When Companies Are Charitable, Their Employees Work Harder

 In Donor Impact

Originally Published by Richard Barney – Good360, USA.

When companies make an effort to give back and contribute to charitable causes, their employees tend to worker and more efficiently, according to a new study. When researchers Mirco Tonin and Michael Vlassopoulos began setting up their study (titled, “Corporate Philanthropy and Productivity: Evidence from an Online Real Effort Experiment”), they knew that previous research had shown that employees are generally more committed to companies that practice corporate responsibility. Furthermore, job seekers tend to find social responsible companies more desirable for employment.


However, the two researchers wanted to determine whether or not a company’s charitable actions would make its workers more effective and productive.


For the study, according to Pacific Standard Magazine, the two researchers set up an online experiment with 100 university students. The researchers gave the students tasks – in this case, inputting bibliographic information for academic research papers. They paid the students 20 pounds, in addition to 2.5 pence for each entry inputted. The students completed one work session with the traditional pay setup. However, for the following three sessions, the students had the opportunity to donate money to charity. They could ask the researchers to donate a lump sum of 10 pence per entry or a full 10 pounds, and they also had the opportunity to decide how much of the 10 pence per entry money they could keep (or donate to a charitable cause).


When the employees had the donation option, their productivity increased. Once the researchers analyzed their findings, they discovered that the students made 13 percent more entries when they had the option to donate as compared to the original, no-donation pay model. The types of donations (lump sum versus per entry) didn’t make any impact, but there was a noticeable increase in productivity once the students had the chance to direct money towards a charitable cause.


The bottom line: corporate giving makes sense morally, socially and financially.


If you work with a firm that’s looking to leverage corporate social responsibility efforts for company growth, consider reaching out to Good360. We specialize in pairing companies with excess products or returns with nonprofits or charities that could use those particular items for their charitable efforts. If you’d like to learn more, click here.


By Richard Barney – EVP Good360, USA.

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