Comparing the Effectiveness of Post-Scandal Apologies From Nonprofit and Commercial Organizations: An Extension of the Moral Disillusionment Model

Abstract

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”). However, previous research—focused on commercial organizations—has sometimes shown that a positive reputation can insure organizations against the negative effects of scandals. In light of this, 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 (combined N = 805), considering responses to sexual exploitation and fraud scandals, replicated and extended the moral disillusionment effect. Trust and consumer support were partially restored following an apology (and even a statement acknowledging the scandal without apologizing), but the rate of repair was the same for nonprofits and commercial organizations. Nonprofit managers should therefore implement internal controls to prevent violations and issue public responses when scandals emerge.