Lance Armstrong confesses. Can Livestrong survive? (+video)

Lance Armstrong’s story and image used to be the Livestrong foundation’s greatest fundraising asset. Now it’s a liability. Can Livestrong go on without Lance? 

By , Staff writer

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    Lance Armstrong talks to supporters prior to a run on Mont Royal Park in Montreal in this August 2012 photo. Bolstered by his celebrity, Armstrong's Livestrong Foundation became a leading nonprofit in a few short years. Now, the scandal surrounding the cyclist threatens the foundation's mission.
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As the evidence linking Lance Armstrong to doping became insurmountable last fall, the cyclist’s first step in the slog toward contrition was to distance himself from the brand that made him a household name and an inspiration to millions. 

In October, Mr. Armstrong resigned as the chairman of Livestrong, the cancer-fighting charity he founded in 1997, to which he contributed millions of his personal income. The organization changed its name from the Lance Armstrong Foundation to its alternate moniker, the Livestrong Foundation. In November, he cut ties completely, resigning from the board of directors.

It was, of course, a move designed to contain the damage that Armstrong's increasingly toxic public image could wreak on the foundation. But Livestrong the brand is inextricable from its founder. It was designed that way, and aligning the charity with Armstrong’s story of survival and athletic triumph helped turn Livestrong into one of the most recognizable names in the charity world in a few short years.

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So as Armstrong's televised confession with Oprah airs Thursday night at 9pm ET online and on the OWN Network, where does Livestrong go from here?

Livestrong in the hot seat

While the charity hasn't been accused of breaking any laws, Livestrong has faced its share of scrutiny resulting from its association with the disgraced cyclist. Most recently, a New York Times magazine piece published Sunday by Stephanie Saul examined the symbiotic relationship between Livestrong and Armstrong, questioning whether such close alignment was appropriate and in the best interest of the community Livestrong is purported to serve.

“While Mr. Armstrong’s celebrity fed the charity, the charity also enhanced his marketability,” the piece reads. “Livestrong also engaged in some deals that appeared to have benefited him and his associates, according to interviews and financial records.”

The story goes on to detail the foundation’s glitzier aspects, including a "founders' circle" complete with Tour de France finish line tickets for donors, the swanky loft space that serves as headquarters in Austin, Texas, and the fad of those ubiquitous yellow wristbands. “As the foundation grew, some supporters felt it had become too glamorous, overly focused on branding, image and public relations,” Saul writes.

“We are, in fact, proud of our record of providing a trailblazing example of how innovative non-profits can think like for-profits, reach new audiences, find ways to ensure the health of their organizations and, in the end, produce even greater results for the needs they serve,” Livestrong said in a statement responding to the Times piece. “We have always complied with both the letter and the spirit of all laws, regulations and reporting requirements in all of our work.”

The charity as brand

Livestrong’s methods of using celebrity and branding to increase a charity’s brand name aren’t uncommon, argues Joe Waters, who blogs about philanthropy marketing at selfishgiving.com

He points to Project RED, the AIDS-awareness charity partnered with U2 frontman Bono, as well as corporate sponsors including the Gap and Starbucks  “Look at St. Jude, or Susan G. Komen,” he says.  “When you can do that type of marketing it grows your brand awareness so quickly. These organizations have become international philanthropic brands in less than a decade.”  

He compares that to an organization like the Salvation Army – “It’s very well-known, but it took a century to get there. [Project Red] did it in seven, and they have the Gap to thank for that. ”

Another advantage: the increased visibility and brand partnerships allow the foundations to spend less money on raising awareness, boosting the amount that goes toward programs. Livestrong consistently rates highly with a wide array of charity watchdog groups. It earned a perfect four out of four stars on Charity Navigator, is fully accredited with the Better Business Bureau’s Wise Giving Alliance, and earned an “A–“ rating from Charity Watch.

The downside of a fast rise is when the public opinion fueling a charity sours. It happened with Susan G. Komen for the cure, which stirred up controversy last year by pulling funding from Planned Parenthood. The foundation saw a subsequent drop in attendance for its nationwide “Run for the Cure” fundraiser –  attendance at this year’s race in Washington dropped by a third, according to NPR.

Moving forward

Livestrong, has raised nearly $500 million for cancer-related causes over its 15-year existence, but it has cut its 2013 budget by 10.9 percent from 2012.  Waters expects the foundation to survive, but probably not as visibly.

“Livestrong has really stood out the past few years as the top cancer cause out there,” he says. “What you’re going to find is post-Lance, it will still be a good organization, but its not going to be the top force that it was. It lost its luster.”

But Ken Berger, president and CEO of Charity Navigator, an evaluator of nonprofits based in Glen Rock, N.J., argues that Livestrong has been slowly weaning itself off Lance Armstrong for the past few years. “They have been trying to create a separate identity recently as much as they can,” he says. “But now that things are really coming to a head, they really are being hurt. Big corporate money has stepped back, and with even those remaining, it’s not clear they will continue that commitment. We anticipate that the next time we see an IRS filing, their financials will not be as strong.”

Berger points out that even the appearance of a conflict of interest can be a problem with charities tied to a celebrity figure. “When it’s used as a vehicle to promote themselves, or their incomes are intertwined with the nonprofit, That’s where we see the trouble happens," he says. 

But he still thinks that Livestrong’s is a cause worth saving. “There is a core of people who are very committed to Livestrong. We you take all that the extra stuff away and look at how they fulfill their mission, they do a lot of really good stuff," he says.  "We hear so many great things about the service and programs they provide.  So I hope they learn from this and that they do survive.” 

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