Spring 2016 Nashville Nonprofit Review

Volume 4 | Issue 1

What has everyone talking?

NONPROFIT BOARD GOVERNANCE

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IN THIS ISSUE:

Charter and Bylaws - Your Unique Nonprofit Guidebooks

by Jeremy Pyper, the Office of the Tennessee Attorney General

Governance Through Times of Change

a case study on the Arts & Business Council of Greater Nashville governance best practices

When Controversy Challenges Your Brand and Funding

by Linda Schacht, Lipscomb University

Volume 4 | Issue 1

Welcome to this issue of NNR

EDITOR Meg Morgan Center for Nonprofit Management ADVISORY TEAM Lewis Lavine Center for Nonprofit Management

This issue of the Nashville Nonprofit Review is devoted to board effectiveness. It begins with a comprehensive article by Senior Counsel Jeremy Pyper of the Tennessee Office of the Attorney General about board basics: the charter and bylaws. Jeremy was a co-author of the recently published book "What Every Nonprofit Board Member Should Know, 2016” and he is an expert in nonprofit law and regulation.

Keel Hunt The Strategy Group

The second piece, written by NNR editor Meg Morgan, is a case study about the high-functioning board that governs the Arts & Business Council of Greater Nashville. Rounding out this edition of NNR is an article that recounts lessons that nonprofit boards and executives can learn from Planned Parenthood’s recent controversies. It was written by our advisory board member Linda Schacht, and we appreciate her time.

Rich Rhoda Tennessee Higher Education Commission, retired

Please enjoy this edition and the takeaways from these very different case studies.

Brad Gray Center for Nonprofit Management

Linda Peek Schacht Nelson and Sue Andrews Institute on Civic Leadership at Lipscomb University CONTRIBUTORS Jeremy Pyper Office of the Tennessee Attorney General Meg Morgan Center for Nonprofit Management Linda Schacht Lipscomb University

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In its 30th anniversary year, CNM is focusing attention on the first building block of a nonprofit: the board. While there is much change in the nonprofit landscape, and new ideas pop up daily, it is a given that an enlightened, engaged, and vigilant board is essential for an agency's success.

CNM President Lewis Lavine

About the Center for Nonprofit Management Our mission: To create and sustain nonprofit excellence Our vision: Better communities through extraordinary nonprofit services For 30 years, the Center for Nonprofit Management has been a home to Middle Tennessee’s nonprofit leaders. Located in the historic Trolley Barns near downtown, it offers a place to relax, share triumphs and find solutions to problems. At CNM, nonprofit board members, executives and staff have the opportunity to learn how to enhance their services through our comprehensive calendar of skill-building workshops, our consulting services and our annual Bridge to Excellence conference. CNM celebrates and recognizes the enormous positive impact made by its nonprofit members through the annual Salute to Excellence awards ceremony.

Spring 2016

CHARTER AND BYLAWS: Your Unique Nonprofit Guidebooks

by Jeremy Pyper, Senior Counsel, Office of the Tennessee Attorney General The Tennessee Attorney General has a unique role to play with respect to Tennessee nonprofit corporations – particularly public benefit nonprofit corporations. Under Tennessee law, the Attorney General is charged with protecting the public interest – that is, the general interest in ensuring that Tennessee nonprofit organizations are using their charitable assets for the benefit of the public, rather than to enrich private companies or nonprofit board members.

The Public Interest Division of the Attorney General’s Office is the division that has primary responsibility for helping Attorney General Herbert Slatery fulfill his duty to protect the public interest. We do so by reviewing nonprofit mergers, extraordinary asset transfers, conversions, and dissolutions, by receiving and reviewing complaints about nonprofits, by opening investigations into problematic nonprofit organizations, and, if needed, by taking legal action against the nonprofits and people who misuse

charitable assets.

Our preferred method of protecting the public interest, however, is by educating the public about Tennessee nonprofit law. Although we cannot give legal advice, we welcome and regularly answer questions from the community about the Tennessee Nonprofit Corporation Act and other state laws applicable to Tennessee nonprofits. We also enjoy speaking to groups, large and small, about our work in regulating Tennessee charities.

For the last year, we have had the opportunity to work with the Tennessee Secretary of State’s Office and the Center for Nonprofit Management in preparing the 2016 Update to “What Every Board Member Should Know – A Guidebook for Tennessee Nonprofits.” We tried to use our collective experience to recommend best practices and offer guidance for common issues we see in corporate governance, legal compliance, and operational effectiveness. We wanted the Guidebook to be as universal as possible.

