Current Culture Requires Nonprofits to Step up Their Crisis Preparation

If anyone doubted that corporate culture matters, just ask any of half a dozen companies whose reputations were damaged in recent years due to their toxic cultures. Wells Fargo, Deutsche Bank and Boeing top the list. Any number of news organizations follow them.

More intriguing, however, is the number of nonprofit and donation-based organizations that have so much more to lose when their scandals are splashed over local headlines.

The problem is twofold: there is an assumption that nonprofits are culturally nicer than big corporations (they aren’t always) and there’s a relative lack of preparedness when bad news hits.

It’s one thing for a fossil fuel executive to gloat over corporate profits when people outside the boardroom were freezing to death. Such talk is expected in earnings calls, although someone might have considered the optics before releasing the final script. You can almost dismiss as totally clueless a top-level nonprofit executive flying overseas so he could cut the COVID-19 vaccine line. Almost.

Fierce Blowback

But when organizations that we imagine are ‘better than that’ are caught misbehaving, the backlash is fiercer and headlines more frequent.

Clearly, the Indianapolis Museum of Art and The Lincoln Project are organizations that had culture problems. Their problems, though, remained hidden behind a veneer of silence and perceived good deeds.

So, when scandals surfaced that revealed the depth of problems beneath that veneer, they became major stories.

The facts of the cases certainly fueled some of the negative press. But we might also argue that large organizations, like Wells Fargo, Deutsche Bank, Boeing and Comstock, are better prepared. They employ teams of crisis experts and risk-management professionals who are prepping constantly for the next dump of negative news.

Traditionally, most nonprofits and start-ups haven’t had the need or resources to invest in risk assessment and crisis planning–until everyone with a mobile phone and a story to tell can make mincemeat of their reputations.

Nonprofits may not suffer the immediate impact of a plummeting stock price or calls for a boycott or regulation that public companies often endure. However, the long-term fallout may be even more damaging.

Frequently, a nonprofit crisis provides the perfect opportunity to air the dirty laundry hidden under the veneer of a charitable organization doing good. Once the sacred cow is wounded, disgruntled employees, donors and anyone else with an axe to grind can’t wait to jump in and tell their sides of the story.

The lesson for nonprofits: You are just as vulnerable, if not more so, than for-profit organizations and you need to prepare accordingly.

Newfields (Indianapolis Museum of Art)

When news of the wording in a job description for a director for Newfields broke, the immediate reaction was incredulity.

At a time when diversity and inclusion are top of mind after a year of protests in the streets against racism and a disturbing rise in white supremacy, the fact that a prestigious museum wanted someone who could “attract a broader and more diverse audience while maintaining the Museum’s traditional, core, white art audience,” sparked outrage around the world.

In reality it was one sentence in a six-page job description. In addition, the author was M/Oppenheim, the museum’s executive search firm. The fact that the verbiage was a true-and-honest description of what Newfields was seeking didn’t help. Newfields’s apology the next day didn’t help either. The posting and apology highlighted a larger issue: A lack of diversity in the museum and art world.

More damaging however, is that the story brought to light far more serious and systemic issues at Newfields that kept the crisis simmering for far longer than one sentence in a job description normally would.

Some 200 local and national leaders in the art and cultural community demanded the Newfields’s president’s resignation, as did an open letter from the staff decrying the lack of effort to address racial equality at the museum.

The next day, president Charles Venable was gone. But it will be years before Newfields can rebuild fully its reputation with artists, donors and employees, who took the brunt of management’s attitude.

The Lincoln Project

When The Lincoln Project (TLP) launched in late 2019, Democrats and Never Trumpers hailed it as a savior of sorts. It was a collection of very experienced, savvy Republican campaign professionals dedicated to ensuring that Donald Trump would not serve a second term. It quickly attracted a following and some substantial contributors, raising $90 million for its efforts.

Disaffected Republicans and admiring Democrats praised its ads, which were impactful, clever and highly shareable. Whether TLP’s efforts to get under Trump’s skin actually contributed to his defeat ultimately is unknown and probably unknowable.

But before TLP even got a chance to bask in the incumbent president’s defeat, scandal began to engulf the organization.

John Weaver, one of its founders, was accused of sexually harassing young gay men. Ultimately, he admitted that for years he was a closeted gay male.

More troubling questions were raised about when other TLP leaders knew about Weaver’s actions as well as allegations that more than half of what the organization raised made its way into the founders’ pockets.

After initially denying knowledge of Weaver’s actions, evidence surfaced that leaders of the group knew in June 2020 of Weaver’s behavior.

One prominent member, Jennifer Horn, left the group after the Weaver allegations surfaced. Another founder, veteran Republican strategist Steve Schmidt, left after it was revealed that he posted without permission a private conversation between Horn and a reporter. Additional stories continue to surface about the toxic culture of the group.

TLP hired a law firm to investigate and report on the Weaver allegations. There are questions, though, about the law firm as members of it apparently donated to TLP.

Unlike Newfields, however, The Lincoln Project has no shortage of enemies, all of whom hope the scandal ensures its demise. Trump supporters, as well as others who simply find the group’s political actions reprehensible, are lining up to ensure that the negative press persists, posing an interesting communication conundrum for those left at TLP.

