When Donations Come Back to Haunt You

People walking on floors of building

Large donations by companies and family foundations provide the cornerstone for many prominent nonprofit organizations. But when those donations become shrouded in negative publicity, recipients must weigh their value against the damage to the organization’s own reputation.

A case in point is the wealthy and philanthropic Sackler family of Purdue Pharma, the maker of OxyContin. The recent deluge of opioid lawsuits is forcing a widespread reevaluation.

Several museums, including the Met’s Temple of Dendur, have been the targets of public protests with supposed overdose victims splayed on the ground surrounded by pill bottles and opioid prescriptions.

When public perception is at stake, does it matter whether the money came from illegal or controversial endeavors? Or is it just guilt by association? Either way, the optics are terrible.

 

How should an organization respond?

Quickly cut and run. While it’s good to distance yourself from a negative situation, doing so in haste can lead to mistakes and create liability.

Conduct a lengthy and thorough analysis before making a decision. A thorough investigation helps avoid mistakes. But by stretching out the controversy, you will have to endure a longer news cycle with all its negative consequences.

Quietly wait it out in hopes it’ll be over fast and not many people will notice. This is usually wishful thinking. To date, there have been 107,000 news stories about the Sackler family, opioids, and museums, and it isn’t over yet.

Once an organization decides to end its relationship, it has to decide how. Is it better to make a public display of the separation, to show it is unwilling to accept inappropriate or questionable behavior? Or should it discreetly remove the name, plaques, and other affiliations to allow the donor to save face and retain a sense of dignity?

Organizations such as the Smithsonian used this as an opportunity to conduct a thorough review of its policies. On Friday, the Guggenheim Museum in New  York announced it won’t accept future donations from the Sackler family. A day earlier, Tate Galleries, which operates some of Britain’s most prestigious art museums, issued a similar announcement.

Even hedge fund Hildene Capital Management recently shunned money from Perdue Pharma saying essentially, “Go away! We don’t want your billions.”

 

You can reach Roger Gillott and Eden Gillott directly at 310-396-8696.

Also, check out  A Board Member’s Guide to Crisis PR and A Lawyer’s Guide to Crisis PR (Second Edition) on Amazon.

 

FaviconInitialsGillott Communications is a Los Angeles-based public relations firm that specializes in high-stakes Crisis & Reputation Management with more than 50 years of expertise in strategic communications, corporate public relations, and working with the media.

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