The Perceived Differences: The Sector Stereotype of Social Service Providers

Abstract

What difference does “nonprofitness” make is a fundamental question for nonprofit research. Although being held as the basic assumption of the contract failure theory, the sector difference perceived by individuals remains as an open question for multiple methodological problems. Here, we present evidence from three experiments for further empirical exploration of the perceived sector difference with improved research design. Our findings suggest a general pattern of sector stereotype: people perceive nonprofits as being warmer and slightly more competent than for-profits. More importantly, we show that such stereotypical understanding mainly results from people’s repugnance against profit-seeking intention instead of preferences toward nonprofits in the social service market. Such pattern differs slightly across three subareas being tested. Finally, we find more relevant information about the organization serves as a potential moderator that weakens the effect of being a nonprofit, which blurs the sector boundary in a given market.