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Rebuilding a Damaged Reputation

By Kate Golden on March 9, 2007No Comment

Following revelations that founder Ted Haggard bought drugs from a male prostitute – with whom he also admitted to “sexual immorality” – the New Life Church in Colorado Springs has experienced a sharp dip in donations.  According to the Denver Post, church income has been down about ten percent; as a result, the megachurch has laid off 44 employees. 

This is not the first time a betrayed public has responded by rescinding or suspending their donations.

In 1990, after allegations of sexual misconduct became public, the Rev. Bruce Ritter resigned from Covenant House, the childcare agency he founded in 1972.  The charity experienced a $22 million drop in donations in one year, and reduced staff in New York by almost half.  Its debt climbed to $38 million.  Rebuilding its shattered reputation was a hard and painful process.  Sister Mary Rose McGeady is credited with helping the agency to restore its credibility; three years after the scandal broke, the charity had regained approximately 80% of its donors.

In 2004, after former leader Oral Suer pleaded guilty to defrauding the United Way of the National Capital Area of nearly $500,000, the chapter experienced a significant decline in its annual fundraising drive and was forced to lay off over half its work force and close several regional offices.  The Chief Executive said at the time that the damage Suer inflicted was “incalculable.”  In 2006, the Chief Financial Officer, as well as the Marketing and Communications Chief, resigned over frustrations that the charity was exaggerating its fundraising totals.  The Washington Post reported that “despite its cheery public announcements, the charity has failed to pull itself out of the fundraising nosedive that started three years ago after a spending scandal.”

There is, of course, no way to prepare for a scandal of any kind.  But nonprofits maintain a certain air of decency in the minds of those who have become disillusioned with the avarice of corporate America.  Nonprofit institutions, after all, exist to help others, and those that devote their lives to the public sector do not often see the financial rewards of their for-profit counterparts.  So it is particularly disheartening when that air of decency is eroded; the public feels taken advantage of – stabbed in the back by the scrappy, affable neighbor.  When a nonprofit’s reputation is damaged, it can take years to regain the public’s trust.                   

Only time will tell if the New Life Church will regain those Haggard’s behavior turned away.

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