Nonprofit Scandals 

We provide an examination of the weight consumers give to corporate apologies. We undertook two experiments (N = 1,410) where participants read accusations that a company had used a morally dubious supplier. Compared to statements that denied responsibility, apologies increased perceptions of both culpability (that the organization was responsible for the transgression) and of reform (that the organization was unlikely to repeat the transgressions in the future). Reform signals had stronger impacts on consumer trust and consumer support than culpability signals. Because of this, the net effect of the apology on trust and consumer intentions was generally positive, suggesting corporations embroiled in a scandal will benefit from issuing a corporate apology.

 

Hornsey, M. J., Chapman, C. M., La Macchia, S., & Loakes, J. (2024). Corporate apologies are effective because reform signals are weighted more heavily than culpability signals. Journal of Business Research, 177, 114620. https://doi.org/10.1016/j.jbusres.2024.114620

Why is it that bad things sometimes happen within ostensibly good organizations? In this paper, we analyze interview data from senior nonprofit leaders to understand the factors contributing to trust violations within nonprofits. We learn that three features of the nonprofit sector may unfortunately leave nonprofits more vulnerable to scandals: corporatization, resource scarcity, and assumed moral integrity.

 

Gillespie, N., Anesa, M., Lizzio-Wilson, M., Chapman, C. M., Healy, K., & Hornsey, M. J. (2023). How do sector level factors influence trust violations in not-for-profit organizations? A multilevel model. Journal of Business Ethics.

https://doi.org/10.1007/s10551-023-05429-6

Do nonprofits suffer harsher penalties that commercial organizations if they become embroiled in scandal? Short answer: yes. In three experiments (collective N = 1372) participants were told that an organization (nonprofit vs commercial) had engaged in fraud, exploitation of women, or unethical labor practices. Results were consistent with the moral disillusionment hypothesis: nonprofits were penalized more harshly than commercial organizations when they breached consumer trust.

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Hornsey, M. J., Chapman, C. M., Mangan, H., La Macchia, S., & Gillespie, N. (2021). The moral disillusionment model of organizational transgressions: Ethical transgressions trigger more negative reactions from consumers when committed by nonprofits. Journal of Business Ethics, 172, 653–671.

https://doi.org/10.1007/s10551-020-04492-7 

This article reports a systematic review of evidence generated between 1988 and 2020 on the relationship between trust and charitable giving.  A meta-analysis of data from 81,604 people in 31 countries confirmed a positive association: people who trust more also give more. The relationship was relatively small, however, and varied significantly depending on the type of trust assessed.

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Chapman, C. M., Hornsey, M. J., & Gillespie, N. (2021). To what extent is trust a prerequisite for charitable giving?  A systematic review and meta-analysis. Nonprofit and Voluntary Sector Quarterly, 50(6), 1274-1303.

https://doi.org/10.1177/08997640211003250 

Recent high-profile scandals suggest the potential for a crisis of trust in charities, which could have negative consequences for the nonprofit sector as a whole. To assess the extent to which public trust has changed over time, we examined trust in nongovernmental organizations among 294,176 people in 31 countries over nine consecutive years using data from the Edelman Trust Barometer. After allowing for differences in absolute levels of trust and trends across countries, there was actually a small increase in global trust in the nonprofit sector. Overall, we find no evidence of a crisis of trust in nonprofits: scandals within individual organizations have not affected sectoral trust. 

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Chapman, C. M., Hornsey, M. J., & Gillespie, N. (2021). No global crisis of trust: A longitudinal and multinational examination of public trust in nonprofits. Nonprofit & Voluntary Sector Quarterly., 50(2), 441-457.

https://doi.org/10.1177/0899764020962221 

There is a double standard in public responses to scandals: nonprofits are penalized more harshly than commercial organizations for the same transgression (the “moral disillusionment effect”). We asked whether a second double standard exists when it comes to trust repair: can nonprofits regain trust and consumer support more quickly than commercial organizations after apologizing? Two experiments sadly found that the rate of repair was the same for nonprofits and commercial organizations. Apologies are effective, but they are equally effective for charities and businesses.

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Chapman, C. M., Hornsey, M. J., Mangan, H., Gillespie, N., La Macchia, S., & Lockey, S. (2021). Comparing the effectiveness of post-scandal apologies from nonprofit and commercial organizations:  An extension of moral disillusionment theory. Nonprofit and Voluntary Sector Quarterly.

https://doi.org/10.1177/08997640211062666

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Do nonprofits suffer harsher penalties that commercial organizations if they become embroiled in scandal? Short answer: yes. In three experiments (collective N = 1372) participants were told that an organization (nonprofit vs commercial) had engaged in fraud, exploitation of women, or unethical labor practices. Results were consistent with the moral disillusionment hypothesis: nonprofits were penalized more harshly than commercial organizations when they breached consumer trust.

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Hornsey, M. J., Chapman, C. M., Mangan, H., La Macchia, S., & Gillespie, N. (2021). The moral disillusionment model of organizational transgressions: Ethical transgressions trigger more negative reactions from consumers when committed by nonprofits. Journal of Business Ethics, 172, 653–671.

https://doi.org/10.1007/s10551-020-04492-7 

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