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Not really.

Donations would help build the image of the business as a socially responsible corporate and would raise its goodwill. This would enable it to earn more profits in the future and, thus, actually increase shareholder's wealth.

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14y ago
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14y ago

While it is easy to see why you might think this, theoretically a sponsorship should be useful as an advertisement. Furthermore, if the sponsorship is of a nonprofit such as a scholarship or an AYSO team, the sponsorship could be tax deductible, thereby having no effect on income.

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Q: Does sponsorship contradict maximisation of shareholders wealth?
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