The geography of giving: The effect of corporate headquarters on local charities

Abstract

We use data on the locations of the head offices of publicly traded U.S. firms to study the impact of corporate headquarters on the receipts of local charitable organizations. Cities like Houston, San Jose, and San Francisco gained significant numbers of corporate headquarters over the past two decades, while cities like Chicago and Los Angeles lost. Our analysis suggests that attracting or retaining the headquarters of an average firm yields approximately $10 million per year in contributions to local non-profits, while the headquarters of a larger firm (one ranked among the top 1000 in total market value) yields about $25 million per year. Likewise, we find that each $1000 increase in the market value of the firms headquartered in a city yields 70 cents or more to local non-profits. Most of the increase in charitable contributions arises from an effect on the number of highly-compensated individuals in a city, rather than through direct donations by the corporations themselves. The Geography of Giving CAHRS WP08-08Cornell University Center for Advanced Human Resource Studies Page 3 of 39 AbstractWe use data on the locations of the head offices of publicly traded U.S. firms to study the impact of corporate headquarters on the receipts of local charitable organizations. Cities like Houston, San Jose, and San Francisco gained significant numbers of corporate headquarters over the past two decades, while cities like Chicago and Los Angeles lost. Our analysis suggests that attracting or retaining the headquarters of an average firm yields approximately $10 million per year in contributions to local non-profits, while the headquarters of a larger firm (one ranked among the top 1000 in total market value) yields about $25 million per year. Likewise, we find that each $1000 increase in the market value of the firms headquartered in a city yields 70 cents or more to local non-profits. Most of the increase in charitable contributions arises from an effect on the number of highly-compensated individuals in a city, rather than through direct donations by the corporations themselves.* We thank John Straub and Abigail Payne for comments on a preliminary draft, and Kevin Stange, Richard Crump, David Walton, and Daniel Hartley for outstanding research assistance. We also thank seminar participants at Cornell, Illinois and Princeton for helpful suggestions.

Government Intervention, Peers’ Giving and Corporate Philanthropy: Evidence from Chinese Private SMEs

“…Second, socially responsible actions are usually oriented toward the communities where executives live. Card et al (2010) suggest that there are potential leaders' personal benefits that can explain why firms conduct philanthropic activities oriented toward communities. Firms try to improve their relations with the community so as to get better treatment from the local regulatory agencies, to motivate local government to improve education and health care services, so as to get a better workforce, and to promote sales especially for the firms that sell a sizeable fraction of their production locally.…”

“…In the eyes of some firms, community peers' giving could signal important potential benefits in dealing with the government. Such a perception is reasonable given the significant role of government in allocating resources (Card et al 2010) and shaping corporate financial performance (Li and Zhang 2007;Sheng et al 2011;Tsang 1998) in China. From this perspective, community peers' giving may be seen by other firms as a competition for better treatment from the government, which motivates them to invest more in CP.…”

Spatial Distribution Pattern of the Headquarters of Listed Firms in China

“…When emergencies arise in the market, listed companies can recapitalize themselves and spread risk with the aid of the capital market [9,10]. Headquarters outsource a large amount of work, such as advertising, consulting, accounting, and financing, which stimulates the development of the producer services industry and creates more jobs and tax revenue [11][12][13][14][15]. In addition, employees at these headquarters, who are regarded as elite members of society, can help enhance levels of local consumption.…”

“…The "headquarters economy" is also considered "a path of industrial upgrade". Examples of municipalities seeking to attract headquarter activity can be found across North America, Europe, and the Asia-Pacific region [13,[17][18][19][20]. Therefore, the headquarters of listed firms can be considered an ideal research object for microeconomic studies, and the location and behavior of these headquarters have drawn a great deal of attention from both the public and private sectors [17].…”

Knowledge nodes and international networks of connection: representations of private philanthropy by elite higher education institutions

“…Moreover, if donors have overseas connections, HEIs may benefit by taking the opportunity to extend their global reach and gain access to new international markets. Whilst the importance of space, place, site and territoriality have been investigated in relation to the study of scientific enterprise and the development of 'spaces of knowledge' (Livingstone, 1995: 5;see also, Driver, 1992;Livingstone, 1994Livingstone, , 2000Card et al, 2010;Gluckler and Ries, 2012), there has been little analysis of how HEIs use philanthropy to project a global image and, equally, how priorities for funding are shaped by the personal biographies of individual donors.…”