A dispute between Operation Smile’s founder and its board of directors has spurred a splintering of the three-decade-old charity that fixes cleft lips and other facial deformities for children in impoverished nations around the world.
The Norfolk, Va.-based nonprofit’s board of directors voted Monday to start a new venture that a majority of the board and several senior executives from Operation Smile will develop, according to William Fox, the board’s chairman.
The new venture will focus solely on delivering free cleft surgeries, while Operation Smile will continue to offer those same procedures plus its broader suite of other services, such as medical training, dental work, speech therapy, and counseling.
The venture will be operated as a program within Operation Smile with the intention of turning it into a standalone charity, said Wayne Zinn, chief operating officer. The employees of the program, however, will not move with Operation Smile when the charity departs from its Norfolk offices for a new Virginia Beach headquarters in September, Mr. Zinn said.
“It’s going to be up to them where they want to operate from,” he said.
Operation Smile has not informed its donors about the new venture. Mr. Zinn, who had previously served as chief operating officer for the charity between 2005 and 2008, said he was hired in June to help with this transition. He said that once the program evolves into a separate charity, “they’ll raise their own funds.”
“We’re looking at the best ways to talk to our donors,” Mr. Zinn said.
A ‘Collaborative Agreement’
There had been a growing feeling among board members that, by focusing on delivering free surgeries, Operation Smile could be helping more children more quickly, said Mr. Fox.
The decision was a collaborative one between the board and the charity’s co-founders, said Mr. Zinn, although he acknowledged there had been competing interests within the organization about how best to accomplish the task of helping children with cleft lips.
“It becomes a struggle when you have conflicting interests within an organization,” Mr. Zinn said. But, he added, “it was a collaborative agreement.”
Since 1982, when William Magee and his wife, Kathleen, started their work in the Philippines, Operation Smile has provided “over 200,000 free surgeries for children and young adults born with facial deformities,” according to its Web site. That’s an average of nearly 6,500 surgeries per year. It reported $48-million in revenue in fiscal year 2011, the most recent year for which figures are available.
“There’s some beneficial differences of opinion” between the board and the founder, said Mr. Fox. “We want to be able to respond faster. It’s a way to get more kids treated.”
A ‘Companion Venture’
A spokeswoman from Operation Smile said Mr. Fox would be leading the new venture. In addition, Operation Smile’s chief executive Bill Kliewer, appointed less than a year ago to replace Dr. Magee, would move to the new venture with four other employees. Dr. Magee will now serve as chief executive officer again.
“Operation Smile’s Co-Founder and CEO, Dr. Bill Magee, has requested that outgoing Operation Smile Chairman Bill Fox take a leadership role in ensuring the success of this new initiative,” said Jessica Kraft, spokeswoman, in an e-mail to The Chronicle. “He will be joined by four outgoing Operation Smile Board members. Several executive management team members will also transfer from Operation Smile to develop the new entity.”
She said details are still being finalized. Mr. Zinn said that the five board members had all been serving beyond their terms and that new Operation Smile board members will be announced shortly.
“After much discussion within Operation Smile about how best to fulfill our mission in healing children’s smiles, we are launching a companion venture that will prioritize innovative, scalable delivery of free cleft surgeries over investments in self-sufficiency,” Ms. Kraft said in the e-mail. “This will be a separate organization incubated within the Operation Smile Foundation that will use a complementary business model.
“We believe both models have value, and we are empowering each of them to succeed and support one another,” she added. “The new venture will be supported with resources and professional guidance from Operation Smile.”
Ms. Kraft said in her e-mail that “Operation Smile’s core business model will not be impacted by this initiative.”
“It will continue to rest on the principle that education and medical training are the foundation of sustainability in caring for children,” she said.
Getting Organized
Mr. Fox said the new venture is still only days old and that he had no details on how it would function yet.
“We are trying to organize ourselves as best we can,” he said. “The movement into this more spontaneous care occurred Monday night.”
The new venture would focus on quickly providing free surgeries to more children in more remote areas of the world, he said. He added that donors to the organization, known for its ads featuring children with cleft lips, had not yet been informed of the decision.
The proposed focus of the new venture sounds similar to how Operation Smile’s main competitor, Smile Train, promotes its services: “We don’t do everything. We do one thing,” states a slogan on Smile Train’s Web site.
Smile Train was founded in 1999 by two former Operation Smile board members. Since then it has performed 875,000 free cleft surgeries, an average of 62,500 per year. Smile Train pays doctors in other countries to perform the surgeries while Operation Smile sends its surgeons to operate and also trains local doctors as well.
Smile Train, which started in 1999, reported $114-million in revenues in 2011, the most recent year for which figures are available.
Mr. Zinn said discussions about a new venture began last year but that they had nothing to do with the failed merger.
The new venture, he said, will be “a hybrid between Smile Train and what Operation Smile is today. They’re going to be in the middle there. That’s the hope for it.”
The two organizations had agreed to a merger in 2011 but Smile Train donors scuttled the deal through coordinated opposition.