Pelotonia Aims to Inspire Donors Following Fundraiser Fraud Case

On July 26, Pelotonia, a charity bike ride in Columbus, Ohio, that raises money for cancer research, launched an ambitious campaign to bring in $102.2 million over five years to establish a new immuno-oncology research institute at the Ohio State University.

Since Pelotonia’s first bike ride in 2009, riders have raised more than $184 million for the research center and hospital. The most recent commitment, which will create the Pelotonia Institute for Immuno-Oncology, marked the first time that Pelotonia has undertaken a multiyear fundraising effort.

The announcement came at a rocky time. Just three days after Pelotonia embarked on this new goal, Ohio Attorney General Dave Yost announced that the state had settled an allegation of fundraising fraud by former Pelotonia rider John Looker.

Looker’s misdeeds created a headache for the charity’s leaders and devastated some Pelotonia participants who fell for his ruse. It’s also a case study in how an effective fundraising model can be abused.

Suspicious Claims

From 2009 to 2018, Looker raised roughly $64,000 for cancer research, appealing for donations on the basis of his own battle with the disease. Pelotonia staff had their suspicions about his claims of having cancer — enough that they removed him from promotional materials — but patient privacy regulations prevented organizers from verifying his stories with his doctor.

When three riders confronted him about their suspicions in August 2018, Looker admitted that he’d fabricated his diagnoses, which included Stage 4 terminal brain cancer. What’s more, two riders accused Looker of pocketing an estimated $1,300 in donations from a 2016 garage sale fundraising event for the charity.

Looker’s settlement includes $1,800 in restitution for Pelotonia and a $2,000 civil fine paid to the State of Ohio. It also bars Looker from raising money for charity or holding any position other than volunteer with an Ohio charity.

In response to the settlement, Pelotonia’s president, Doug Ulman — himself a cancer survivor — penned a letter to volunteers and riders recognizing “feelings of deep disappointment and a sense of betrayal over John’s deception.” In addressing the incident, Ulman drew on his experience as the former chief executive of the Livestrong Foundation, when he had to answer to the media, donors, and volunteers after it was confirmed that the charity’s founder, Lance Armstrong, had used performance-enhancing drugs in cycling competitions.

Three days after the Ohio attorney general announced the settlement, the New York Times ran a story about Looker’s crime. It was race weekend, and Ulman faced nearly 7,500 riders, some of whom felt dissatisfied with the charity’s response to the fraud allegations.

While Looker’s wrongdoing didn’t spell disaster for Pelotonia, it was a distraction from the charity’s annual bike ride and the launch of its major campaign.

“It’s an uncomfortable thing to do,” Ulman said of addressing participants’ concerns about Looker’s fraud and writing the letter just days before the ride. “That’s not what I wanted to be doing. But it was necessary. We as an organization are not going to shy away from answering people’s questions or talking about it. That’s what communities do; they address things together.”

An Inspiration to Donors

As the charity strives to move past this incident of fundraiser dishonesty, Ulman says it will “double down” on demonstrating how Pelotonia dollars have advanced cancer treatment. The new institute at OSU is integral to that message. Ulman describes it as a “north star” for Pelotonia riders and volunteers, who will eventually be able to meet with the institute’s leaders and learn about their research.

He believes working toward the specific goal of hiring as many as 32 new faculty members and renovating laboratories to accommodate immuno-oncology research will inspire donors. Pelotonia has long donated 100 percent of the money that riders raise to cancer research, and this commitment has built trust among the charity’s donors, Ulman says.

“I don’t worry tremendously that people would question where the money is going,” he said of the new campaign.

Authenticating a Story

After reading the New York Times article about Looker’s fraud, Kari Bodell, senior vice president for social impact at CSM Sport & Entertainment, an agency that produces events for nonprofits, said she and many of her peers were alarmed. “People were texting and emailing it around, and there was really a sense that this could happen to any one of us,” she said.

Therein lies the rub for nonprofits that rely on volunteer fundraisers: Personal appeals inspire donations to a cause, but authenticating those stories would be too onerous to be realistic. And should charities even be expected to do so? When nonprofits ask volunteers to raise money, they take a risk — albeit a small one — by trusting someone who isn’t an employee to represent their organization and its mission.

In 2018, volunteers raising money from friends and family during the three largest events collected more than $400 million, according to the Peer-to-Peer Professional Forum. Tens of thousands participated in these events. And while examples of fraud like what Pelotonia experienced seem to be rare, it’s worth considering whether charities should take precautions to avoid such incidents.

The American Cancer Society raised more than $184 million in 2018 through Relay for Life, the highest-grossing peer-to-peer fundraising event that year.

“While it is impossible to verify every one of our more than 1.6 million participants in the U.S., we have policies in place to review all stories we promote on our website,” the American Cancer Society stated in an email. These policies include “personal contact with the constituents, interviews, and release forms,” according to the charity.

The Alzheimer’s Association’s Walk to End Alzheimer’s brought in more than $96 million in 2018. The charity has not dealt with fundraising fraud like Looker’s and encourages participants to share their personal reasons for participating, Wendy Vizek, senior director of constituent events at the association, wrote in an email. Money donated through the charity’s fundraising pages is monitored and transferred directly to the nonprofit, she said.

Ulman says he isn’t convinced that one instance of wrongdoing is reason to overhaul peer-to-peer fundraising, which has otherwise worked so well for his organization.

“While I am all in favor of putting in processes and safeguards, I also want to make sure there’s a level of authenticity and that we continue to believe in the positive nature of the vast majority of individuals,” he said.

One such safeguard is a requirement that any participant who shares a personal story in Pelotonia promotional materials sign a statement that the story is true. The charity is also collaborating with doctors at the James Cancer Hospital at Ohio State who recommend patients, with their permission, to share their stories with the charity.

“There’s no way for a charity to police every last one of those people who is raising funds on behalf of their cause. Nor should they,” said Bodell, with CSM Sport & Entertainment. Even so, there is a risk that a volunteer fundraiser could act unethically. And should that happen, charities may have to contend with distrust of their organization.

Participants in these events often have an emotional connection to the charity and its cause. As Looker’s former partner, Ben Addison, told the New York Times, “Pelotonia’s almost a religion. People take it very seriously.” Bodell says that charity events rely on creating a unique culture to retain participants from year to year and attract donations.

Building a community of likeminded do-gooders who are joined in a shared goal can inspire participants and donors, and Bodell says nonprofits must not create “a culture where everyone’s suspicious and looking over their shoulder.”

In the wake of the settlement with Looker, Ulman still says it’s essential to continue believing in fundraisers’ and donors’ goodwill. He said, “I struggle with working in an environment that does not give people the benefit of the doubt.”

Emily Haynes worked in nonprofits before she began reporting on fundraising for the Chronicle. Recently, she has covered fundraising on social media, Giving USA’s annual report on giving trends, and how the ALS Association found success with the Ice Bucket Challenge. Email Emily or follow her on Twitter.