Are Hedge Fund Managers’ Charitable Donations Strategic?
50 Pages Posted: 14 Dec 2015 Last revised: 21 Apr 2018
Date Written: April 12, 2018
We study whether hedge fund managers’ charitable donations are strategically made to further their business interests. We find that donations are driven by poor fund net flows and performance. Post-donation, donors’ funds experience significantly higher net flows compared to matched non-donating peers. These results are stronger for donations that are more likely to be strategic ‒ single one-off donations, donations to focal charities popular among the hedge fund community, and donations to charities that hold fundraising events catering to the hedge fund community. Taken together, these findings are consistent with strategic motivations driving at least some hedge fund donations.
Keywords: hedge funds, charitable donations, strategic giving
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