Mood and Ethical Decision Making: Positive Affect and Corporate Philanthropy

This study examines the influence of mood (‘affect’) on corporate philanthropic giving. Drawing on group emotions theory and affect-infused decision theory, we advance the argument that firms allocate greater resources to philanthropy when headquarters-based employees are in a more positive affective state. We also describe three boundary conditions in this relationship—executives’ embeddedness in the firm, executives’ latitude to engage in philanthropic giving, and the firm’s track record of corporate social irresponsibility. We test our arguments using a longitudinal dataset of philanthropic giving by U.S. firms. Our study contributes to the literature by shedding light on the role of affect in shaping the decision to allocate resources to corporate philanthropy.