Posts tagged ‘controversy’

September 13, 2013

$250 Million Gift to a Nonprofit is Withdrawn … Sort of

The news headlines were stunning:

Centre College Loses $250-Million Gift — Chronicle of Higher Education 

Centre College Loses $250 Million Gift After “Market Event” — Bloomberg 

Kentucky College Loses $250 Million Gift from Charitable Trust — Reuters 

There’s only one problem with the headlines: There never was a $250 million “gift” to Centre College!

Here are four lessons you can learn from this amazing public relations fiasco:

1. Do NOT mislead the public.

Perhaps the news media can be forgiven for getting the story wrong. After all, Centre College proudly announced on July 30, 2013: “Centre College receives historic gift to establish Brockman Scholars Program.” The official announcement began:

Centre College has received a gift of $250 million in the form of stock in Universal Computer Systems Holding, Inc. (Reynolds and Reynolds) from the A. Eugene Brockman Charitable Trust to establish the Brockman Scholars Program in Leadership and Entrepreneurship.”

Unfortunately, as recent events have demonstrated, the announcement was not just premature it was not true. The fact is that Centre College did not receive a $250 million gift. Peter Lattman, writing for Deal Book/ New York Times, quoted Centre College President John Roush as saying:

In retrospect, we might have put a big asterisk on this thing, but no one had any inkling that this would come about.”

The historic gift was a contingent pledge based on a complex recapitalization deal Centre College - Old Centregoing through. Regrettably, the financial deal blew up and, therefore, the gift never materialized, according to the College.

If the College had simply delayed announcing the gift until it actually materialized, it could have avoided enormous embarrassment. Alternatively, if the College had simply characterized the $250 million as a “pledge” or “potential gift” rather than a “gift,” it still could have avoided significant embarrassment.

2. Recognize the difference between a “pledge” and a “gift.”

Centre College had a contingent pledge for a $250 million gift. They never had the gift. It’s not a gift until you have the cash, stock, property, or irrevocable gift agreement in-hand.

Because the College never had a $250 million gift, it did not lose $250 million. That’s about the best that can be said of this situation. This is really just a case of a nonprofit organization publicly counting its chickens before they hatched. Don’t make the same mistake.

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February 3, 2012

Does Komen Have a Communications or Integrity Problem?

Oh no! It’s another week and two more major nonprofit organizations are in the news, for less than an ideal reason. The big news is the result of a controversial decision by one of the organizations.

On January 31, 2012, the Associated Press broke the news that the Susan G. Komen for the Cure Foundation is halting future funding for virtually all Planned Parenthood affiliates. The report states, “Komen spokeswoman Leslie Aun said the cutoff results from the charity’s newly adopted criteria barring grants to organizations that are under investigation by local, state or federal authorities. According to Komen, this applies to Planned Parenthood because it’s the focus of an inquiry launched by Rep. Cliff Stearns, R-Fla., seeking to determine whether public money was improperly spent on abortions.”

Komen did not issue a formal statement explaining the decision before the news media got hold of the story. Komen senior staff initially rejected interview requests after the story broke; it took until February 2 for Nancy Brinker, Komen’s Founder, to sit down for a major television interview. Also, it took until February 2 for Komen to post a formal statement (in the form of a video) on its website

Komen did not get out ahead of this story. It did not immediately respond to the story. Instead, Komen sat quietly while people expressed their anger and speculated about the decision on Facebook, Twitter, blog sites, and in the mainstream media.

Once Komen senior staff finally responded to the firestorm, they made matters worse by contradicting, without explanation, their spokesperson’s comment to the Associated Press. A Washington Post article found, “It’s now less clear why Planned Parenthood lost the Komen funding. Komen had initially told the Associated Press that Planned Parenthood could not receive funding because it was under government investigation. But today, in no uncertain terms, Thompson [Komen’s President] indicated that the decision actually had very little to do with an ongoing congressional probe.”

Komen clearly has a major communications problem. Regardless of where you stand on the abortion issue, the facts speak for themselves:

 

  • Komen did not proactively handle the situation by releasing the news itself. Had it done so, it could have more easily controlled the message.

 

  • Komen did not react quickly once the story became public. This allowed the controversy to fester and public frustration to build. Had Komen responded swiftly, it might have been able to ease the minds of a huge number of people around the country who are concerned that the move by Komen could negatively impact the health of thousands of women.

 

  • Komen did not get its story straight. It’s spokesperson gave one reason for the decision while the senior staff gave a completely different reason. The inconsistency encourages mistrust on the part of the public. It suggests that, at best, Komen staff are confused and/or sloppy. Or, at worst, it suggests that someone at Komen is not telling the truth. If Komen spoke with one, consistent, honest message, it could have engendered public trust rather than doing just the opposite.

 

For a comprehensive analysis of the Komen communications debacle, I encourage you to read the blog post from Kivi Leroux Miller at Kivi’s Nonprofit Communications Blog. The post includes videotaped news interviews with Komen and Planned Parenthood senior officials, sample Tweets, and a screen shot of the Planned Parenthood email appeal in response to the Komen decision. By the way, Planned Parenthood has done a brilliant job capitalizing on the controversy; I just hope the email appeal is truthful.

While Komen most definitely has some communications issues, it may suffer from an even greater problem: integrity:

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