The Impact of Social Investing on Charitable Donations

Jake An (), Donnel Briley (), Shai Danziger () and Shai Levi ()
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Jake An: Raiz Invest Limited, Sydney, New South Wales 2000, Australia
Donnel Briley: Marketing Discipline, University of Sydney Business School, Darlington, New South Wales 2006, Australia
Shai Danziger: Coller School of Management, Tel-Aviv University, Ramat Aviv 6997801, Tel Aviv, Israel
Shai Levi: Coller School of Management, Tel-Aviv University, Ramat Aviv 6997801, Tel Aviv, Israel

Management Science, 2023, vol. 69, issue 2, 1264-1274

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.

Keywords: social investing; charitable donations; ESG investment funds (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:69:y:2023:i:2:p:1264-1274

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