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Charities In Risky New Territory - Opinion

21 March 2005 at 12:03 pm
Staff Reporter
When Lifeline went public about Telstra pulling its financial support, the furious public debate that followed saw an unprecedented corporate back flip. Don D'Cruz says this sees charities in risky new territory.

Staff Reporter | 21 March 2005 at 12:03 pm


Charities In Risky New Territory - Opinion
21 March 2005 at 12:03 pm

Charities In Risky New Territory – Opinion

When Lifeline went public about Telstra pulling its financial support, the furious public debate that followed saw an unprecedented corporate back flip. Don D’Cruz from the Institute of Public Affairs says this sees charities in risky new territory.

Here’s his view on the topic:

Telstra has reversed its decision to stop funding Lifeline Australia but the strategy employed by them will do their organisation no favours in the future.

Lifeline’s aggressive, public campaign to force Telstra to continue to funding it, rather than other charities, undermines not only Lifeline’s future but the future of corporate-giving generally.

For some 12 years Telstra has supported Lifeline – a crisis counselling phone service – by providing free calls valued to the tune of $10 million. Then Telstra’s management decided to redirect its support to other charities and gave notice to Lifeline three years ago. That’s right, three years’ notice!

Naturally, this was a major setback to Lifeline, which does provide a very worthy service. However, the same can be said for many of the 2000 not-for-profit organisations currently supported by Telstra.

What Lifeline Australia did then to reverse the decision was extraordinary. Instead of concentrating its efforts on getting an alternative sponsor or source of funding, Lifeline decided to wage a campaign to embarrass Telstra through the media and in Federal Parliament.

Its strategy was essentially one designed to inflict damage to the corporate reputation of their corporate sponsor on the eve of their support ending. First, it ensured that stories about its loss of funding and its good services surfaced shortly after Telstra’s profit announcement.

Then it briefed Federal politicians in time for them to grill and embarrass senior Telstra executives appearing before the Senate Estimates Committee. It was a remarkably cold and calculating ambush that gave their long-time corporate sponsor no time to react.

Though charities frequently wage such campaigns against governments when their funding is threatened, it is difficult to recall a single case of when such a campaign has been waged against a corporate sponsor.

This is a dangerous precedent for the charity sector as a whole. It is difficult to see how anyone in the not-for-profit sector would approve of the strategy that Lifeline adopted. In fact, some in the sector are probably furious at Lifeline Australia.

In recent years, governments and the not-for-profit sector have been encouraging corporate philanthropy; where companies are encouraged to give more money to the not-for-sector.

At a federal level, this has been done under the aegis of the Prime Minister’s Business-Community Partnerships program. Telstra’s Lifeline PR nightmare will only serve to make companies far more hesitant in the future about getting involved in such sponsorships.

Lifeline Australia’s behaviour violated the unwritten rule of receiving corporate money – that is, not to attack a corporate donor who chooses to either decrease or cut your funding.

Aside from reeking of ingratitude it’s an important principle for primarily two reasons. First, this sort of behaviour is unethical. No matter how valuable you think your work is, “the ends does not justify the means”.

Lifeline is clearly a worthy cause and has done much good work throughout its history. The problem is that you can say that about many good charities out there which the same thing can be said about. And Telstra is perfectly entitled to seek those other charities out and fund them instead of Lifeline.

Second, this type of strategy is counterproductive and ultimately self- defeating because right now, the problems Telstra experienced courtesy of Lifeline have been noticed by every corporate affairs person in Australia; they are usually the person in a company who hands out sponsorship dollars. So while Lifeline may be able to claim a victory, it will be a phyrric victory because having seen the trouble that Lifeline has caused Telstra, what business in their right mind would commit to any sponsorship with the current management of Lifeline?

Don D’Cruz is a Research Fellow at the Institute of Public Affairs. He has a B.A. (Hons) from Monash University in politics and a M.A. from the Australian National University in strategic studies. He has worked as a media adviser for a Federal politician and worked as a public relations and political consultant.

His area of expertise is researching non-government organisations. His particular areas of interest are their governance, finances, organisational structure and strategy and tactics.

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