Archive for ‘Uncategorized’

August 24, 2018

What is the Most Important Thing You Can Learn from Recent Nonprofit Scandals?

Recent incidents at Michigan State University, The Ohio State University, Oxfam Great Britain, The Presidents Club Charitable Trust, Silicon Valley Community Foundation, and elsewhere remind us that the nonprofit sector is not immune to wrongdoing and scandal.

If you’ve never worked for a charity reeling from scandal, there’s a good chance you will one day. Even if you don’t work directly for a scandalized charity, you could still be affected by a loss of public trust if a similar nonprofit finds itself under the spotlight for misdeeds.

For those reasons, it is essential that you learn the most important thing about how to survive a scandal.

Three broad types of scandals can affect a nonprofit organization negatively:

1. Self-inflicted scandals beyond your control. Here’s an example of a situation that was beyond the control of fundraising staff. Oxfam Great Britain was banned from operating in Haiti and the organization’s country director was forced to resign following allegations of inappropriate sexual behavior. Four other employees were fired for “gross misconduct.” While the frontline fundraising staff was not at all involved in the scandal itself, they nevertheless had to deal with the aftermath.

2. Self-inflicted scandals you could have avoided. We saw this when the Ohio Attorney General’s Office accused the charity Cops for Kids of defrauding donors of $4.2 million. Of all the money it raised over a 10-year-period, the charity spent less than two percent on charitable programming. This scandal allegedly involved fundraising staff as well as senior staff engaging in fraudulent behavior. The solution to this type of scandal is simple: Do not misbehave. Obey the law and adhere to the Association of Fundraising Professionals Code of Ethical Standards, the International Statement of Ethical Principles in Fundraising, and/or your nation’s own fundraising code of ethics.

3. Guilt-by-similarity scandal. People in Scotland experienced this several years ago. A cancer charity was embroiled in a well-publicized scandal. As expected, that charity saw a sharp decline in contributions. However, there was also an unpleasant, broad side effect. Completely unaffiliated cancer charities in Scotland also experienced a deep drop in donations resulting from broad public mistrust of all cancer charities. It took the innocent charities nearly a year to recover even with a coordinated campaign to restore public confidence.

Other than avoiding problems in the first place, always a good idea, what can you and your organization do to ensure it can survive a crisis or scandal?

The answer is simple, though the execution is not: Build strong relationships with donors. It takes effort, financial resources, and time. However, it’s an investment well worth making.

Recently, a reporter for The Columbus Dispatch contacted me. Rob Oller sought my commentary about the scandal involving Urban Meyer, The Ohio State University football coach. You can read about the situation on your own since there’s no need for me to get into the details here. Suffice to say that the coach has received a three-game suspension, but not before Bob Evans Restaurants withdrew its corporate sponsorship of Ohio State football.

Oller asked me about how scandal affects charitable giving. I told him, “It depends on the institution and quality of the relationships with its donors over time. The stronger the relationships the more likely the institution is able to weather the controversy.”

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November 10, 2016

I Have a Quick Question for You

NOTE: The poll has closed. Because 75 percent of respondents want me to share my thoughts about the election’s impact on philanthropy, I will do so in the coming days. While the poll is now closed, you can still leave a comment below.

 

Much is being written about the potential impact of the election results on philanthropy. Much of what has been written already has been partisan and/or emotional and/or negative. So far, I have refrained from adding my voice. I’ve figured there’s already a lot being said out there, and that you might be tired of the subject already. Or, you just generally might be tired of hearing about the election itself.

However, some people have asked me my thoughts about the future of philanthropy.

Now, I’m going to leave it up to you. Please respond to the anonymous poll question below. If 75 percent of my readers want me to address the subject, I will. Otherwise, I’ll move on and write about other important issues. By the way, this is a flash poll that will end this Sunday night.

Thank you for your guidance!

If you have any particular questions you’d like me to address, please comment below or contact me privately.

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

July 28, 2015

Lawsuit Seeks to Win $5 Million on Donor’s Pledge

The St. John’s Health Center Foundation, which supports the hospital of the same name in Santa Monica, CA, has filed a lawsuit to collect $5 million that Paula Kent Meehan had pledged.

The legal action raises questions about whether charities can and should sue to collect on unfilled pledges.

Giant Gavel by Sam Howzit via FlickrMeehan made her fortune after founding the Redken hair-care products company in the 1960s. In 2007, she made the pledge to St. John’s, according to a report in the Los Angeles Times. Rather than simply including St. John’s in her will (a revocable gift commitment), Meehan also signed an “estate pledge commitment” that said her pledge would be “legally binding on me and my heirs, executors, administrators, personal representatives and assigns.”

In recognition of the irrevocable gift commitment, the Foundation planted a tree in Meehan’s honor and placed her name on a donor wall in the lobby of the hospital.

