Abstract

Should an organization make all efforts to appear perfect? We characterize weaknesses of organizations to better understand whether acknowledging the negative can help organizations to reach their goals. We test experimentally whether the acknowledgment of a weakness by an environmental non-profit organization (NPO) improves its perceived honesty, efficiency and trustworthiness, and donations by anonymous contributors. Using hypothetical decisions, Study 1 shows that acknowledging a default led to higher perceptions of organization’s honesty, efficiency, and trustworthiness. Using monetary incentives, Study 2 supports the positive impact of acknowledging a default on donations. Participants donated more money to the organization that acknowledged a reasonable default We discuss the different types of defaults and the conditions under which they may help to establish a more positive image along with greater monetary support.