The relationship between corporate philanthropy and shareholder wealth: A risk management perspective

I present a complex theoretical explanation that draws on multiple bodies of literature to present an academically rigorous version of a simple argument: good deeds earn chits. I advance/defend three core assertions: (1) corporate philanthropy can generate positive moral capital among communities and stakeholders, (2) moral capital can provide shareholders with insurance-like protection for a firm's relationship-based intangible assets. and (3) this protection contributes to shareholder wealth. I highlight several managerial implications of these core assertions.