March 18, 2011 | Read Time: 7 minutes
The behind-the-scenes efforts fund raisers make to woo big donors got an unwelcome place in the public spotlight this month when the top fund raiser at NPR was secretly videotaped at a lunch at which a $5-million gift was offered.
Ronald J. Schiller, who was the broadcasting station’s senior vice president for development, left NPR for good a few hours after a tape was released showing him making disparaging remarks about members of the Republican Party to a Muslim group that was offering the gift but turned out to be a fake.
Mr. Schiller declined to talk to The Chronicle on the record, but fund raisers, chief executives, and nonprofit experts across the United States say his experience illustrates a harsh new reality.
A bad economy that has made seeking money more competitive than ever, a gaping deficit that has put government aid at risk for many charities, and the shrill and divided state of political discourse means fund raisers can expect more challenges like the one Mr. Schiller faced.
“Part of me thinks, Poor guy, he got set up,” says Paul C. Pribbenow, president of Augsburg College, in Minneapolis, who also chairs the Association of Fundraising Professionals’ ethics committee.
“On the other hand,” he says, “the political and economic climate has led to stress, anxiety, and fearfulness playing a bigger role in institutions and their fund raising. We are put in situations where people’s political views are playing a bigger role. People are in a ‘gotcha’ mode.”
“What happened at NPR is a sign of the times,” says June Bradham, a Charleston, S.C., fund-raising consultant. “All sources of government support are being cut. It just depends on whose ox is getting gored this week.”
Doug Eichten, president of DEI, a nonprofit fund-raising consulting group that works with 270 public radio stations, says it’s important that nonprofits don’t see the episode at NPR and what happened to Mr. Schiller as just about federal financing or public broadcasting.
“This is a wake-up call,” he says. “He was brutally treated, but someone who is a very strong fund raiser and very high up went beyond what would be expected in a discovery call. People should be looking at this throughout the entire nonprofit sector.”
Among the lessons highlighted by nonprofit experts:
A professional record only goes so far. The NPR flap took many in the charity world by surprise, partly because of Mr. Schiller’s reputation as a highly successful fund raiser.
Before he joined NPR two years ago, Mr. Schiller spent four years at the University of Chicago, during which he tripled the number of donations greater than $5-million and nearly doubled annual contributions, to $517-million, by 2009. He also led a $2.4-billion campaign, ending in 2008, that went 20 percent over its goal.
But those accomplishments were overshadowed by politically charged comments caught on tape. Even though analyses of the tapes by several video experts show that Mr. Schiller’s remarks were edited to make him look bad, some fund raisers and recruiters say that doesn’t matter. They fault him for getting in a position in which his comments could offend people, especially at an organization like NPR whose federal financing has been under fierce questioning in recent months.
Steven Ast, a Stamford, Conn., executive recruiter who seeks fund raisers for top development jobs, says that Mr. Schiller’s decision to meet with a Muslim organization, given sensitivities surrounding events in the Middle East, showed poor judgment. “Would I sanction him being released from the job? The answer is yes,” he says. “Would I regard him as a candidate for the next position? The answer is no.”
Avoid controversial topics. On the tape, Mr. Schiller appears to condone the view that the Republican Party has been “hijacked” by people in the Tea Party whom he calls “xenophobic” and “seriously racist, racist people.”
That view is at odds with how NPR strives to portray itself, as an objective, unbiased news operation.
“You’ve got to use judgment, and I am surprised that a fund raiser that seasoned would make a comment like the ones in the newspaper to a potential donor he’d never met before,” says Paulette Maehara, outgoing president of the Association of Fundraising Professionals. “The first meeting is really about listening and asking why are you interested in NPR. Making disparaging comments, no matter how benign, could be a mistake.”
“We are paid for our judgment,” adds Bill Sturtevant, vice president for principal gifts at the University of Illinois Foundation. “Here’s an example of a fund raiser impacting his organization’s mission in a negative way because he didn’t finesse the discussion appropriately. That’s unfortunate because the job of a fund raiser is to serve the mission by raising money to support it.”
Don’t cater to donors’ views. By seeming to suggest on the videotape that some Republicans are xenophobic and racist, Mr. Schiller may have been expressing a perspective that he thought the would-be Muslim donors would share, says Kent Dove, a Bloomington, Ind., fund-raising consultant who spent 17 years raising money at the University of Indiana. If so, that was a big error, he says.
“Too many fund raisers are trying to get the gift and telling the donor what they think that person wants to hear,” says Mr. Dove. “This is prone to happen because fund raisers are under enormous pressure in the short term to raise money. But are they willing to go along with whatever the donor says to get the check? Fund raisers should not pander to a donor’s point of view in hopes it will lead to a gift.”
Uphold the organization’s values. The comments Mr. Schiller made that NPR would be better off in the long run without federal funds, though he was careful to say the money is critical for local stations, can be construed as going against NPR’s public stance that the funds are vital.
Some of NPR’s 268 member organizations rely on federal aid for half or more of their annual budgets; losing that money could be a death blow for some.
“The big lesson is that when you represent an organization, you have to be aligned with its mission, and the views he expressed were not part of NPR,” says a senior fund raiser who asked to remain anonymous because of his previous experience raising money for public broadcasting. “You have to represent the organization, and you cannot go off the reservation.”
Plan for the worst. As lawmakers and public-policy experts debate how to trim the federal deficit, including proposals to reduce or eliminate the charitable deduction and limit which organizations qualify for tax exemption, “every charity should be concerned about their revenue model,” says Michael W. Peregrine, a Chicago lawyer who represents several large nonprofit organizations.
“I’ve asked my clients, What if they lose the charitable deduction? What if they lose their tax exemption?” Mr. Peregrine says. “The board has to have a Plan B and C.”
Help CEO’s understand their liability. Vivian Schiller lost her job as NPR’s CEO for something Mr. Schiller (no relation) did in the fund-raising arena, and that kind of punishment will happen more frequently to organization leaders, Mr. Peregrine says.
Courts and lawmakers increasingly fault corporate heads for the mistakes of subordinates, even when they act without the CEO’s knowledge, he says, so the same rule will probably apply in the nonprofit world.
“We are in a finger-pointing climate,” Mr. Peregrine says. “There is a certain degree of unfairness, but the government feels that there is a deterrent effect by holding executives accountable.”
In this context, he says, “we have to be ready in the nonprofit sector to act like our corporate peers because we might not survive otherwise.”
On the other hand, while CEO’s may be held accountable, nonprofits should not rush too quickly to judgment, says Diana Aviv, president of Independent Sector, a coalition of charities and foundations.
“America has long prided itself on our belief that our fellow members of society are innocent until proven guilty,” she says. “We have a broad obligation to withhold judgment until all the facts are considered. It is a matter of good governance, and it is the right thing to do.”
Suzanne Perry contributed to this article.