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Nashville Nonprofit Review

WHAT EVERY BOARD MEMBER SHOULD KNOW A Guidebook for Tennessee Nonprofits, 2016 Edition

Visit www.cnm.org/resources/links to find this updated nonprofit governance resource, completed by CNM, the Tennessee Office of the Attorney General, and the Tennessee Secretary of State.

Nonprofits, of course, are not all built the same. In the Attorney General’s Office, we deal with a diverse tapestry of nonprofit corporations – community animal rescue shelters, rural churches, large city arts organizations, billion dollar hospital systems, and everything in between. It would be impossible to produce a single document to guide the 39,320 active Tennessee nonprofit organization through all aspects of achieving their missions.

There are, however, two incredibly important, though often overlooked, documents that are tailored specifically for the needs and mission of each Tennessee nonprofit corporation – your own unique guidebooks, if you will. Failing to regularly review, or even read, these guidebooks can have significant consequences for you and the nonprofit you serve. These guidebooks are so crucial, in fact, that they are the first things we read at the Attorney General’s office when we review a nonprofit transaction, dissolution, or complaint. Of course, you know these guidebooks as your charter and bylaws.

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Every nonprofit in Tennessee is required to have a charter and bylaws. The charter and bylaws set out the internal rules for your nonprofit. The charter, which is filed with the Secretary of State when your nonprofit is incorporated, records the legal name of your nonprofit, whether it is a public benefit or mutual benefit nonprofit corporation, whether or not your nonprofit is a religious organization, and

whether or not your nonprofit will have members. It also contains provisions establishing where your nonprofit’s assets should go if the nonprofit closes.

Finally, the charter lists the name and address of the nonprofit’s registered agent and its incorporator.

Your charter may also include a statement about the nonprofit’s mission. It may define the powers the nonprofit can exercise to complete its mission. The charter may contain rules limiting the liability of the board, or provide for the nonprofit to indemnify the board if the board is sued.

Bylaws are complimentary to the charter. The Tennessee Nonprofit Corporation Act defines bylaws as “the code … of rules… for the regulation or management of the affairs of the [nonprofit]….” Tenn.

Code Ann. § 48-51-201(3). Bylaws typically provide the rules for the nonprofit’s board – the number, term, and selection of the board members, quorum and voting requirements for board actions, and notice requirements for regular and special meetings of the board. Bylaws usually include information about the selection and responsibilities of nonprofit officers – for example, bylaws may define the specific duties of the nonprofit’s President. Bylaws may also contain rules limiting board member and officer liability. For membership organizations, bylaws may include rules about becoming a member, member voting, or member removal. Bylaws may also establish procedures and limitations for conflicting interest transactions.

Be aware, however, that while your charter and bylaws are powerful tools for tailoring the rules for managing your nonprofit, they cannot be used to circumvent state law. For example, we recently reviewed a nonprofit charter that provided that upon dissolution, all of the nonprofit’s assets would be divided among the board members of the nonprofit. That provision violates state law prohibiting the distribution of nonprofit assets to board members and is, therefore, void. Your nonprofit’s charter or bylaws cannot permit loans to board members that are otherwise not permitted under the Nonprofit Act. When you draft or review your nonprofit’s charter and bylaws, be on the lookout for provisions that do not make sense or seem contrary to the mission of the nonprofit.

Spring 2016 You should also be aware that every nonprofit in Tennessee is required by law to keep a copy of its charter and bylaws on file at its principal office. You should confirm that your nonprofit maintains these vital records. If, for some reason, your nonprofit has lost its charter, you should request a copy from the Secretary of State’s Division of Business Services by filing out a Request for Copy of Documents. (This form can be found on the Secretary of State website listed below.) Please note, however, that the Secretary of State’s Office does not keep corporate bylaws on file – if your nonprofit has lost its bylaws, they will need to be recreated. Whenever we review a nonprofit – because it is closing, merging, selling all of its assets, or because we have received a complaint – we will ask for a copy of its charter and bylaws. We take special notice of those nonprofits that cannot provide us with these basic documents.

We recommend that each nonprofit review its charter and bylaws at least annually. When reviewing your charter and bylaws, consider the following questions: • Is your nonprofit acting consistently with its charter and bylaws?

