DATELINE: January 5, 2011, Chicago
Like many Americans, we get much of our news from Jon Stewart and Stephen Colbert. This past Monday, Colbert came back from his extended holiday break. He certainly caught our attention during his Tip of the Hat, Wag of the Finger segment, reporting that the Susan G. Komen For the Cure (SGK), a well-known charity that funds breast cancer research and provides assistance to those diagnosed with breast cancer, was suing other charities that had incorporated “the Cure” into their names or promotional efforts.
In following up on Colbert’s crack reporting, we found that while Colbert had awarded SGK a...
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Jack Siegel's book, A Desktop Guide for Nonprofit Directors, Officers, and Advisors: Avoiding Trouble While Doing Good, has quickly become the go-to guide for nonprofit executives and advisors. So what are people saying about the Guide? In the October 2007 edition of the The Federal Lawyer, New York lawyer George W. Gowen and nonprofit authority, wrote:
Some of our readers have followed the link to the Amazon.com Web site, but apparently have not bought the Guide. If they were turned off by the price, they should reconsider. One prominent attorney in the exempt organization field grabbed a review copy of the Guide and couldn't put it down. She has instructed a number of her clients to buy it, pointing out to them that for less than 1/2 hour of her billable time, they receive a lesson (and resource) that tells it like she would like it told. If you are starting a new charity, the Guide could save you thousands of dollars in legal fees by teaching you how to better utilize your legal counsel and framing the issues so you don't spin your wheels at $400 an hour.
Tip of the Hat, others thought a Wag of the Finger was the more appropriate response. The Wall Street Journal carried an article last August describing the trademark litigation in detail. Clifford M. Marks, Charity Brawl: Nonprofits Aren’t So Generous When A Name’s at Stake (August 5, 2010). That article quotes Mary Ann Tighe, a representative of Kites for a Cure as saying “We cannot allow ourselves to bullied to no purpose.” SGK and Kites eventually reached an agreement, but Tighe didn’t sound particularly happy about the result.
According to the Huffington Post, SGK has filed “legal trademark oppositions” against over 100 smaller charities that have included “for The Cure” or a variation thereon in their name or promotions. Laura Bassett, Susan G. Komen Foundation Elbows Out Charities Over the Use of the World Cure (December 7, 2010). The Huffington Post article suggests that the cost of protecting SGK’s trademarks may be close to $1 million a year. We reviewed the Form 990 for one of charity carrying the SGK name, but given the number of organizations bearing the Komen name and the lack of detail regarding legal expenses on the return we reviewed, we are unable to verify that suggestion.
What we do know is that there are lots of comments accompanying these articles that are highly critical of SGK’s practices. Some people say they will never give to SGK again. Others seem to be shocked that SGK would “pick” on small fry. Others take the opportunity to bash SGK for reasons that are totally unrelated to the subject of the articles--that's typical Internet etiquette.
Our verdict: Like Colbert, we give SGK a tip of our hat-although our tip is a little more sincere than Colbert’s. We have no idea whether SGK is an effective or efficient charity. For present purposes, that doesn’t matter. We like to see a charity acting in a business-like manner. SGK, like other charities, is organized as a nonprofit, but that designation focuses on how surplus (revenue over expenses) is handled. Businesses distribute it to equity-holders, while charities are supposed to plow back any surplus into mission.
Nonprofit, however, does not mean that to be a charity, the organization must operate at a loss or fail to protect its assets. In this day and age, intellectual property, including trademarks, represents important and valuable assets. Millions of dollars can be invested in a trademark. Moreover, trademarks are synonymous with goodwill. Any organization, be it a Fortune 500 corporation or a charity, must protect its reputation. We think all charities would be well served to adopt business-like practices in running their operations and protecting their assets. There is nothing wrong with SGK enforcing its rights.
In one article, a SGK official noted that confusion over the name could lead a large donation to be made mistakingly to the wrong organization. We have previously written about the problems that can arise when donors are not careful in specifying in their wills the full and proper name of the organization. SGK has legitmate concerns.
There are two important lessons that serve as caveats to our praise. First, taking the sort of action that SGK did will inevitably result in the sort of hostile responses that we read on the Web. Any charity that considers enforcing its rights must consider the negative consequences of acting in a manner that many naïve people (including potential donors) will characterize as uncharitable. In SGK’s defense, it claims that it has made its “cease and desist” requests with the gentle hand of persuasion before resorting to lawsuits. Nevertheless, all organizations should factor into any decision potential adverse reactions from members of the public.
Second, charities might want to rethink their decision to open their websites up to comment on an unregulated or unmoderated basis. When we reviewed the SGK website last night, we took a look at the message board. One person who was upset about SGK’s actions to protect its trademark added the following comment to every discussion thread we reviewed:
Susan G. Komen Foundation has decided they own the phrase "For a Cure", and they are suing--that's right suing--other charities for using this phrase. They also believe they own the color pink.
Are we a little greedy, Komen?
Since I cannot see what this has to do with curing cancer, I will not be donating any more of my time, effort, and money to Susan G. Komen Foundation.
When we reviewed the SGK website today, this comment had been removed from the discussion threads we reviewed. Although SGK acted quickly, who knows how many visitors to the message board encountered this unfavorable message. Once again, it is a question of balance. The discussions on the SGK message board appear to be robust, which suggest that the board acts as a magnet, probably drawing at least some visitors back to the site on a repeated basis. That’s good both for SGK’s mission (educating people) and fundraising. However, the unregulated nature of the message boards permits those who disagree with SGK to use the site as a sword. Organizations should give second thought to moderated discussions to protect themselves--although that comes with obvious costs.
We do have one criticism for SGK. We don’t blame them for removing the comment from every discussion thread. However, we think SGK should have opened one thread, placing this comment as the lead one. In our view, SGK would strengthen its position and creditability by accepting the fact that someone disagreed with them. Moreover, they probably would have gained some insight into the concern, permitting SGK to tailor its response to adverse publicity that goes far beyond their site.
UPDATE [A reader has pointed out that SGK does have an thread on its messages boards that addresses the protection of the trademark. A lot of comments have been posted and an adminstrator has responded. Kudos to SGK]
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