Nonprofits are seen as warm and for-profits as competent: Firm stereotypes matter - Aaker et al. (2010) - Article

What are the two fundamental dimensions of warmth and competence?

People tend to judge others and organizations along two primary dimensions, namely warmth and competence. Warmth judgements include perceptions of generosity, kindness, honesty, sincerity, trustworthiness, thoughtfulness, and helpfulness. Demonstrating warmth tends to suggest a motivation to be other-focused and behave in line with moral codes. Competence judgements include confidence, intelligence, effectiveness, skillfulness, capability, and competitiveness. Demonstrating competence suggests the effective capacity to bring about one´s intent.

How are profit and non-profit organizations judged in their warmth and competence?

Organizations and companies are often viewed as having a reputation (a global evaluation accumulated over a period of time). These reputations often include judgements about warmth and competence. Non-profits and for-profits have distinct reputations that influence consumers´ views. Non-profits are perceived as more warm, whereas for-profits are perceived as more competent. For-profit executives are often promoted because they have shown competence and managerial skill, whereas executives of non-profits are promoted because they have shown commitment to the social good of the organization. These perceptions influence consumers´ willingness to buy from these organization. Consumers are more willing to buy a product of a for-profit organization, as it is seen as more competent. However, at the same time, for-profit organizations are often viewed as less trustworthy due to their fiscal association with the for-profit motive.

What is the consequence on consumers´ willingness to buy products from non-profits and for-profits?

The expectation is that the willingness to buy from non-profits is lower, because of relatively low perceptions of competence. Even though non-profits are judged higher in warmth, that is not a guarantee for a high-quality product. However, boosting a non-profits perceived competence should increase customers´ willingness to buy from that organization.  The results show that when non-profit organizations are perceived as both warm and competent, consumers are more willing to buy a product from them and the discrepancies in willingness to buy disappear.