That is, geographic communities are sites of shared experience, and the identity-based and mobilization mechanisms we theorize in the paper are particularly likely to be triggered by direct, in-person involvement. While research has shown that many of the social, cultural and regulative processes of geographic communities do generalize to online communities, the event effects we study in the paper may mainly apply to geographic communities.

Question 3. You touch on the endogeneity of mega-events and philanthropy, and argue that such “institutional recursivity” can act as a mechanism for imprinting. Can you see in your data whether certain communities are institutionally different—i.e., have higher levels of corporate philanthropy and propensity to host mega-events? Also, it seems that natural disasters are not always unexpected (e.g. hurricanes in New Orleans). Are communities with a propensity for natural disasters different from other communities?

Certainly, there seem to be some important and persistent institutional differences across communities. For example, even after controlling for a bunch of relevant factors, the typical level of corporate giving in some communities is much higher than in others. This has been well documented in the literature. For example, Joe Galaskiewicz has a number of important studies about how the organization of corporations in the Twin Cities maintained a high level of giving in that community. And we see it in our data as well. Of course, some communities are also more prone to hosting mega-events or experiencing disasters. In this paper we took pains to control away such differences and to isolate within-community changes over time while holding constant stable institutional and other differences across communities. But you do bring up a very interesting question about repeated events and their connections to the institutional characteristics of a community. This may be a nice way to connect punctuating local events to stable community characteristics.

It is also interesting to consider whether there is something special about communities that experience mega-events or major disasters relatively frequently. As you note, in certain communities, such as New Orleans, there is the expectation that disasters may occur, which likely affects the community and resident corporations in an enduring way. Statistically controlling for these enduring features of communities is why including community fixed-effects in our models was crucial. But we think that further study on what these characteristics mean for organizations headquartered in the area is worthy of future study. We agree that the notion that some communities experience repeated punctuations that are, at least to some degree, anticipated (even if their timing often isn’t predictable) is quite intriguing.

Question 4. Do mega-events durably change the identities of the recipients of corporate philanthropy? It’s not clear where increased giving goes: Do nonprofits associated with a relevant cause benefit disproportionately? The mechanisms you suggest in the paper seem to privilege large, high-visibility, and prestigious non-profits: the build-up to mega-events creates enduring network ties while disasters have no such build-up. (And the data sources in your triangulation analysis only cover larger non-profits). Could mega-events create solidarity among elite non-profits and contributors, and so shift contributions to elite “want”-based organizations from “need”-based organizations serving the disadvantaged?

Great questions! We started exploring some of these issues, but these analyses didn’t fit in the paper. One thing we looked at, although only cursorily, was whether the boost to corporate giving due to a mega-event tended to benefit certain types of nonprofits, and we compared effects across the standard nonprofit categories like culture, recreation, sports, housing, health care, youth development, and so on. No major differences jumped out—it didn’t seem like any such categories benefitted disproportionately more or less than the others. But we haven’t looked at the broader categories of elite-oriented versus welfare-oriented nonprofits, and that’s a great question to explore. For the reasons you mention, it’s certainly possible that mega-events (or some mega-events, or mega-events in some communities) will shift contributions to elite-oriented nonprofits, so these events might have some interesting distributional consequences. Recent research by Marquis, Davis, and Glynn (2013 in Organization Science) on how corporations in communities with more cohesive local elites are more likely to support elite nonprofits also supports this line of thinking. And this would also be very much in line with the complex image that emerges from the economics and sociology literatures on mega-events: Despite the claims of event promoters and sports boosters, these events bring a really mixed bag of blessings and curses, can have all sorts of distributional effects, and may have important implications for inequality. And you’re suggesting that they might matter for inequality not just between, say, urban developers and the urban poor who are often displaced by events like the Olympics but also for inequality between different organizations, such as nonprofits with different orientations—which in turn can have further effects on the community itself. It’s definitely worth looking at this, and perhaps that could be Paper #2, so thank you!

Question 5. What question did we miss? Please ask yourselves a good question, and answer it.

[András & Chris’s question:] How did the paper evolve and change over time?

We initially started with the general idea that major public spectacles like the Olympics or the Super Bowl may have a powerful effect on corporate social action in the host community. It was only somewhat later that we also became interested in natural disasters, which are a very different kind of event—an exogenous destructive shock.

When we initially submitted it to ASQ, the paper focused on documenting the main-effect relationships, some of which were surprising and quite dramatic, but the paper was largely silent on the mechanisms and contingencies. The reviewers were very helpful in making us think through the mechanisms more clearly, and the paper evolved quite a bit as a result. But each reviewer had a fairly different take on this. One reviewer helped us think about firm- and community-level moderators that would get at the mechanisms indirectly. Another reviewer suggested the use of qualitative and anecdotal illustrations, which helped us talk about potential mechanisms in a more concrete and compelling way. And another reviewer was really helpful in pushing us to explicate the logic of the underlying theory and to identify boundary conditions more clearly. Our editor, Martin Ruef, was great at synthesizing all these fairly different comments and helping us make the paper better without ballooning it. So, the final paper was much more explicit about both the potential mechanisms and the cases when these effects are less likely to occur. The process really was a constructive conversation with the reviewers—the way it should be.

One comment

  1. […] Dahl, Cristian Dezső, and David Ross on CEO fatherhood and its effect on employee wages, and András Tilcsik and Chris Marquis about their research on natural disasters and corporate philanthropy. The interviews are informal, […]

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