To profit or not to profit? The role of greed perceptions in consumer support for social ventures

Abstract

An increasing number of social ventures are for-profit companies (i.e., forprofit social ventures) that seek to advance a social cause while making a profit. In a series of seven studies, this research investigates consumer support for organizations as a function of their social mission and profit orientation. The impact of profit orientation on consumer support depends on the prominence of the organization's social mission. For organizations with a prominent social mission, profits are interpreted as a signal of greed; absent a prominent social mission, a for-profit orientation can instead imply greater competence. As a result, consumer support of for-profit social ventures suffers in comparison to both nonprofits and traditional for-profits-a downside to the organizational benefits of for-profit social ventures identified in prior research. In addition, this research investigates organizational factors-including excessive organizational spending, profit perceptions, and operational efficiency cues-that alter greed perceptions and consequently support for for-profit social ventures. Together, this research sheds light on consumer reaction to organizations that support social causes, with implications for the social venture marketplace, including the nonprofit versus for-profit quandary faced by social entrepreneurs.