• Is your nonprofit pursuing the mission set forth in its charter or bylaws, or has its mission changed?

• Do your charter and bylaws reflect recent changes to the Nonprofit Act?

reflect the reality of how your nonprofit operates, as long as the amendments do not violate state law. For example, the Nonprofit Act specifically states that you cannot use a charter amendment to divert nonprofit assets from their original charitable purpose. If your nonprofit has received a donation for the purchase of a building, you cannot simply amend the charter to allow the nonprofit to use the donation for general administrative costs, unless you have court approval. If you do amend or restate your nonprofit’s charter, it will need to be filed with the Secretary of State’s Office. Also, make sure that you maintain a copy of the original and amended bylaws at your nonprofit’s principal business office.

As a final word of warning, board members who fail to follow the charter and bylaws of their nonprofit may be violating their fiduciary duty of care to the nonprofit, which could lead to personal liability for damages to the nonprofit and its mission. The best way to avoid this scenario is to read and know your nonprofit’s charter and bylaws. You may wish to seek expert advice from an attorney or nonprofit management specialist to help you better understand your responsibilities under the charter and bylaws.

You can find more information about the charter and bylaws in the following sections of the Tennessee Nonprofit Corporation Act:

• Do you charter and bylaws protect you if your nonprofit is sued?

Tenn. Code Ann. § 48-52-102 (Charter) Tenn. Code Ann. § 48-52-106 (Bylaws – Limitations on liability) Tenn. Code Ann. §§ 48-60-101 through 302 (Amendment of Charter and Bylaws)

You may need to adjust your nonprofit’s practices from time to time to maintain consistency with your charter and bylaws. You may even need to consider amending your charter and bylaws if they do not

You can access these code sections for free through LexisNexis at the site listed below. As always, if you have any questions, please don’t hesitate to give us a call.

Resources and links Tennessee Office of the Attorney General and Reporter The Public Interest Division (615) 741-2516

Request for Copy of Documents: http://www.tn.gov/sos/forms/ss-4461.pdf LexisNexis link for the Tennessee Nonprofit Corporation Act: http://www.lexisnexis.com/hottopics/tncode

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Nashville Nonprofit Review

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GOVERNANCE E G THROUGH N TIMES OF a governance best practices case study The board of the Arts & Business Council of Greater Nashville has helped the organization successfully navigate through multiple transitions.

All organizations undergo times of change, but the organization that is now the Arts & Business Council of Greater Nashville has perhaps experienced more change than most nonprofits. Despite this, the organization is stronger today than ever. So what was it that enabled the ABC to survive, and thrive, through change? A strong board of directors.

Starting out A little over ten years ago, the nonprofit that is now the Arts & Business Council of Greater Nashville began as the Tennessee Volunteer Lawyers for the Arts when Bo Spessard and Casey Gill Summar joined forces. At the time, Spessard was an associate at a local law firm.

“I was interested in the Volunteer Lawyers for the Arts model [an affiliation of lawyers providing pro bono legal representation to artists], but I started looking around here and realized we didn’t have our own version. It’s an interesting model, and Nashville has a lot of songwriters and artists, so I wondered

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why,” Spessard said.

As it turns out, Summar had similar ideas about connecting her background in the arts with her legal training. Before her final year of law school at Vanderbilt, Summar interned with the VLA group in Atlanta, and she and Spessard connected shortly thereafter.

“When I got back to Nashville, Bo and I went to lunch and left about three hours later with a business plan.

We had a really similar vision for the organization,” Summar said.

But before diving headlong into the launch, Summar and Spessard went to great lengths to make sure that their imagined organization was actually a good fit for Nashville. Through an extensive community input process, they pulled all the constituents together for meetings, compiled online data from a survey, and conducted open community meetings.

In fall 2005, the assembled group of stakeholders and constituents wrote a mission statement at the

Spring 2016 considered the formation of their first board carefully. Summar says the organization tried to be as thoughtful as possible about building key partnerships and a strong network early on. Today, one of these key partnerships has been with attorney-atlaw Larry Papel, who was the founding board chairman of another nonprofit -- the Arts & Business Council of Greater Nashville.

“Larry is still a board member today and has been integrally involved since the founding, including shepherding us through our transitions and serving on the finance committee,” Summar said.

Casey Gill Summar and Bo Spessard (COO of Emma) final community meeting, wrapping up a fourmonth process.

