Ignore This at Your Own Risk: Perception is Reality

Since it is a Presidential election year in the US, I thought I’d explore three recent news stories through the lens provided by or popularized by the late political super-strategist Lee Atwater:

Perception is reality.”

The three news items I want to address are:

  1. A possible scandal involving MSNBC and a congressional candidate.
  2. A drop in donations at the University of Missouri following campus protests.
  3. The termination of the Wounded Warrior Project leadership.

Together, these stories demonstrate the danger of ignoring and failing to manage public perceptions. Such a failure could cost your organization vital support.

MSNBC:

NBCUniversal, owner of the cable news and commentary network MSNBC, Holiding Up Leaning Tower of Pisa by BJ Carter via Flickrhas previously experienced scandal. NBC news anchor Brian Williams violated journalistic ethics, by falsifying parts of stories he covered, leading to his suspension. Following his suspension, NBCUniversal reassigned Williams to MSNBC in a greatly diminished role.

Now, Chris Matthews, host MSNBC’s Hardball, is at the center of what could become a new scandal.

As first reported on The Intercept blog, guests on Hardball have donated nearly $80,000 to the congressional campaign of Kathleen Matthews, Chris’ wife. This has raised questions about payola and full disclosure. According to the report about Chris and Kathleen Matthews:

Some of the guests made the donations after they were on the show — in some cases, long after. But in at least 11 of these cases, the Hardball guests appeared on the program after Kathleen Matthews announced her candidacy, and without any disclosure of the donations. And in at least three of those cases, the donations came within days of the MSNBC appearance.”

The investigative report raises the issue of payola. Were potential Hardball guests asked to contribute to Kathleen Matthews’ campaign as a quid pro quo for appearing on the program?

While we do not yet know whether there was any pay-to-play involved, The New York Post has already declared:

Chris Matthews at Center of NBC’s Latest News Scandal”

The Independent Journal Review headlined a story with:

There’s a Scandal Brewing at NBC News, and Chris Matthews Is Right in the Middle of It”

Again, we don’t know whether Chris Matthews has done anything wrong. However, for thousands of people, perhaps more, that might not really matter. They definitely have serious concerns. For its part, MSNBC has done nearly nothing to reassure the public about the network’s journalistic ethics. This has led to a MoveOn.org petition calling for the suspension of Chris Matthews, according to The Daily Caller:

A MoveOn.org petition demanding that MSNBC suspend Hardball host Chris Matthews has garnered just under 10,000 signatures, even as the network has refused to address what Huffington Post called a ‘clear conflict of interest.’”

It remains to be seen how this might affect donations to Kathleen Matthews’ political campaign or how it might affect voter attitudes. It also remains to be seen what impact this report might have on Chris Matthews’ future at MSNBC. However, one thing is certain, MSNBC’s near silence on the subject is raising the ire of thousands of people, if not more.

University of Missouri (Mizzou):

Simmering racial tension on the University of Missouri Columbia campus flared up in November during protests that captured national media attention. At one point, an associate professor yelled, “Who wants to help me get this reporter out of here? I need some muscle over here.” The targeted reporter was simply doing his job.

In the aftermath of the protests, the University system President and the Columbia campus Chancellor both resigned. Several months later, Mizzou terminated the associate professor mentioned above.

Now, we know from a report from KTVO-TV that the campus unrest has cost Mizzou millions of dollars in donations:

A University of Missouri official says about $2 million in donations have been lost in fallout from the Columbia campus unrest last fall. Vice Chancellor for Advancement Tom Hiles said Thursday that several donors who had pledged money to the university have pulled back their pledges.”

In addition to the fundraising fallout, Mizzou expects a sharp decline in student enrollment. FoxNews.com has reported:

Safe spaces may become empty spaces at the University of Missouri, where officials acknowledged an expected sharp decline in enrollment next fall is due at least in part to protests that rocked the campus last fall. The school is braced for a 25 percent drop in new students this coming fall, forcing the institution to enact painful budget cuts, as well as hiring and salary freezes. ‘We do know that the events of last fall have had an effect on our application numbers; however, it’s difficult to provide a specific number as we do not have any hard data,’ University of Missouri spokesman Christian Basi said in a statement to Foxnews.com.”

