Navigating the luxury-philanthropy paradox: the role of cause categorization in shaping consumer evaluations of luxury brands

Purpose Luxury brands often encounter a dilemma when engaging in philanthropic donations due to the conflicting nature of luxury and philanthropy, known as the “luxury–philanthropy paradox.” This research aims to investigate how different types of charitable causes influence consumer evaluations of luxury brands, focusing on cause categorization – whether a donation supports necessity or nonnecessity causes. This research investigates how cause categorization shapes brand evaluation when luxury brands engaged in philanthropic donations. Design/methodology/approach Four experiment studies were conducted using both real and fictitious brands, and a 2 (cause categorization: necessity vs nonnecessity) × 2 (luxury brand vs mass-market brand) between-subjects design was employed to test the proposed hypotheses. Brand evaluation served as dependent variable, perceived brand essence as the mediator and relationship norms as the moderator. Findings Results demonstrate that luxury brands receive more favorable evaluations when donating to nonnecessity (vs necessity) causes, as these causes better align with brand essence. This effect is mediated by perceived brand essence and strengthened in communal (vs exchange) relationships. Originality/value This research contributes to luxury branding and corporate social responsibility literature by identifying cause categorization as a novel factor that mitigates the luxury–philanthropy paradox. It also highlights brand essence as the underlying mechanism guiding consumer evaluations, offering practical insights for luxury brand managers navigating philanthropic engagement.