Posts tagged ‘crisis management’

September 14, 2018

Lions, Tigers and Bears, Oh My: Fundraising in Times of Crisis

As I’m writing this, Hurricane Florence is barreling toward North Carolina. Watching the news reports, I’m reminded that the best way to weather a storm is to prepare before one strikes. The tragic situation in the southeastern US can serve as a metaphor for coping with any type of crisis, even for the nonprofit sector.

The best way to deal with a crisis is to prepare for one before one strikes. 

Guest blogger Sophie W. Penney, PhD is a big believer in that axiom. Sophie is President of i5 Fundraising and Senior Program Coordinator/Lecturer for the Penn State University Certificate Program in Fundraising Leadership. As the co-editor and chapter author of the soon-to-be-released book, Student Affairs Fundraising, Raising Funds to Raise the Bar, Sophie will be sharing her insights at the CT Alliance 2018 Conference on October 2, 2018 where she will present a session about leading through challenging times, Lions, Tigers and Bears: Leading Through Crisis.

A crisis can affect any type of organization. The nonprofit sector is not immune. As I point out in “What is the Most Important Thing You Can Learn from Recent Nonprofit Scandals?” there are three broad types of scandals or crises: 1) self-inflicted scandals beyond your control, 2) self-inflicted scandals you could have avoided, and 3) guilt-by-similarity scandal.

I’m grateful to Sophie for her willingness to share with us a few tidbits from her upcoming presentation that will help us all become better prepared to weather any scandal or crisis as we continue to strive to raise more money:

 

Michael Rosen’s recent blog post, “The Dark Side of the Fundraising Profession,” was a clarion call to fundraisers. The piece served as a reminder that a profession designed to bring joy and result in great good can be fraught with challenges.

Fundraisers are pressed to raise ever-larger sums (and the sooner the better); as a result, it can be compelling to focus on fundraising tips, tools, and techniques that will bring in ever-bigger dollars. Yet a crisis, particularly legal or ethical in nature, can derail fundraising not only for a fiscal year, but for far longer.

Fundraising in times of crisis hit home for me in 2011 with the advent of the Jerry Sandusky Scandal. This child sexual abuse scandal toppled the Penn State University President, resulted in the abrupt firing of the University’s revered football coach, led to the sale of a nonprofit founded to serve the very types of children who became victims, and rocked a small community previously known as “Happy Valley.” What’s more, the scandal came to light in the midst of the University’s billion-dollar capital campaign, which was on the verge of going into a public phase. Yet, the Sandusky Scandal is just one of many such crises to rock the nonprofit world:

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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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