While Mizzou officials have attempted to address student, alumni, and public concerns, it’s clear that much more needs to be done to reverse the downward fundraising and admissions results. The situation on campus may or may not be better. However, the perception among many shows that public concern remains.

Wounded Warrior Project:

In January, a CBS investigative report accused the Wounded Warrior Project of “wasting donation money.” The report pointed out that the watchdog group Charity Navigator found that only 60 percent of the money donated to WWP went to program services for vets.

While some of the WWP expenditures involved lavish conferences for staff and travel, did the management team really do anything significantly inappropriate?

The NonprofitPRO blog has provided some excellent reports about WWP. In one report, the site shared information from WWP’s own internal investigation that refutes some of the findings of the CBS report.

On Fox News program The O’Reilly Factor on March 14, Anthony Odierno, WWP Board Chairman, said that the internal investigation found that 80 percent of donated funds went to program service, and that there was no stealing. Odierno continued by explaining why the Board terminated the CEO and COO:

They’re out because we felt it was the right decision for the Board…. The Board is acting in the best interest of the organization, and this is what we felt, that a change was necessary to get the focus back on programs and serving and doing what we do.”

While many believe that WWP is guilty of misspending donated funds, the WWP does not admit to any wrongdoing. Nevertheless, the organization has taken steps in an attempt to restore public confidence. WWP contracted an internal, independently conducted investigation. WWP says it will enhance policies, procedures, and staff training. WWP fired the CEO and COO.

Time will tell whether the efforts of the WWP will be sufficient to restore public confidence or whether its fundraising efforts will suffer.

From a fundraising and marketing perspective, reality does not always matter. What is of supreme importance are the perceptions of an organization’s leaders, the media, donors, and the public. Ideally, perceptions will be in alignment with reality. However, that’s not always the case.

Nonprofit organizations need to be aware of when reality and perception diverge from one another. Charities need to be prepared to manage the situation proactively and appropriately in order to restore confidence. Unlike fine wine, problems do not improve with age. Ignoring a problem or delaying action will only lead to bigger problems. Conversely, swift, decisive, appropriate, ethical action can mitigate or eliminate the risk of damage. Quick action can even lead to stronger fundraising results. Consider these two examples:

Planned Parenthood of America. This organization was accused of inappropriately, possibly illegally, selling fetal tissue. In the wake of the news stories, there were calls for Congress to defund the organization. Planned Parenthood took swift action to refute the stories. The result was that the organization was able to rally support resulting in an increase in donations and a continuation of Federal funding, at least for the time being.

Charities in Scotland. Several years ago, a cancer charity in Scotland was involved in a major scandal. Unfortunately, the fallout from that scandal negatively affected many unrelated charities throughout Scotland. Some charities reported a 30 percent downturn in contributions in the months following the controversy. To restore the public trust, Scotland’s charities and the Institute of Fundraising joined forces to get people meaningful information and provide them with assurance about the trustworthiness of the charity sector. Several months later, giving began to return to normal.

In short, addressing public concerns when they arise can mitigate damage and possibly even result in a net plus for organizations. By contrast, sticking our heads in the sand will not make the problem go away and can actually make the situation worse. It can be dangerous.

Finally, I want to mention that the best way to deal with a problem is to avoid it in the first place. Adhering to sound accounting practices, regularly training staff, and embracing a code of ethics as organizational policy (see the Association of Fundraising Professionals Code of Ethical Standards) are just some of the things your organization can do.

Remember, it’s not enough just to do the right thing. You also need all stakeholders to perceive that your organization is doing the right thing.

That’s what Michael Rosen says… What do you say?

UPDATE (August 25, 2016): When I wrote the above post, I reported that the University of Missouri was expecting a decline in enrollment this autumn, in part due to the negative publicity the school has received. Now, The Daily Caller is reporting that enrollment was dropped by 2,100 students resulting in a $30 million revenue shortfall.

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5 Responses to “Ignore This at Your Own Risk: Perception is Reality”

  1. Interesting case studies you have presented. Food for thought.

  2. I say–once again you’ve thoughtfully nudged us to consider a relevant topic of growing importance. Thank you for the eye-opening post. I encourage every nonprofit CEO to share w/all board members and create time on an upcoming agenda to discuss ‘What is the perception around us and what we do and how we do it?’ ‘What would we do if something negative happened [in or out of our control]-what will our response be?’ I will share your post!

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