Corporate Charity

Last night on the walk back from the local I passed the premises of a local letting agency. Whilst gawping at the cost of renting a house in Nottingham I noticed something odd. The shop window had a large picture of a football team captioned with

Castle Estates are the proud sponsors of Pegasus YFC

Why did they sacrifice prominent advertising space for this?

We can but assume that Castle Estates reckon they'll earn greater profit by advertising their community work, rather than another property.

This would fit with a larger trend for businesses to conduct prominent 'good works'. Sainsbury's and Tesco both proudly sponsor charities. 'Corporate responsibility' is the name of the game. You do not have to be overly cynical to think that they are doing this to attract custom from approving consumers.

But why?

Why does it attract consumers to know that firms are giving some (probably minimal) amount of their profits to good works? As all profit comes from the pocket of the consumer anyway, surely this charity just means higher prices? Would it not be more efficient to shop somewhere uncharitable, thus paying less, and then give your savings to the charity of your choice?

If behavioural economics has shown one thing it is that people don't just care about simple monetary gain. We are complex beings with complex motives. We like to feel good and charitable as we buy our groceries, so Tesco sells us that feeling by giving to charity. Meanwhile Castle Estates proudly supports our community.