Many proponents of diversity stress that diversity is good—good for universities to further their educational missions and good for businesses, for hiring talent and generating financial returns to shareholders. In this work, we examined costs of framing diversity as good for organizations vs. fair; specifically, we examined whether framing diversity as good for organizations broadens people's definitions of diversity and increases racial bias. In Study 1, White participants preferred the “diversity as good for organizations” frame and believed it to be effective at promoting diversity. In Studies 2–5, White participants presented with the “diversity is good for organizations” frame broadened their definitions of diversity (Studies 2–5) and deprioritized a qualified Black applicant (Studies 4 and 5). Participants low in resources were especially likely to deprioritize the Black applicant (Study 5). This latter finding led us to investigate the motivated nature of diversity frames. In a final study, we found that participants whose resources were threatened favored the “diversity is good for organizations” frame and devalued the “diversity is fair” frame (Study 6). These studies demonstrate that a well‐intentioned plea to promote diversity (“diversity is good for organizations”) has costs; it can lead to the deprioritization of qualified Black applicants.