PHILANTHROPY AS A CORPORATE STRATEGY

An attempt to formulate the implications of corporate “philanthropy” by private firms is made in this paper. By philanthropy we mean the public activities of private agents, which are not carried out through the ordinary price mechanism. From the point of view of social roles, corporate philanthropy complements the price mechanism as do the government sector, non‐profit organizations and individuals. Here we formulate corporate philanthropy as the product of two possible motivations: either as a means of long‐term profit maximization, or as a direct element in an objective function of a firm.