Research & Insights

Reputation Matters In Partnerships Between Businesses and Nonprofits

Businesses and nonprofits win when they partner together, but new research suggests that the business’ reputation has an impact on which side gets the biggest boost.

The findings come from a series of studies conducted by Caglar Irmak, Sankar Sen and C. B. Bhattacharya that were published in a 2015 issue of the journal Marketing Letters. According to the researchers, companies with a low reputation get a boost by partnering with a nonprofit, while on the other hand, nonprofits benefit most when they partner with high-reputation companies.

In the study, 301 participants first received an article from the website of a nonprofit organization describing its work on AIDS prevention and treatment. Participants then read an article discussing a partnership between the organization and either a pharmaceutical company or a computer company.

Some of the articles described the company as having a high reputation, “making it to the top 10 list of Fortune’s annual survey of the world’s Most Admired Companies 14 times in the last 15 years.” Other articles described the company as having “yet to establish a credible corporate reputation, never having gained mention in Fortune’s annual survey of the world’s Most Admired Companies.” Finally, some articles had the company pledging $1.7 million to the nonprofit, while others had the company pledging $8,000 to the nonprofit.

The students were then asked about their attitudes towards the nonprofit organization – whether they liked the group and whether they thought that the group would fulfill its mission. They were also asked how favorably they felt about the company donating money to the nonprofit and what they thought of its reputation.

The researchers found that partnering with a nonprofit organization increased participants’ positive attitudes toward companies with weak reputations. For nonprofits, though, the biggest boost came from partnering with companies with strong reputations.

“[I]ncreased involvement by a strong-reputation company has a positive effect on consumer attitude toward a nonprofit by increasing perceived effectiveness of the nonprofit,” the researchers note. In other words, the higher-reputation company partners increased participants’ sense that the nonprofit could do its job well. “[N]onprofits are likely to increase consumer support as long as they increase their perceived ability to achieve their intended goal.”

Marketing Letters

Caglar Irmak, University of Georgia
Sankar Sen, Baruch College and CUNY
C. B. Bhattacharya, European School of Management and Technology, Berlin, Germany

Posted: December 16, 2015
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