“The community input process we conducted before starting an organization was invaluable. We were open to feedback the entire time about whether we should actually start something or not, and we heard some real concerns, which we took seriously. If we went to these community leaders with the thought, ‘This is definitely something we’re starting,’ I think we wouldn’t have heard the same things, and that ended up being very important,” Summar said.

Forming a board of directors With community input and a mission statement, Summar and Spessard, who became the founding board chair of TNVLA, continued reaching out to contacts in both sectors for support.

“We started asking some of the known lawyers around town, and they became our early champions. Many of them were just cold calls, believe it or not, but they were often successful because we kept hearing that these lawyers loved the initiative,” Summar said. “That also let us know that we were on the right track.”

The team created a grid of needed talents, and

Papel says he became interested in the organization because he felt the mission of mixing the arts and business communities made a lot of sense.

“It’s good for the community and for the local culture as well, and it provides funding for things that might not have happened otherwise,” Papel said.

Papel not only served as a founding board chair for the ABC, but he also helped navigate both organizations -- the ABC and the TNVLA -- through a major change.

Merging and mission shift After its first three years of operation, Summar and the TNVLA board noticed a national trend of Volunteer Lawyers for the Arts chapters: they were merging with Arts & Business Council organizations. Like the TNVLA, the Arts & Business Council of Greater Nashville had a national model (Americans for the Arts) and the organization was also about the same age as TNVLA. “As we gained traction with VLA after we had operated for a little over three years, we started taking a look at the ABC which had been founded by Martha Ingram,” Summar said. “The volunteer lawyer model really works well as a program for another organization. The two boards sat down and talked, and since both organizations were young and both boards relatively small, it seemed like they could really grow together.”

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Nashville Nonprofit Review One of the challenges of merging, however, was the differing nature of the two organizations’ foundations.

“The concern of the VLA board was that it did have a program working, and we wondered how it would work when merged with an organization that mostly did events [such as the ABC at the time]. So we went in with eyes wide open but in the end we realized that it was a great opportunity for both organizations. It took time to figure out how everything fit and worked, and we put a lot of thought into whether the greatest value was added through events or by providing services,” Spessard said.

Founding board chair Papel agrees that change can seem intimidating, but being on a board involves risk-taking.

“You must be able to make hard decisions, or it’s not a good board. It might be easy to go with the flow, but that’s not always the right thing to do,” Papel said.

The new Arts & Business Council of Greater Nashville, with the volunteer lawyer program included, began focusing on providing services, such as needed education initiatives for clients on subjects like negotiation skills and intellectual property rights.

“We wanted to create preventative measures that would stop the need for legal services even before issues came up. Our ultimate mission became to serve the creative community, but through engaging businesses and other partners,” Summar said.

“So while this shift might seem small from the outside, it was really big from our perspective and creating this mission became a great litmus test for us about what new programs we should take on. We could ask whether a program served the creative community and whether it engaged the business community and have an answer, so it was great to reach those points of clarity.”

Today, the ABC includes the Volunteer Lawyers and

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Professionals for the Arts program, education sessions that include monthly seminars and an intensive training opportunity called Periscope for artist entrepreneurs, an Arts Board Matching program, and more.

What works: Outside partnerships Before the TNVLA and ABC merged, board chair Shirley Zeitlin began leading the organization to become more financially sustainable. Zeitlin encouraged board giving from across the group, and through her network of contacts, she also helped come up with an innovative development solution for the ABC through a partnership with Belmont University.

“One of the ABC’s founders, Connie Linsler Valentine, took me to a concert in Belmont’s music hall, which was new at the time. It was an amazing building and the music was wonderful, so it occurred to me that it was an example of Belmont’s interest in the arts,” Zeitlin said. “Connie and I talked about how nice it would be to partner Belmont with the ABC to house us and provide equipment, and it turn, they would be able to tie some of their programming into what we were doing.”

With lower overhead costs through the partnership with Belmont, the new development initiatives were even more effective, Zeitlin said.

What works: Strong relationships Nonprofit board meetings aren’t always synonymous with social interaction and fun, but the ABC recognized early on that board relationships are key to overall organizational success.

“When we started VLA we had a small board and since it was a founding board, we got to know each other very well,” Spessard said. “When we merged, it got much bigger and I felt like, ‘I don’t know these people!’ and almost didn’t feel comfortable raising my hand even though I had been there since the beginning. But we realized that it takes time to build

Spring 2016 relationships but we encouraged that by having fun.”

