Oct. 17, 2012 at 3:54 PM ET
Updated at 6:15 p.m. ET: The Livestrong Foundation – a major cancer-fighting charity known for its ubiquitous yellow wristbands – faces an inevitable decline in donations and needs to reinvent itself to stay healthy following the resignation Wednesday of founder Lance Armstrong, say two leading experts on nonprofits.
Livestrong may require a substantial rebranding and even possibly a name change, given that since 1996 the organization’s very identity has been so closely tied with Armstrong, the cycling legend, cancer survivor and accused doper, said Todd Cohen, former editor and publisher of Philanthropy Journal and a blogger on charitable giving.
“They have a lot of work to do – because of their name, because of how they are so connected with one individual,” Cohen said. “But organizations continue. The cause it’s trying to address, the need is still there. But here’s an organization that needs to work hard to reinvent itself and keep on going.”
Livestrong, based in Armstrong's hometown of Austin, Texas, said earlier that Armstrong would step down as chairman but remain on the board of directors.
In a blog post on the nonprofit’s website, president and CEO Doug Ulman said the organization is “recommitting ourselves to the work of the cancer community for the years ahead.” He called Armstrong’s devotion to cancer survivors “unsurpassable” while adding, “We are incredibly proud of his record as an advocate and philanthropist.”
Armstrong was immediately replaced as chairman by Jeff Garvey, an Austin venture capitalist and the foundation’s former vice chairman.
Livestrong, which has raised about $500 million over the years and has an annual budget of $30 million, did not respond to a request from NBC News for further comment.
The seven-time Tour de France champion, accused last week by the U.S. Anti-Doping Agency of taking part in a lengthy, sophisticated doping scheme, also offered a statement on the Livestrong blog, saying he was exiting “to spare the foundation any negative effects as a result of controversy surrounding my cycling career.”
Minutes after his resignation, Nike, one of Armstrong’s most rock-solid sponsors, announced it will nix its contract with the cyclist amid "insurmountable evidence" that he took performance-enhancing drugs. But Nike said it “plans to continue support of the Livestrong initiatives created to unite, inspire and empower people affected by cancer.”
Anheuser-Busch, which used Armstrong as a spokesman for Michelob Ultra, also said it would drop the contract but continue to support Livestrong. Late in the day Trek Bicycle announced it also was terminating its longstanding relationship with Armstrong, citing the USADA findings.
Armstrong’s decision to abandon his Livestrong leadership role likely will benefit the foundation in the short run, Cohen said. But it’s unclear whether the Livestrong’s richest contributors will continue to pump fat donations into its anti-cancer war chest.
“Generally speaking, whenever there’s some sort of controversy or scandal involving a charity, when the issues of integrity and basic values are involved, the departure of the person at the center of that controversy can only be seen as a good thing,” Cohen said. “Donors are involved with organizations because their values are in line with the values of the organization.
“If something similar happened, like a scandal at a university, people may continue to give to the university because they’re loyal to it and care about it,” he added. “But to make the really big gifts – the type of support that any nonprofit counts on, including a fundraising organization like (Livestrong) – the values of the donors and the organization have to be the same. And as Armstrong has been involved in all kinds of doping, that just is not good for an organization trying to raise money.”
Virtually every commenter on the Livestrong blog expressed unconditional support for Armstrong, with many calling him a “hero.” Some blasted USADA for its investigation while also criticizing other pro cyclists for revealing their alleged secrets about Armstrong.
But there was sadness, too: “Without Lance, the notion of survivorship doesn't even exist. Cause marketing is a direct result of Lance's advocacy and vision,” wrote cancer survivor Brienne Fisher. “It was never about the bike for me and I remain eternally grateful for the inspiration and support you and your Foundation have given me.”
There’s little doubt that Livestrong will take a hit in the wallet, said nonprofit marketing expert Hannah Gregory.
“The Lance Armstrong controversy will definitely have an impact on the public perception of the Livestrong Foundation and its fundraising efforts. The impact is (however) lessened by his resignation,” said Gregory, chief creative officer and founder of Shoestring, a national public relations and branding agency that exclusively serves nonprofits.
“Exactly how the organization handles this transition is key,” she added. “It is important that they focus on how the organization and its mission is bigger than its founder.”
Armstrong once was among the highest-paid sports endorsers, a notch below the megamillions that golfer Tiger Woods used to rake in prior to his infidelity scandal, said Noreen O’Leary, a writer covering the latest Armstrong events for Adweek. She said the cyclist also has held sponsorship deals with RadioShack and Oakley.
“RadioShack has no current obligations with Lance Armstrong," said RadioShack spokesman Eric E. Bruner. “Concerning Livestrong, RadioShack continues to be proud of what we've accomplished with our customers in generating more than $16 million to date for the fight against cancer.”
Oakley said it was reviewing the USADA report.
"Our policy with our athletes is to support them until proven guilty by the highest governing body of sport or court of law," the company said. "We are reviewing the extensive report from the USADA, as well as our relationship with Lance, and will await final decision - by the International Cycling Union."
The damning report appears to be the end for Armstrong's sponsorship career, said Bob Williams, chief operating officer of Burns Entertainment, a sports marketing firm. based outside Chicago.
“Advertisers have many choices and they will take him off their radar,” said Williams. “Fans have proven to be very forgiving toward sports stars who have stumbled in their personal lives and are contrite. However, fans don't take kindly to alleged cheaters enhancing their on-field performance.”
Nike’s decision to dump Armstrong served as a dual - and almost simultaneous - body blow to the cyclist.
Among sports marketers Wednesday, there was chatter that Armstrong's departure from Livestrong was the pound of flesh that Nike required in order to agree to maintain its support of the foundation.
Is it possible that Nike believed it would look cold-blooded if it simply cut ties with the anti-cancer charity?
“Nike has left its options open,” Williams said. “If Lance were to find a way to prove his innocence, Nike has kept their hand in, so to speak. Additionally, Nike can withdraw its support of Livestrong down the road if it so chooses with far less publicity.”
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