This study explores the proposition that the specific social causes targeted by corporate philanthropy influence its effects on labor performance. We introduce a categorization based on social psychology, distinguishing between welfare-shocks philanthropy, aimed at providing welfare restitution for victims of disruptions, and chronic-conditions philanthropy, focused on welfare improvement for those facing longstanding problems. Our experimental evidence demonstrates that exposure to welfare-shocks philanthropy significantly enhances workers’ production, accuracy, and efficiency. In contrast, labor performance tends to decrease under chronic-conditions philanthropy and remains unchanged in the absence of philanthropy. These results broadly generalize in matched difference-in-difference estimates spanning 12 years of philanthropic activity by U.S. corporations. Our findings suggest that not all philanthropic efforts are equally motivating for employees and underscore the strategic importance of the philanthropic focus in influencing labor performance, both positively and negatively. Consequently, this study helps reconcile previous varying results regarding the strategic value of corporate philanthropy, offering a nuanced understanding of how this non-financial incentive can shape workforce dynamics and guide the design of more effective philanthropic strategies.