Throughout its history, board members have been encouraged to get to know one another before or after regularly scheduled meetings.

“After meetings, many of us are open to getting drinks or dinner afterwards, and we welcome that.

We also bring in a guest to each board meeting, maybe a new artist we’re working with, and they tell the board about what they do,” Summar said. “We introduce our board to our programs first-hand when we can, such as bringing in a poet to demonstrate our WorkCREATIVE program.”

Spessard says that this practice makes the board more involved, and makes the meeting much more than just glancing at financial statements and heading right for the door at the meeting’s conclusion.

“When you know one another better, it makes for more thoughtful conversations instead of going through the motions, and you have fun doing it,” Spessard said.

What works: Diversity Several board members cited the group’s diversity as one of its greatest strengths, including immediate past board chair Thor Urness, attorney at Bradley Arant. Urness says that as the organization moved from a very large board to its more manageable current size, they have paid careful attention to diversity of all types.

“I think it’s helped significantly,” Urness said. “We make sure that it’s not all bankers or CEO-types – although you certainly need those, too – and we also have more representation of the arts community. It’s important to look at gender diversity, racial diversity, and different ages as well, so that the community you’re serving is represented as closely as possible.”

“People also like to be around others who are different than themselves, and that also increases engagement because the curious and creative people that you hope are on the board can help come up with more and better ideas, and are more willing to push the envelope and take risks,” Urness said.

What works: Structure Board treasurer Cindy Oliva of Pinnacle Financial Partners has been integral in ensuring best governance practices are in place by building new systems, especially around the subjects of finance, human resources, and risk management, Summar said. Oliva says she is a firm believer in structure.

“Hands down, I believe that successful organizations must have policies and procedures in place,” she said. “When I came in, I kept asking, ‘What the policy for that?’ and if there wasn’t one, the committee came up with something and presented it to the rest of the board for approval. Having these in place makes organizations run better because they can focus on what’s important.”

In addition, building policies and procedures protects the board, the staff, and the organization itself.

“And honestly, the smaller the organization, the more you need that structure in place,” Oliva said.

With Oliva’s leadership, the board also created a financial timeline that shows what needs to be completed throughout each month of the year, helping keep everyone on track and organized.

For more information about the Arts & Business Council of Greater Nashville, visit www.abcnashville.org.

And why is this diversity so beneficial? In addition to broadening the ABC’s reach in the community, board diversity also encourages innovation.

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Nashville Nonprofit Review

WHEN CONTROVERSY CHALLENGES YOUR BRAND AND FUNDING

Lessons from Planned Parenthood for nonprofit board and executives,

by Linda Peek Schacht, College of Leadership and Public Service, Lipscomb University Delivering quality services to the people who need them most is the essence of a nonprofit’s brand.

Staying true to the brand attracts clients, drives funding and garners public support.

But nonprofits today provide services in the context of political polarization and dwindling government resources, leading to scrutiny by state and federal lawmakers seeking to reduce spending or target social issues or both. The number of nonprofits vulnerable to reduced funding and the battles on social issues is likely to grow, whether the controversy involves one part of an organization’s services or is at the core of its mission.

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Planned Parenthood Federation of America faced a challenge to its brand and government funding in summer 2015. Its response to that challenge offers brand, crisis management and funding lessons for nonprofit executives, and especially for nonprofit boards. Those lessons call for leaders to: 1) Define

and protect their brands; 2) Create, test, and execute robust crisis management plans; and 3) Diversify their funding base to include a greater percentage of non-government funds.

The three topics cannot be addressed fully in a single article. Likewise, a discussion of the controversial issue of abortion is outside the scope of this article.

Instead, some key concepts on brand, crisis management and funding are explored through the lens of the Planned Parenthood controversy.

I. DEFINE AND PROTECT THE BRAND “We don’t have a brand, we have a mission.” That statement sums up the discomfort and disdain many nonprofit leaders have toward branding, an attitude documented by Harvard researchers and reported in a 2012 Stanford Social Innovation Review article (refer to Resources at the end of this article). The authors urge nonprofits to take branding seriously, and argue that a brand provides internal cohesion and capacity, manifested through trust and impact,

Spring 2016 and external identity manifested through image.

