The Voice: The Shareholders' Motives Behind Corporate Donations

Abstract

What motivates shareholders to become prosocial activists? At the onset of the COVID-19 pandemic, political and media attention demanded covid-related donations from large corporations. We study shareholders' support for such donations exploiting the heightened media scrutiny from annual general meetings. We find that reputational gains to shareholders of donating firms led prominent individual shareholders to seek donations. In contrast, large institutional shareholders, who are hardly associated with specific corporations in their portfolios, preferred to donate themselves and opposed donations in their footprints. This mechanism also operates outside pandemic times and points to media attention to grow support for prosocial decisions