Corporate philanthropy (CP) establishes a bridge between business and society through voluntary and nonreciprocal giving. Yet, ample evidence shows firms can benefit from CP – commonly coined as the Business Case for CP. Research has taken different theoretical perspectives on the issue, mostly focusing on the benefits derived from favorable stakeholder perceptions, such as reputation or legitimacy, in response to corporate giving. However, the potential of CP to strategically shape the context of the firm with targeted social impact has been neglected. To fill this gap, our paper takes a nonmarket strategy lens to provide a more nuanced conceptualization of CP and its outcomes. It reveals how different types of CP can leverage firm knowledge. Our model proposes an agentic, impact-centered explanation how firms can benefit from CP by targeting and shaping their nonmarket environment – independent from stakeholder perception. This contributes to a deeper understanding of CP's potential for achieving competitive advantage through targeted social impact.