The authors also note the differences from for-profit branding that nonprofit leaders see: “the role of brand in driving broad, long-term social goals, the role of brand inside nonprofit organizations, and the multiplicity of audiences that nonprofits must address.” All these are in play in the Planned Parenthood controversy.

Planned Parenthood positions itself as “America’s most trusted source of reproductive health services.”

Its mission of quality accessible health care, sex education and contraception, and advocacy for reproductive rights is captured in the umbrella phrase: “Planned Parenthood. Care. No Matter What.” Their brand promise includes an environment of trust with caring physicians, nurses and staff. This brand and mission mean that Planned Parenthood has been no stranger to controversy through most of its 100-year history.

Planned Parenthood’s brand promise of compassionate care was put in jeopardy in July 2015 when a group created to oppose abortion released edited versions of secretly taped videos of a Planned Parenthood official. The official was shown callously talking about the handling and clinic reimbursement of fetal tissue at one of the two Planned Parenthood clinics that provide fetal tissue for medical research.

The public and government response left the organization scrambling to address attacks on several fronts: apologizing for the employee’s comments and tone, challenging the heavily edited videos and the deceptive tactics used to secretly tape them, strongly denying the charge of profiting from fetal tissue, explaining the value of fetal tissue to medical research, and moving quickly to protect its government funding – 45% of its annual budget.

Lesson: Practice brand democracy.

The creators of the Nonprofit Brand IDEA framework describe the need for brand democracy: “the organization trusts its members, staff, participants, and volunteers to communicate their own understanding of the organization’s core identity.” But participatory brand democracy must be rooted in everyone

understanding their constant role in embodying and protecting the brand’s key promises.

With highly paid national communications experts already on the payroll and with a history of tackling issues with communication from the top-down, Planned Parenthood appears could have benefited from a move to brand democracy. The organization needed better employee understanding that “everything communicates,” as brand expert Sergio Zyman advises, with regular and consistent reminders of the responsibility each employee has as keeper of the brand promise of compassionate care in an increasingly hostile political environment.

II. CRISIS MANAGEMENT AND EXECUTION Lesson: Face what keeps you up at night. Anticipate and be prepared with consistent, proactive response from a network of influencers.

Most boards and CEOs know crisis planning is important, but are you regularly scanning the environment for storm clouds gathering? Work from your worst-case scenarios and what the crisis catalyst for each might be. What allies can help you neutralize the catalyst and how do you activate them?

Planned Parenthood, through its history of weathering crises, knows its likely crisis catalysts and has a well-developed stable of third party influencers in the media, government, and entertainment to respond to different kinds of controversy and detractors.

Lesson: Don’t bury the apology.

Planned Parenthood’s 2015 crisis communication fell short in one important way – the apology. As crisis expert Lanny Davis pointed out in a Wall Street Journal column at the time, Planned Parenthood’s President should have been more empathetic to its detractors and supporters who were offended by the remarks shown in the video. An apology first would have dealt with how people were feeling, followed with the facts and attack on the video and credibility of the source.

The President buried her apology for the staff member’s remarks several paragraphs into her

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Nashville Nonprofit Review response. She focused first on the broad list of services Planned Parenthood offers to all, called the videos heavily edited and secretly taped by an antiabortion organization, clearly stated that Planned Parenthood did not profit from fetal tissue donated by patients, and outlined the benefits from medical research on fetal tissue. She ended with a promise to never let opponents limit the services Planned Parenthood offers. Her defiant tone was appropriate to her brand identity and the long legislative and political fights ahead. While it was important to correct the facts, you must first open people’s ears to hear, and burying the apology did not do that.

Lesson: Truth is not a bulletproof vest.

There is a communications mantra: “never leave an inaccurate statement without correction and response.” Planned Parenthood practiced this from the first day of the controversy in July 2015 through the court cases in January 2016.

But sometimes it doesn’t matter what the truth is. As a Ray Liotto movie character warns, “Truth is not a bulletproof vest.” Weathering the storm means constant, repetitive evidence that the prevailing narrative is not based in fact while understanding that your responses might not be enough to stop further fallout.

This was particularly true for the edited video crisis.

Video always trumps speech or text in persuasion and the Internet and social media have put video on steroids. The presidential race and debates added to the political fire, and gave a national forum for the videos to be discussed and Planned Parenthood denounced.

