A few days after Pennsylvania State’s former assistant football coach Jerry Sandusky was arrested for sexually abusing eight boys, Rodney Kirsch, senior vice president for development, called a staff meeting.
It was November 2011. With Penn State’s campaign to raise $2-billion two years from completion, Mr. Kirsch said it was OK to cry—but not to give up.
“I wept many times last week,” he said. “But I’m not going anywhere. My mission is to restore Penn State’s reputation. I need you to stay here and help me.” Together, he vowed, “we will make Penn State better, stronger, and prouder.” He got a standing ovation.
If fundraising is any indication, Mr. Kirsch kept his promise.
Last month, the university announced that it had raised more than $2.1-billion, two months ahead of the campaign’s official closing date in June. The fundraising drive persevered through the abrupt departures of Penn State’s president, Graham Spanier, and its legendary football coach, Joe Paterno, both of whom lost their jobs in the explosive days following Mr. Sandusky’s arrest. What’s more, the campaign had to overcome the tough economy, as the recession took hold just after the drive was announced in 2007.
Early Missteps
The university’s immediate response to the scandal was criticized by crisis-communications experts, who noted that Penn State seemed unprepared for the media onslaught. To protect both its reputation and its ability to raise money, they said, the university should have made sure its leaders had a plan and practiced how they would respond in the event of extreme negative publicity.
“They didn’t go immediately to ‘This is what happened; we feel horrible about it,’” says Jonathan Bernstein, a Los Angeles crisis-management consultant. “Nobody wanted to take responsibility for any of the warning signs coming out of athletics. They hunkered down, moved too slowly, and seemed to be buck-passing a lot.”
But since those initial missteps, Mr. Bernstein says, “they have been doing all the right things. They just had to establish they were back on track.”
Perhaps the biggest factor that allowed the university to keep its fundraising efforts on target was a focus on stability.
Rodney Erickson, a 30-year Penn State veteran and provost, shelved his retirement plans to serve as interim president when Mr. Spanier was forced to step down.
Mr. Kirsch, the chief fundraiser and now in his 19th year at Penn State, also stayed on the job, which helped keep turnover low among development staff and volunteers. “He was steady in reminding us that nothing about the campaign had changed, even though everything around us had,” recalls John Dietz, the associate vice president for development.
Mr. Kirsch estimates that less than 8 percent of his 375 development and alumni-relations staff members leave annually. “I don’t know of anyone who left because of the scandal,” he says.
Peter Tombros, a retired pharmaceutical executive and the campaign’s volunteer chair for the drive, was another key player. A few days after the scandal broke, he gathered his fellow campaign volunteers.
“Penn State needs you now more than ever,” he told them. “Remind our fellow alumni and friends that through their philanthropy, they have helped this institution earn the respect of the world, and through continued support, they can help Penn State pride endure.”
Looking at Data
After an initial period of disbelief and paralysis that set in with news of Mr. Sandusky’s arrest, Mr. Kirsch and his fellow fundraisers got to work responding to the torrent of emails, phone calls, and visits from upset alumni, donors, local residents, and others.
Mr. Kirsch did an analysis of 4,000 emails, assessing whether the content was supportive or negative and whether and how much each individual had given to Penn State before. He noticed a pattern.
Donors who had given $5,000 or more were much more likely to be supportive of Penn State through the crisis (79 percent of those people who donated $25,000 or more) than those who had given less. People who had never contributed to the university were the most negative, with 66 percent making disparaging comments.
That finding helped Mr. Kirsch and his colleagues decide to increase visits to donors, despite advice from some donors and volunteers to suspend solicitations in the scandal’s wake.
As Penn State fundraisers stepped up their visits and calls to donors, they had a motto: “Don’t make a decision for donors. Let donors make the decision,” says Lori Baney, director of donor services.
The strategy helped fundraisers set aside worries about whether donors would stop giving and no longer be energized, Mr. Dietz said. “Instead of hunkering down, everyone kept going,” he said. “You can crumble or resurrect yourself.”
Ray Marsh, director of development communications, and his colleagues in the fundraising and alumni-relations office assessed the responses of people who reached out after Mr. Sandusky was arrested. They then replied to about 1,400 people, paying particular attention to those who seemed to retain a sense of loyalty to Penn State.
