Non-Profit vs. For-Profit Consumer Stereotypes

Last Updated Mar 25, 2010 9:41 PM EDT

According to new research from Stanford and Wharton, consumers tend to apply opposite stereotypes to non-profit and for-profit businesses. Non-profits are viewed as warm and caring, but not always competent; for-profits are viewed as competent, but not socially aware. So what can your organization do to counter these stereotypes?

Researchers Jennifer Aaker of the Stanford Graduate School of Business, Cassie Mogilner of Wharton and Kathleen D. Vohs of the Carlson School of Management at the University of Minnesota will be publishing their resulting paper, "Non-Profits Are Seen as Warm and For-Profits as Competent: Firm Stereotypes Matter," in the Journal of Consumer Research. Here are some ways for both non-profits and for-profits to overcome consumer stereotypes:

  • Show consumers that the organization is run competently, as this determines whether or not they will do business with you. The researchers cite HopeLab Foundation, whose products improve the lives of young cancer patients, as a non-profit that has shown competency through its "rigorous research and data-driven approaches."
  • Obtain endorsements and positive coverage from "authoritative" media outlets (e.g., The Wall Street Journal).
  • Get involved with a social cause.
  • Make sure that cause resonates with your product. "There needs to be a fit between brand essence and the social venture that they're supporting," Mogilner said in a Stanford press release.
For both non-profit and for-profit companies, showing that the usual stereotypes don't apply to your organization can be a key factor in gaining an edge over competitors. However, the degree to which a for-profit company is seen as socially aware likely won't make or break it. Yet the "warm but not competent" stereotype can be a non-profit's downfall:

"We found that competence is what really drives a consumer's intention to purchase," says Mogilner. "For non-profit firms stuck with the stereotype of being warm but not particularly competent, anything that boosts their perceived competence will help them survive in the marketplace."

Image courtesy of Flickr user e-magic, CC 2.0.

  • Stacy Blackman

    Stacy Sukov Blackman is president of Stacy Blackman Consulting, where she consults on MBA admissions. She earned her MBA from the Kellogg Graduate School of Management at Northwestern University and her Bachelor of Science from the Wharton School at the University of Pennsylvania. Stacy serves on the Board of Directors of AIGAC, the Association of International Graduate Admissions Consultants, and has published a guide to MBA Admissions, The MBA Application Roadmap.