Investigating Stakeholders’ Reactions to Crises in the Nonprofit Sector Through the Lens of Social Identity Theory

ABSTRACT Social identity theory (SIT) suggests that organizations fulfill stakeholders’ psychological needs by meeting their self-definitional needs. Different crises may undermine such psychological fulfillment to varying degrees and lead stakeholders to react differently to the crises. This study examined the intersection of SIT and crisis communication in the context of social-cause-related nonprofit organizations (NPOs). It used the concept of identity threat to investigate whether a crisis is more detrimental when it directly compromises an NPO’s organizational identity and whether this effect varies depending on the stakeholders’ levels of social-cause involvement. Data were collected from 630 participants in an online between-subject experiment. As the study found, a crisis that directly compromises an NPO’s identity does more damage to stakeholders’ identification, attribution of responsibility, attitudes, and intentions of negative word-of-mouth than a crisis that does not. However, this effect of crisis types disappears among stakeholders with low social-cause involvement. Additionally, stakeholder-NPO identification mediates the interaction effects of crisis types and social-cause involvement on the attitudinal and intentional outcomes.