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Not All Charitable Efforts Have Same Impact For Businesses

charity . / Credit: Donation Image via Shutterstock

Businesses looking to boost their image by supporting local charities should focus on quantity, not quality, new research shows.

A University of Missouri study suggests that businesses have a better chance of building a reputation as a good corporate citizen by donating $100,000 each to 10 charities, as opposed to $1 million to one charity.

Shane Macfarlan, a Missouri anthropologist and the study's author, said helping a greater number of people builds a positive reputation more than helping a few people many times. "Good reputations are good business," Macfarlan said.

The study's results have implications for politicians as well, Macfarlan said. For example, a politician hoping for re-election may wish to back legislation that benefits many people, as opposed to giving tremendous help to a smaller group.

As part of the research, Macfarlan studied the work habits and reputations of men in a remote village in the Caribbean islands. The isolation of the village reduced outside influences on reputation and allowed the study to focus solely on the effects of specific behaviors on social standing.

The men in the experiment were all involved in the production of bay oil, a tree-leaf extract used to make cosmetics by companies such as Burt's Bees. Because bay-oil production is labor-intensive and requires village men help one another, Macfarlan was able to identify why some men attracted both many volunteer helpers and the respect of their peers, while others had few helpers and little regard in the community.

Macfarlan said helping many people led to individuals achieving higher regard among their peers. "However, other men, who helped a smaller number of people, would end up with a worse reputation, although both men performed a similar total number of helping acts," he said. "Moreover, men with the best reputations received a greater amount of assistance from a greater number of people when they needed it most, whether it was in agricultural production or assistance after disasters, such as hurricanes."

Macfarlan said previously, researchers creating computer models of reputation-based cooperation had only considered the effect of the number of acts of cooperation on reputations, not the breadth of cooperation. He believes his current study can offer guidance to businesses on how to improve their public images.

The study, "Cooperative Behavior and Pro-social Reputation Dynamics in a Dominican Village," was recently published in the journal Proceedings of the Royal Society B.

Follow Chad Brooks on Twitter @cbrooks76 or BusinessNewsDaily @BNDarticles. We're also on Facebook & Google+. This story originally published on BusinessNewsDaily.

Chad Brooks

Chad Brooks is a Chicago-based freelance writer who has nearly 15 years experience in the media business. A graduate of Indiana University, he spent nearly a decade as a staff reporter for the Daily Herald in suburban Chicago, covering a wide array of topics including, local and state government, crime, the legal system and education. Following his years at the newspaper Chad worked in public relations, helping promote small businesses throughout the U.S. Follow him on Twitter.