The Impact of Social Investing on Charitable Donations

Jake An, Donnel Briley, Shai Danziger, Shai Levi*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

5 Scopus citations

Abstract

We examine the impact of social investing on charitable donations using a unique data set consisting of investment behaviors and donation transactions for more than 10,000 customers of an investment app platform. We find that investors switching to a recently introduced social fund reduced their donations, mainly in charities supporting causes similar to those of the social fund. However, 79% of the investors that switched to the social fund did not donate before switching, so the social fund attracted more people to fund social causes. Still, because of the substitution effect, we estimate social funds have a positive effect on society only if their annual contributions to social causes are greater than 3.2% of the balance invested.

Original languageEnglish
Pages (from-to)1264-1274
Number of pages11
JournalManagement Science
Volume69
Issue number2
DOIs
StatePublished - Feb 2023

Funding

FundersFunder number
Henry Crown Institute of Business Research
UTS Business School
University of Technology Sydney
Jeremy Coller Foundation

    Keywords

    • ESG investment funds
    • charitable donations
    • social investing

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