In the two weeks since the Los Angeles Times reported that the University of Southern California’s well-known former medical dean had been leading a double life — succeeding as a scholar but abusing hard drugs, hiring prostitutes, and witnessing a young woman’s drug overdose just three weeks before his resignation — the institution’s fundraisers have been hard at work to call donors who might have been jolted by the news.
The drugs-and sex stories might seem like a bad enough public-relations problem for fundraisers at an institution that only a few months ago had announced it was planning to meet its $6 billion fundraising goal 18 months earlier than planned, shattering the idea that only institutions like Harvard and Stanford could succeed with such audacious goals.
But the national media attention caused another problem for the development office: Journalists also painted a picture of Carmen Puliafito, a renowned eye surgeon, as a billion-dollar guy — a star fundraiser for the institution. It’s easy to see how they got that idea: News releases on USC’s website show Dr. Puliafito posing with celebrities at fundraising events.
The Times reported that Mr. Puliafito “was a key fundraiser for USC, bringing in more than $1 billion in donations, by his estimation.”
So as the university’s fundraisers sought to check in with big donors — lest the university lose any gifts or commitments — it also faced questions about whether it could keep pulling in big dollars without the medical dean.
We’re taking advantage of an awkward situation to get closer to some of our top donors.
Turns out that was an awkward query for Albert Checcio, USC’s senior vice president for advancement.
“We never described him as a star fundraiser; it was self-described,” says Mr. Checcio, who has been raising money for colleges for 40 years.
Dr. Puliafito “wasn’t a star fundraiser, he was just OK,” he says, noting that other academic leaders did a better job of pulling in money for the institution. “We have stars.”
When asked why, if that was the case, USC’s website featured Dr. Puliafito posing with celebrities at fundraising events, Mr. Checcio said that was not necessarily a sign of fundraising talent. For those gala dinners, the money is raised ahead of the event when people make gifts in exchange for tickets and tables, Mr. Checcio said. “The dean’s job is to welcome everybody and talk about the importance of supporting whatever that unit is and pose for pictures,” he said. “That is it; that’s the whole story.”
An Evolving Strategy
USC has faced many questions about its responses to complaints about Dr. Puliafito, who resigned as dean a year ago when confronted with accusations about his behavior, though he remained on the medical staff. University officials have initiated the process to fire Dr. Puliafito, who could not be reached for comment by The Chronicle.
The university’s position went from an initial “no comment” to gradually being more and more open to ultimately acknowledging that the university had “received various complaints” about the former dean’s behavior leading up to his resignation.
While the university was developing its publicity strategy, Mr. Checcio and his staff worked quickly behind the scenes. The first step was to gather top fundraisers to talk about the known facts, he says. The next step was to get those fundraisers to call all major donors. “We’re taking advantage of an awkward situation to get closer to some of our top donors,” Mr. Checcio said.
He met with the development staff on the university’s health-sciences campus the Thursday following publication of the article about Dr. Puliafito and met with fundraisers on the main campus the following Wednesday, listening to their concerns and mapping out a strategy for handling incoming calls from donors.
So far there haven’t been many, he says, estimating about a half-dozen calls on both campuses. Their concerns have been not with the university’s handling of the scandal but of concern for Dr. Puliafito’s behavior, Mr. Checcio said. Fundraisers have been speaking with big donors about positive things happening on campus while pointing them toward official university statements on the scandal.
Jonathan Bernstein, a Los Angeles crisis-management consultant, called the university’s initial response to questions from reporters at the Los Angeles Times and elsewhere “a wrong-way case history.”
Still, Mr. Bernstein applauded the advancement department’s current strategy.
“You know that donors have read about it, but you’re only going to hear from people who are the most happy and most unhappy,” he said. That’s why it makes sense to reach out to top donors first, before they call, and assure them that the money they gave will go for the intended purpose. “The rule of thumb is that in such situations you should come out communicating with compassion, confidence, and competence,” he said.
Fundraisers’ role is to stay in touch with their donors and speak with them about their relationship to the university, Mr. Checcio said, adding that donors have been appreciative of their approach.
