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ARC: WHAT COMPANIES NEED TO KNOW TO PROTECT THEMSELVES FROM REPUTATION RISKS

Livestrong offers lesson in mitigating celebrity risks

Photo by Bloomberg Over the course of the last decade, Livestrong has taken steps to separate itself from the organization's original founder, Lance Armstrong.

While Austin, Texas-based Livestrong faces challenges as it navigates its relationship with Lance Armstrong, steps it's taken over the past several years ultimately might demonstrate how a nonprofit can manage risks associated with a celebrity benefactor, experts say.

“Livestrong has been separating itself from Lance Armstrong for more than a decade,” including its rebranding as Livestrong in 2003, said Leslie Lenkowsky, clinical professor of public affairs and philanthropic studies in the School of Public & Environmental Affairs of Indiana University in Bloomington, Ind.

Over the past decade, the organization that started in 1997 also has built an expert staff, created a nationally known board independent of Mr. Armstrong, formed partnerships with leading anti-cancer organizations, and established many local chapters.

“Most important of all at this time is they have a very diversified revenue stream,” Mr. Lenkowsky said.

“Livestrong is the exception,” Mr. Lenkowsky said. “The truth of the matter is most celebrity philanthropies will not have done what Livestrong has done.”

“It's always hardest when the charity has been driven more by celebrity interests,” said Katherina M. Rosqueta, executive director of the Center for High Impact Philanthropy in the School of Social Policy & Practice at the University of Pennsylvania in Philadelphia. “Celebrities can raise the public profile of an issue or an organization but when it actually comes to bringing resources to support an organization's work it often comes from peers supporting one another.”

To survive a celebrity benefactor's “fall from grace,” a charitable organization needs a network of board members, volunteers and community spokespeople who can help make the case for the issues the organization is addressing, the progress it's made and the people it's helped, she said. Creating such a network has a two-fold benefit, Ms. Rosqueta said.

“It not only puts them in a position to better deliver on their mission, it's a great risk management strategy,” she said.

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