Unfortunately, “in 2013, Meehan revoked her pledge to the St. John’s Foundation after the ouster of the hospital’s top executives and the proposed sale of the nonprofit Catholic hospital,” says the Times report. When Meehan died last year, the Foundation contacted Meehan’s representatives to seek fulfillment of the pledge. When they refused to pay, “the Foundation sued the executors of her estate for breach of contract for $5 million.”

Let’s look at three of the obvious questions this case raises:

1. Can a nonprofit organization sue a donor?

The answer to this question is simple: Yes. The St. John’s Foundation has already done just that. Pledges, whether verbal or written, are contracts that can be enforced under the rules of contract law.

2. Can the Foundation win its lawsuit?

To answer this question, we would need more information. For example, we do not know the complete and precise language of the estate pledge commitment. The commitment might have been conditional allowing Meehan to change her mind if certain conditions were not met. Or, the commitment might have been ironclad without any provision for altering its terms. Undoubtedly, this will be one of the key issues decided by the Los Angeles County Superior Court.

3. Should a charity sue one of its donors?

This is the most challenging question. Clearly, the St. John’s Foundation believes it should. However, just because a charity can sue a donor does not necessarily mean it should.

Filing a lawsuit against a donor could dissuade others from making a pledge commitment or giving at all.

“‘From a practical or public relations perspective, I couldn’t imagine a worse strategy,’ said Doug White, director of the master’s in fundraising management program at Columbia University. ‘This is not the way an organization should behave with a donor. It sends a very bad message,’” reports the Times.

On the other hand, Howie Pearson, a Stanford University attorney and professor of estate planning at its law school, told the Times, “The charity is caught: On the one hand, you want to be donor friendly; on the other hand, the charity does have a fiduciary obligation to protect its assets.”

The St. John’s Foundation lawsuit isn’t just a messy situation for that particular organization. The public relations fallout from it could affect other charities working with philanthropists who might get cold feet as a result.

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May 25, 2012

Updates to 8 Popular Posts

As I sit down to write my latest blog post, we in the United States are headed into a holiday weekend and the unofficial start to the summer season. So, I thought I would mark the occasion by doing something a bit different here. I’m going to look back on some of my more popular blog posts and share some updated information with you. 

But, before we get to the updates, I do want to directly acknowledge the holiday. In the US, it’s Memorial Day. This holiday commemorates the ultimate sacrifice made by over one million men and women who gave their lives in service to the nation. I hope you’ll take a few moments to remember them and to check-out my post: “Philanthropy and the Spirit of Memorial Day.”

Now, on to the updates:

“Garth Brooks Sues Hospital for Return of a $500,000 Gift”

Garth Brooks recently won his lawsuit against Integris Canadian Valley Regional Hospital. A jury awarded the country-music legend $1 million that includes the return of his $500,000 donation as well as $500,000 in punitive damages. The jury decided in favor of Brooks saying the “Hospital defrauded him by accepting a $500,000 donation and failing to honor his request to name a building for his late mother,” according to a report in The Chicago Tribune.

Fortunately, the experience with Integris has not dampened Brooks’ philanthropic spirit. Earlier this month, the singer along with Troy Aikman dedicated the new Child Life Zone at Cook Children’s Medical Center in Fort Worth, TX. The project was partially funded through Brooks’ Teammates Foundation. You can learn more about the Child Life Zone in an article and video at the WFAA-TV website.

 

“10 Essential Tips to Protect Children from Real Monsters”

In recognition of Child Abuse Prevention Month in April, I wrote a blog piece that contained 10 tips for protecting children from sexual abuse. Child sex abuse impacts one in six boys, and one in four girls in the US; it’s a crime that is blind to race, religion, or economic status.

I was hoping that this post would become my most widely read post to date. At this point, I can report that this post is currently my fifth most read. With your help, perhaps it will reach number-one in the coming weeks.

I recently heard from a state sex-offender registrar who requested permission to post my article on the state’s website. I appreciate the request, and granted permission. If you would like to post the article on your website, please contact me for authorization.

 

“Does CFRE Have a Future?”

Since I wrote this blog post, I did follow through and apply for my recertification. I’ve been a CFRE since 1994, which makes me one of the old-timers on the CFRE roster. While I have applied for renewal, I still have grave concerns about the future of the credential. However, CFRE International offers a ray of hope with its current strategic planning process that has included a survey of current CFRE-holders.

After I originally posted my commentary, CFRE International hired a new President and CEO. Eva E. Aldrich, MA, CFRE took the reins in February 2012. You can read more about the transition at the CFRE International website.

 

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January 31, 2011

Hello, world!

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Welcome to Michael Rosen Says…, my little corner of the blogosphere! To learn more about my blog, please take a few moments to visit my “About” page. I also encourage you to sign-up for an email subscription so you’ll be notified whenever I post something new, usually about once per week. Finally, I encourage you to provide your feedback and share your wisdom and insights. Let’s have fun while doing a bit of good!

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