Abstract

The purpose of this research paper is to identify which types of corporate philanthropy (CP): cause-related marketing (CRM) or sponsorship, create higher moralcapital under two conditions: proactive or reactive (following a scandal). Results showed that CP created higher moral capital for a proactive company than for a reactive company. Both CRM and sponsorship were perceived as more sincere in the proactive company than the reactive company. However, CRM was seen as self-serving in the reactive company, but not the proactive company. The study demonstrated that companies need to take into account the different types of CP, as it has an effect on their moral capital. Socially proactive firms should engage in both CRM and sponsorship philanthropy, as both types can generate high moral capital, which creates better company reputation. However, CP may not be the most effective or appropriate strategy for creating moral capital following negative publicity.