“If we could reach out and respond in a meaningful way, we could keep them engaged,” says Mr. Marsh. “It turned what was a negative experience into something positive, where we felt we could bring people back into the Penn State fold.”
Watching the Staff
Meanwhile, development leaders kept a close eye on the toll the scandal was taking on their staff. Mr. Dietz noticed, for example, that one fundraiser was consumed by the negative news. “She was reading everything that came in,” he recalls. “She broke down several times.” So when the university offered counseling to those who needed help coping with the scandal, Mr. Dietz insisted that the woman take advantage of it.
“It gave her a chance to realize others were experiencing the same issues,” says Mr. Dietz. “I noticed a difference” in her behavior afterward.
Mr. Kirsch also advised his staff not to read blogs and other online commentary about the unfolding sex-abuse saga. With 44,000 students on Penn State’s main campus alone, he says, “rumor starts on blogs and morphs.” Trying to distinguish between fact and fiction, he adds, “is too time-consuming when people need to focus.”
The loyalty demonstrated by the development staff, as well as Penn State’s students, showed results. Only nine pledges to the campaign were ultimately withdrawn because of the child-abuse scandal, notes Susan Welch, dean of Penn State’s College of Liberal Arts. Of two big gifts, each more than $1-million, that were promised to her college and then withdrawn, one gift was restored, she says, and “we’re still talking” with the other donor.
Bob Banks, an alumnus and donor who runs a real-estate finance company, says he has given Penn State “into the seven figures” and is honoring a pledge he made before the scandal. But he says he decided against a big campaign contribution and won’t give more until he is reassured by the outcome of several pending lawsuits, including one filed by Mr. Paterno’s family against the National Collegiate Athletic Association, which stripped the coach of 15 of his winning seasons.
“I was devastated, I went to the sidelines,” says Mr. Banks. “I am still waiting. The final chapter hasn’t been written, and I want to see what the resolution is.”
But other donors have given even more than they originally planned because of the scandal, to ensure the fundraising drive’s success. Mr. Tombros, the campaign chairman, for example, increased his pledge from $10-million to $15-million.
One of the reasons he felt confident enough to boost his donation, Mr. Tombros says, is Mr. Kirsch’s fundraising leadership.
A ‘North Star’
To handle the effects of the scandal, Mr. Kirsch, 57, says he reached back to his roots growing up on a 1,200-acre cattle ranch in North Dakota.
He has a life-size cardboard replica of the actor John Wayne in cowboy attire, a gift from his staff, standing guard over his desk. A canvas in his office painted by one of his two daughters lists the 10 rules of the so-called Code of the West like “take pride in your work,” “talk less and say more,” “do what has to be done,” and “always finish what you start.”
Mr. Kirsch discovered the code shortly after the scandal broke, when his associate vice president for development, David Lieb, gave him a book about life lessons in Western movies.
“It was really a North Star for me,” he says. “You’re lucky if you can adopt six or seven.”
Mr. Erickson, the interim president at the time, also drew on his rural roots and work ethic to get through the tough time that followed.
On a 52-acre farm where he grows corn and soybeans, Mr. Erickson tilled his land under the headlights of his tractor from 10 p.m. until the wee hours of the morning. That way, he could devote his days to, among other things, visiting donors and overseeing Penn State’s negotiations with Mr. Sandusky’s victims.
He will formally retire at the end of June when the campaign officially ends.
Costs Pile Up
After 2011, the initial group of eight victims grew to 32, as more men came forward with claims of past abuses. The university, Mr. Erickson says, has settled 26 of those cases so far at a cost of $59.7-million. Penn State was also hit with a $60-million fine by the NCAA.
Despite all the progress with donors in the wake of the scandal, the university still has work to do. Some faculty and alumni who support the athletics program, Mr. Kirsch’s colleagues note, are still angry about the way Mr. Paterno, one of the most successful coaches in college football history, was fired by board members who sent a letter to his home shortly before a televised news conference announcing his departure. Those supporters are also incensed that a statue of the iconic coach, who died of lung cancer a few months after the scandal broke, was removed from Beaver Stadium.
Perhaps that’s why, among customers at the Penn State Creamery, which offers dozens of ice-cream flavors, Peachy Paterno is still a popular favorite.
