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AbstractNon‐profit organisations operate with the advantage of a generally positive social image. Workers and managerial employees of nonprofits are commonly thought of as altruistic, trustworthy and respectable actors who assist their communities. However, the non‐profit sector has faced several notable scandals and crises that have tested this positive social image. This paper reports on an analysis of the positive social image, which we call a sector 'halo' and its durability in the face of organisational crisis. Based on a sample from Amazon's Mechanical Turk, the analysis confirms the general positive social image of non‐profit organisations when compared to their private for‐profit and government sector peers, who possess lower levels of trust. However, a survey experiment reveals that given a crisis scenario regarding a data breach incident, the 'halo' entirely disappears. Our study improves on the literature regarding trust and organisational reputation and highlights the importance of sector ownership and perceived differences pre‐ and postcrisis.

The purpose of our study is to broaden the investigation of nonprofit misconduct beyond financial fraud perpetrated by individual actors and to identify structural features that are more or less likely to be associated with actual misconduct. We utilize the Charity Navigator Advisory System and related press releases to identify 215 nonprofit organizations with confirmed or alleged misconduct. We also collect the IRS Form 990 information for 133 out of the 215 organizations with known misconduct and 150 organizations without known misconduct to compare their accountability structures. Our findings suggest that, while financial fraud committed by individual perpetrators against their organizations is the most frequently identified type of misconduct, a substantial number of other types of misbehaviors also commonly occur. Our comparison analysis indicates that organizations with known misconduct deviate significantly from scandal-free charities in several structural aspects.