“You don’t want your fundraisers editorializing on the story,” he said. “In a story as complex as this, often you can’t speak about details yourself.”
Other Scandals
Other university fundraising departments have found ways to recover from scandals involving faculty and staff.
Pennsylvania State University managed to exceed its $2 billion campaign goal in the wake of revelations that former assistant football coach Jerry Sandusky had sexually abused children and that the university’s legendary football coach Joe Paterno had failed to properly report the abuse. One reason the university was able to stem any loss of donations was the fact that Rodney Erickson, then the interim president and a former provost, delayed his retirement to help maintain continuity, Penn State fundraisers told The Chronicle at the time. Fundraisers also analyzed the outpouring of feedback from donors, alumni, and others to better track which donors were most supportive of the institution during the crisis.
The University of Missouri saw fundraising dip following daily protests over race relations last fall. When fundraisers became concerned that the institution wasn’t telling its story to donors fast enough, the development office decided to share what it knew.
“We realized we couldn’t always wait for the perfect talking point,” said Tom Hiles, Mizzou’s vice chancellor for advancement.
Fundraisers also developed a rapid-response strategy, answering nearly all of the 3,400 calls, emails, and social-media posts from students, alumni, and donors. And they brought in Penn State’s now retired senior vice president for development, Rod Kirsch, to share what his staff had learned through their own scandal and try to boost fundraisers’ morale. By a few months later, loyal big donors and the university’s continued attention to the institution’s capital campaign helped.
Mr. Bernstein said situations at Penn State and USC make it clear why it’s important to avoid depicting any one nonprofit official as the key to an organization’s success.
“Anytime you tie your fundraising or your PR to the reputation of individuals, you take a risk,” Mr. Bernstein said.
Because it is inevitable that problems will crop up that damage the image of an organization, he added, it’s important to train and prepare for a crisis long before one erupts. “Reputation is your most important asset for any effort, including fundraising,” he said, “And sometimes fundraising organizations have a desire to put short-term profit ahead of long-term revenue,” ignoring warning signs that immediate gains might lead to trouble down the road.
Campaign to Continue
At USC, Mr. Checcio says the Puliafito scandal has caused no change in the institution’s plans to extend its capital campaign, even though it has already raised $6.3 billion, exceeding its goal. “I’m not sure how much longer we’ll run it out, but I know we have no intention of stopping,” Mr. Checcio said.
Nearly $1.5 billion of that total will go to supporting the areas Dr. Puliafito oversaw: a teaching hospital, medical school, and medical research.
Rohit Varma, who was appointed to succeed Dr. Puliafito as dean, took over fundraising duties more than a year ago, Mr. Checcio noted.
Mr. Checcio said he believes that honesty and transparency with donors will go a long way. The next step, he said, will be forward-looking. “The institution is so much bigger than any one person, and our goals and aspirations don’t change because of a very awful isolated incident involving one person, tragic as it is.”
You don’t want your fundraisers editorializing on the story. In a story as complex as this, often you can’t speak about details yourself.
Long-Term Effects
Nonetheless, volatility of any kind has the potential to slow giving, says John Glier, CEO of fundraising consultancy Grenzebach Glier and Associates, who has worked with USC over the past decade and advised other universities including Penn State through turbulent times.
In the long run, he says, universities that have suffered scandals rarely endure long-term fundraising damage. “Those who’ve been committed to the institution understand its values,” he says. “I doubt that any donor would walk away and say, ‘I no longer want to give.’ "
Sara Stern, executive vice president for philanthropic marketing at Lipman Hearne, suggests fundraisers use this moment to ask what’s on donors’ minds and what questions they have. “This is a serious issue, a big breach of trust,” she said, adding that it does provide an opportunity to rearticulate the institution’s core values.
Staff members should also use this moment to continue to communicate what they are doing to keep students and faculty safe, to ensure that faculty that have drug-abuse issues have access to the help they need and are not in a position of power that could hurt others.
“USC is an astonishing fundraising machine,” she says. “if they handle this well and openly with frequent communication meetings going forward, then they’ll be OK.”
