In 2002, a promising new nonprofit that wanted to link school teachers in search of basic classroom supplies with willing donors nearly collapsed because of potential backers' concerns that despite having a worthwhile goal, the organization itself would not be able to execute its mission competently.
What a difference a few years can make. Donorschoose.org is thriving today. But the nonprofit's near-death experience was one of the reasons that compelled a team of academic researchers to explore how and why consumers, investors and other stakeholders pigeonhole a company using stereotypes, often to its detriment. The study -- the first of its kind ever undertaken -- reveals that consumers frequently assign stereotypical views to nonprofits, such as Donorschoose.org, that brand them as warm, generous and caring organizations, but lacking the competence to produce high-quality goods or services and run financially sound businesses. In contrast, for-profit companies are seen as more competent from a balance sheet perspective, but are not necessarily socially aware.
Source: Knowledge @ Wharton
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