 

The Lincoln Project
Criteria	Grade	Comments	Advice
Extent of coverage	F	Given how much attention it tried to attract for the past year and a half, it isn’t surprising at all that The Lincoln Project’s troubles have gotten an inordinate amount of coverage.	When you are making brilliant ads and ensuring that they get widely shared on social media, and you are talked about incessantly on the news, don’t be surprised if you find yourself in the crosshairs of an investigative reporter, or the subject of some very uncomfortable leaks. Remember, part of a reporter’s job is to afflict the comfortable.
Effectiveness of spokespeople	D	The fact that its chief spokesperson resigned in the middle of a crisis did not bode well for the organization–especially after revelations that senior leaders knew about Weaver’s activities seven months before they were made public. As a result, there was no spokesperson, just leaks and comments from everywhere.	It never sends a good message when your chief spokesperson resigns in the middle of a crisis. Unless you have another one waiting in the wings, chances are the media will reach out to anyone it can find and use any quotes it can get. In other words, your narrative is gone.
Communication of key messages	F	There was no consistent messaging, just people acting surprised and appalled at the allegations and then ducking for cover when proof surfaced that you knew what was going on months ago. The only effective positive message came from a Twitter thread from an employee who articulated what should have been the key message all along: The bulk of staff were unaware of Weaver’s activities and believed fervently in the organization’s mission.	There is no faster way to lose trust from the media, or your stakeholders, than to lie or withhold information.
Management of negative messages	F	Negative messages are coming from everywhere, amplified by enemies no doubt, but also filling a vacuum.	Nature, and journalists, abhors a vacuum. When you have no spokesperson or consistent messaging, negative messages are all that will surface.
Impact on donors	D	It’s a credit to TLP’s relationships with its donors that so far there has been no public reporting that backers are fleeing or asking for refunds. They all seem to be waiting to hear the findings of the independent audit.	Often, deep, long-standing relationships can withstand a crisis. You need to foster those relationships and measure their strength regularly to ensure that those involved will stand by you if, and when, a crisis hits.
Impact on employees	D	Employees have indicated sadness, distress and horror over the allegations. Whether or not they abandon ship will depend on the results of the investigation and their job prospects going forward.	When a cultural crisis hits the news, employees probably have dealt with its consequences for months, if not years. Are they more upset when their employer is front-page news? Sure. Are they going to quit over news reports about something they’ve known to be true forever? It depends on their job prospects.
Overall Score	D-	Like any political operation, The Lincoln Project was a pressure cooker. Its founders were strong, opinionated people. So, no one should be surprised that a culture crisis occurred. The question is, can whoever is left behind find the wherewithal to rebuild trust with supporters and employees?	Culture is created at the top and is baked into the founding principles of any organization–in for-profit and nonprofit groups. So if, or when, that culture crisis hits, be prepared to change leadership quickly and find credible alternatives to lead the organization out of crisis.

 

Newfields
Criteria	Grade	Comments	Advice
Extent of coverage	F	When a local art museum in a mid-size American city makes headlines in a UK paper, you know it’s bad.  The egregious wording shocked the art world, and subsequent revelations of foot dragging on racial equity issues, caused the news to last for weeks.	If you expect to survive in 2021, you better be quick to act to fix racial equity issues within your organization.
Effectiveness of spokespeople	F	Unfortunately, ex-employees proved to be much better spokespeople for the museum than the president. What made the crisis worse was President Venable’s assertion to the New York Times that the wording was intentional; he wanted to keep the museum’s white audience. His statement reinforced perceptions of exclusivity and racism at the top of the museum. The apology from the Board of Trustees and Governors was welcome, but they should have spoken initially, not the person who caused the crisis in the first place.	When it comes to racism in your ranks, do NOT double down, no matter who thinks it’s a good idea. Put anti-racists in charge and whatever you do, don’t fire or lay off the people you hired to increase diversity.
Communication of key messages	F	Because Newfields officials declined to comment, the only message the museum effectively communicated was that its employment practices weren’t very inclusive. Unfortunately, employees and ex-employees proved to be far more articulate in communicating key messages.	In crises involving leadership, it’s going to be hard to get messages across if the leader is at fault and the board has supported that leader for years. The only thing that will make a promise to change seem authentic is swift action on several fronts.
Management of negative messages	F	The terrible, horrible job description only revealed the tip of the iceberg. An absence of diversity was a long-standing problem at the museum, so negative messages proliferated once word got out. There were plenty of ex-employees to help fan the flames.	Make sure you have a plan to deal with former employees who will be only too ready to amplify the negative positioning that will follow revelations of cultural problems.
Impact on donors	D	While there is no evidence that donors have withdrawn support, numerous local supporters signed the letter calling for Venable’s resignation.	For nonprofits, the biggest threat from a crisis is the loss of foundation and donor support. Your crisis communication plan should include direct outreach to major donors and foundations in the event that any hint of scandal is in the air. If you have support from a major foundation, as Newfields has from the Lily Foundation, you need to be completely transparent with it during a crisis, or its trust, as well as its funding, will evaporate.
Impact on employees	F	The letter from employees calling for Venable’s resignation is a good indicator that things were bad before the crisis and were only getting worse.	Many, if not most, people work for nonprofits because they believe in the cause behind it. If your crisis causes employees to lose faith in  the organization’s commitment to the cause, they probably won’t stick around unless change is swift.
Overall Score	F	Judging from the response in Indianapolis, as well as the larger art world, there is little doubt in anyone’s mind that Newfields’ culture, and Venable in particular, brought on the crisis. The fact that the institution and its supporters seem to have been taken by surprise by the extent of the crisis, reveals far larger problems with the museum’s culture.	Public image and marketing can cover up cultural problems for only so long. If you want to avoid a crisis caused by racism and/or lack of diversity, fix the problem first and craft a really good crisis communication plan immediately.