While mounting a full-throated defense, Planned Parenthood recognized that its explanation for the legal reimbursement for clinic costs was not enough to quell the belief they were profiting (illegally) from fetal tissue donated by women at two of their 700 clinics. The President notified the appropriate authorities that the organization would no longer accept clinic reimbursement in order to put the issue to rest.

Lesson: Actively and quickly engage. Consis-

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tently define yourself before others define you.

Challenge erroneous assumptions and assertions.

Planned Parenthood had proven itself adept at the new order of viral messaging – stories start on social media, migrate to mainstream media, and eventually people get to your website. This means you need to get out of the bunker and play offense.

Planned Parenthood did this by giving interviews to reporters, appearing on major media programs, and proactively filling the airways. You must be in the conversation all the time in real time, including social media and an up-to-date website. Otherwise, you will get defined by others.

Lesson: Recognize when you are in for the long haul.

Weathering the storm means being accessible and ready to cooperate not just with the media but with all investigating bodies. Protecting your organization’s ability to deliver services by protecting its brand and reputation sometimes requires sustained effort against an ongoing challenge.

Planned Parenthood had to address the perceptions from the edited videos with facts and they did, adding to their website their Congressional testimony and the responses to the Congressional committees and state attorneys general who opened investigations based on the initial damaging videos and coverage. At the same time, they added to their website a section on 15 years of attacks, entitled The Fanatical Crusade Against Planned Parenthood: Decades of Doctored Videos, Failed Entrapments, and False Accusations which reiterated the themes in all their communication regarding the July 2015 tapes.

The organization provided information to five separate congressional committees investigating Planned Parenthood and abortion in the U.S., including a newly created select committee. The Planned Parenthood website has copies of their responses to all committees and includes a public statement from House Oversight and Government Reform Committee Chairman Jason Chaffetz that he has uncovered no wrongdoing after examining thousands pages of material provided by Planned Parenthood to his committee. According to Planned

Spring 2016 Parenthood, it has produced over 25,000 pages of documents to the five congressional committees.

Planned Parenthood has faced 24 defunding attempts at the state level. Twelve states did defund Planned Parenthood, cutting off funding from Medicaid and Title X, a network of family planning programs. Investigations in several states are ongoing; some states concluded with no action against the organization. A grand jury in Texas indicted the videographers behind the tapes and cleared Planned Parenthood. In January 2016 Planned Parenthood filed suit against the anti-abortion group and individuals whose edited videos brought on the controversy, taking the action to protect its brand and the services it provides.

III. DIVERSIFY FUNDING SOURCES The lessons of Planned Parenthood are applicable to any nonprofit with an overdependence on government funding and expected ongoing funding from foundations and other sources. In this example, Planned Parenthood actually used the controversy to raise additional funds – another lesson for nonprofits.

Planned Parenthood consistently faces fundraising challenges, the prospect of federal defunding and

actual defunding in some states. It weathers these in part because its problems make national news and its supporters rush to fill the funding gap.

But the author of a Stanford Social Innovation Review article (see Resources) challenges the entire practice of nonprofits accepting government funding and in essence becoming government contractors: “Budgetary appropriation is a political process.

If you depend on government funding, you must recognize the danger of getting dragged into factional fights.” Planned Parenthood, and any other nonprofit with close to 50% government funding, should be prepared with a more balanced approach to funding the services they exist to provide.

Conclusion: Dealing with controversy is in Planned Parenthood’s DNA after 100 years of such challenges. Nonprofit board members in particular should consider lessons from Planned Parenthood’s long history of successes and missteps in addressing challenges to its brand and funding. With government funds dwindling and social issues political fodder, more nonprofits are vulnerable to the same kind of controversy and funding challenges it has faced.

Resources and links Planned Parenthood https://www.plannedparenthood.org “The Role of Brand in the Nonprofit Sector,” Stanford Social Innovation Review http://ssir.org/articles/entry/the_role_of_brand_in_the_nonprofit_sector “Crisis of the Week: Planned Parenthood Feels the Heat,” Wall Street Journal http://blogs.wsj.com/riskandcompliance/2015/08/04/crisis-ofthe-week-planned-parenthood-feels-the-heat/ Planned Parenthood CEO video response https://www.plannedparenthood.org/about-us/newsroom/pressreleases/planned-parenthood-president-releases-video-response-to-latest-smear-campaign “Government Contractors as Civil Society?” Stanford Social Innovation Review http://ssir.org/articles/entry/government_contractors_as_civil_society

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