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(How) Have You Handled Fundraising During a Scandal?

Wednesday, September 12th, 2012

These days, fundraising is a great challenge.  Stumbling blocks appear virtually everywhere.  Our donors have less to give, our mail campaigns cost more (and earn less) and there are more channels than ever to keep track of.

Only about half of US donors feel that nonprofits are doing “a good job” or better.  If we start out barely mediocre in the eyes of our supporters, there’s a long way to fall, then, when something goes wrong.

Just recently, several nonprofit and governmental organizations made national headlines for various scandals:  Komen, Penn State and the Secret Service, to name a few.

Not all scandals get an enormous amount of viral publicity, but since you are merely a participant in social media – and no longer control what information is disbursed – it is essential to have a plan in place.  And not just a plan that a few key people in leadership are aware of, but something specific known to everyone on staff.

The Trust Report demonstrates some unflattering figures about how the US public feels toward the ethical conduct of charities, such as “26% of Americans admit . . . they don’t trust charities.”  The report goes on to say that “the majority (57%) explained that this was because they did not know how donation money is spent.”

Unfortunately, stories that make the news contribute to this lack of trust:

•   California State parks hid $54 million surplus, while trying to close 70 parks & asked for budget increase

•   Fake nonprofit is a shell corporation for “Chinese Luxury Market”

•   Healthcare company preys upon the uninsured, injured with undercover debt collectors in ERs

The Trust Report points out that communication with constituents is essential, however.  The more that people feel knowledgeable about what your organization does, the less likely they are to feel taken advantage of after having made a gift.  Transparency is key.

Certainly, even when there is no wrongdoing, such as theft, embezzlement, etc., a scandal – and backlash – can occur, simply because of a communication breakdown.

This is what happened with the Red Cross shortly after September 11, in 2001.  Scores of people offered an unprecedented outpouring of generosity, intending to help the victims of 9-11 and their families.

What happened after those donations were made was that the Red Cross diverted some of the funds toward other disaster relief, as they have often done in the past.  (High profile disasters often get more contributions than those in lesser known or less populated areas, but they still need funds, too.)

The response to this was extremely negative, however, and the Red Cross had a great deal of back pedaling, explaining, and, eventually, bookkeeping to do.  They moved the funds back, due to the public response.

In fact, the Red Cross hadn’t intended to be dishonest, misleading – or even change their policy – but they weren’t transparent enough ahead of time so that everyone understood what was going to happen.  Therefore, people felt betrayed, or somehow cheated.

Filling out your organization’s profile as completely as possible on Guidestar and/or Charity Navigator is advisable, because independent ratings and assessments are looked upon favorably.  Many donors will search these types of sites when deciding whether – and how much – to give.

It’s not enough to be listed, but make certain that what you post on your site and others can be easily understood.  Nobody wants to pore over an hour of documentation, or click incessantly, just to find a few things.  (What does my gift of $X help accomplish?)

If you have put these things in place ahead of time, then when (if) a scandal does strike, it might sting less and last a shorter while because you were prepared with a battle plan.  The worst thing to do is nothing.  Pretending it doesn’t exist and hoping it will go away only confirms the suspicion that your organization is terribly unprofessional.

And, once in a while, there is the rare occasion that a great fundraiser can be borne out of a scandal.  This is definitely an example of making lemonade out of lemons!

Do you have any stories of how you handled a crisis at your organization?  Feel free to share in the comments below.

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