The Political Economics of Nature: Local Charity and Biodiversity Governance

Despite global government initiatives to promote biodiversity conservation, efforts often fall short due to weak enforcement and limited resources, resulting in greater calls for private and corporate engagement in managing and funding biodiversity preservation. Corporate donations to nonprofits and NGOs represent a critical funding stream for biodiversity efforts: preservation projects tend to be far removed from firms’ core business, such that firms often choose to contribute to other organizations that administer these activities. Nevertheless, corporate philanthropy is often motivated by self-interested regulatory and reputational considerations as much as, if not more than, ecological outcomes.​Using a novel geospatial dataset that matches protected area (PA) designations with US establishment locations and granular corporate giving data, this paper investigates firms’ targeted use of charitable funding to manage biodiversity exposure and impact. Exploiting first-time PA designations as a shock to firms’ regulatory and reputational incentives, we find that firms significantly increase local charitable donations in the year preceding a first-time PA designation near their establishments. These donations flow primarily to neighborhood organizations, and align closely with the PA governing body: donations flow to local councils when establishments are located near state and federally governed PAs, and to environmental and biodiversity NGOs when they are located near NGO-managed PAs. These findings are concentrated in chemical establishments’ exposure to local PA designations. Funding of local councils is associated with reduced local county spending on parks and greater geographic distance between firms’ establishments and PA boundaries, and funding of neighborhood organizations is associated with increased toxic releases near newly designated PAs.These findings highlight that not all corporate charitable flows towards conservation efforts are created equal, with some NGO funding – primarily by firms in chemical industries – enabling favorable regulatory and reputational outcomes. They indicate a need for increased transparency in nonprofit and NGO funding to ensure private fund flows align with not only financial, but also ecological incentives.