Do reputational signals matter for nonprofit organizations? An experimental study

Purpose This paper aims to untangle the underlying mechanisms through which reputational signals promote stakeholders' intentions to donate in nonprofit organizations via stakeholder trust. Design/methodology/approach The authors apply a moderated mediation model using an experimental design with N = 248 business and public management students of France. Findings The results indicate that both a formal reputational signal (third-party certificate) and an informal reputational signal (self-proclaiming to be social entrepreneurial) affect stakeholder trust and intentions to donate. Stakeholder trust partially mediated the relationship between the formal signal and intentions to donate, and the mediation effect was stronger when an informal signal was present (vs. not present). Practical implications Trust is central to the exchange of nonprofit organizations and their external stakeholders. To enhance trust and supportive behavior toward nonprofit organizations, these organizations may consider using formal and informal reputational signaling within their marketing strategies. Originality/value This research highlights the pivotal role of formal and informal reputational signals for the enhancing stakeholders' trust and donation behavior in a nonprofit context.