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Tax-Exempt Lobbying: Corporate Philanthropy as a Tool for Political Influence

Author

Listed:
  • Marianne Bertrand
  • Matilde Bombardini
  • Raymond Fisman
  • Francesco Trebbi

Abstract

We explore the role of charitable giving as a means of political influence. For philanthropic foundations associated with large US corporations, we present three different identification strategies that consistently point to the use of corporate social responsibility in ways that parallel the strategic use of political action committee (PAC) spending. Our estimates imply that 6.3 percent of corporate charitable giving may be politically motivated, an amount 2.5 times larger than annual PAC contributions and 35 percent of federal lobbying. Absent of disclosure requirements, charitable giving may be a form of corporate political influence undetected by voters and subsidized by taxpayers.

Suggested Citation

  • Marianne Bertrand & Matilde Bombardini & Raymond Fisman & Francesco Trebbi, 2020. "Tax-Exempt Lobbying: Corporate Philanthropy as a Tool for Political Influence," American Economic Review, American Economic Association, vol. 110(7), pages 2065-2102, July.
    • Handle: RePEc:aea:aecrev:v:110:y:2020:i:7:p:2065-2102
    DOI: 10.1257/aer.20180615
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    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship

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