Nonprofit organizations depend on public trust to generate revenue through donations, services and fees. When a scandal breaches this trust, it creates the risk of supporters and other stakeholders seeking to distance themselves from the organization. Unfortunately, the fallout isn’t limited to the affected organization; bad press surrounding a single nonprofit organization can impact the entire sector.
In some cases, a scandal can rob a nonprofit of as much as 3/4 of its annual donations, forcing layoffs and cuts to beneficial programs. In the worst cases, bad press has even resulted in organizations closing their doors. Consider the following examples.
The CEO of one charitable organization was accused of taking $1.6 million from company coffers for personal expenses. After the scandal broke, the organization raised less than a third of the funds it had raised the year before and lost a $50 contract to a competing charity. As a result of their lost revenue, the organization wasn’t able to service the community properly and was forced to lay off more than half of its workforce.
Another organization, focused on neighborhood safety and affordable housing, also made headlines when employees were caught on videotape offering advice on a possible prostitution ring and tax fraud. Though the legitimacy of the video recordings was called into question, the organization’s lack of public response led the media (as well as government and private investors) to take action. The nonprofit was forced to close its doors.
Finally, an organization with an otherwise stellar reputation faced scrutiny in 2014, when CBS News reported an inordinate increase in spending on meetings and conferences. Donors began to pull funding over allegations of misappropriation of funds, and the organization was even placed on Charity Navigator’s watch list. All told, the incident ended up costing the charity $200 million – and although their reputation has since recovered, this serves as an important lesson about the impact of bad press.
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How to respond to bad press after a crisis
Charities are much more vulnerable to negative press than for-profit businesses because they are marketing “trust,” and a breach of trust can’t be fixed by issuing a refund. Drafting a crisis response plan will help organizations mitigate damage to their reputation by establishing a communication framework.
Remember these five critical steps of crisis communications when responding to negative press:
1. Promptly issue a statement once you have the facts
A common mistake made by nonprofits is ignoring negative press in hopes that it will go away. While it may seem like discussing a crisis will perpetuate the impact, the opposite is actually true. The longer one waits to address the media about the problem, the more time the issue is left to fester. During that time you may actually ignite speculation around internal chaos and mismanagement, spawning additional negative articles that may not even be true.
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2. Be transparent and thorough about the issue
A close cousin of not responding to negative news is attempting to whitewash it by saying too little. Board members, donors and the media will be demanding answers and eventually, the entire truth will surface. Rather than opening the doors to further lost trust and scrutiny over accusations of a cover-up, it’s best to fully disclose all details about the crisis as soon as they’re known.
3. Show empathy and concern for the wronged parties
In addition to being prompt and transparent, a statement issued to the press must be empathetic to those impacted by the situation. Leadership must first apologize to those whom the organization promises to help and has let down, and second to the donors whose trust was broken. A statement that neglects to express concern for the wronged parties will cause even more damage to an already weakened relationship with the public.
4. Take responsibility for what happened
If they hope to regain donor trust, the CEO, executives and board must communicate that they are taking responsibility for the actions and missteps of the organization. That’s not to say these individuals must always step down, but leadership has to admit to any shortcomings and never attempt to blame others for internal problems that should have been avoided.
5. Describe appropriate action being taken
Perhaps the most important step toward earning back public trust is communicating that appropriate action is being taken to repair the damage and ensure it won’t happen again. While each situation is different, usually these steps include greater transparency and accountability coupled with leadership turnover. No matter what course of action is proposed, it must be substantial enough to send a strong message of accountability to the public.
After the Storm
Once the media storm has passed, you’ll need to begin cleaning up your reputation. While news outlets may no longer be writing fresh stories about your organization’s crisis, existing articles could stick around for years tarnishing your reputation and impacting financials. To help restore your charity’s image, you’ll need to aggressively publish fresh positive content to disassociate your charity from the past crisis.
Don’t overlook your executives’ reputations, either. If bad press about your team exists, you’ll need to improve their online presence to prevent further damage to your organization.
Leverage social media, blogs, press releases, and strategic partnerships to broadcast a more positive message about your nonprofit that will eventually overpower the negative narrative.
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