is threatened, what do you sayto the press!

Medio Policv-WhotMedi6 Pol icy?

by Sandi Sonnenfeld

Dana Osborne, founder and CEOof Naturewise Apparel, pulled herbright red Saturn into a parkingspace near the entrance to her com-pany's headquarters in Seattle. Shewas eager to get to her office. Thecompany was in negotiations to ex-pand overseas, and Dana was expect-ing to hear from a potential joint-venture partner in Antwerp. Theprevious round of talks had gonewell: managers of the Belgian en-terprise had seemed enthusiasticabout launching the Naturewise lineof chemical-free natural-fiber chil-dren's wear. Today she could getthe go-ahead.

She entered the building and rodethe elevator to the eighth floor. Asthe doors opened, she could see BobHewitt, her communications man-ager, and |anet Steiner, the head ofthe Midwest division, waiting forher iust inside the glass doors of herouter office.

Dana looked at her watch. Whattime was it in Belgium, anyway?And how come fanet was there?

Bob met Dana at the door. "We'vegot a problem," he said. "It has to

do with the company's corporategiving fund."

Every year since 1982, when Na-turewise had gone public, the com-pany had donated $400,000 tocharity. The program had alwaysbeen administered by corporateheadquarters, and therecipients had alwaysbeen maior national orworldwide relief orga-nizations. This year,in an effort to includeall employees in theprogram, Dana andhersenior managers hadagreed to allow each regional divi-sion to decide for itself where themoney should go.

Dana motioned Bob and |anet intoher private conference room.

"Okay, tell me."Bob spoke slowly. "Our decision

to make our giving program more fo-cused is backfiring on us in a bigway. You know we thought of thisregional plan as a good public rela-tions move - a way of paying backthe various communities that sup-port us- "

"We don't give to charities be-cause it makes for good copy," Danainterrupted. "We do it because it'sthe right thing to do."

"I know, Dana. But we have a PRproblem now. fanet's division gaveits funds to a nonprofit umbrella cor-poration called CHICARE, whichsupports 140 social service orgaraiza-tions in Chicago and the Midwest.Un{ortunately, one of those organi-zations happens to be TermRights,a rafically pro-life group."

Dana looked over at ]anet, whoclosed her eyes.

Bob continued. "Yesterday therewas a bombing at an abortion clinicin foliet, Illinois. And you can iustguess which organization the bomb-er claims affiliation with."

"Was anybody hurt?" Dana asked.Bob shook his head. //No. But last

night a local TV news station aireda story announcing that NaturewiseApparel obviously condoned the ac-tion because we provide financialsupport to TermRights throughCHICARE. They called the corpo-rate communications office at theMidwest division, but Marc Russothere just gave them a'no com-ment.'He fid the same with the lo-cal paper, the Will County Mirror.The story came out this morning.I have a copy of it right here."

Bob put the news clipping in frontof Dana. She read it over quickly,

dismayed at the accusatory tone ofthe piece, and handed it back to Bob.

"I hate that this happened," shesaid. "I would love to see this bomb-er go to jail forever. But the bottomline is that we didn't know the mon-ey was going to this particular group,did we? " She looked at Janet. "Clear-ly, we were remiss in not checkinginto CHICARE more carefully. But

Sandi Sonnenfeld is a Seattle-basedwriter who specializes in public rc-lations for nonprofit organizations.

When your company's lma8e

"Steven Rqndoll of theChicago Daily Bulletin is onfhe line. He soys he'll hold.Whqt should I rell him?"

18 HARVARD BUSINESS REVIEW fuly-August 1994

it is CHICARE that ultimately de-cides whom to fund and where themoney goes, not us. We never ex-pected our money to go to such anorganization. We didn't want it to.We didn't know."

The room was silent. Dana couldfeel her stomach beginning to knot.

Then )anet spoke. "I should haveresearched CHICARE more thor-oughly. It gives to so many worthycauses -AIDS research, environmen-tal cleanups, shelters for the home-less, adult-literacy programs. It justnever occurred to me that we'd runinto a problem like this."

Inwardly, Dana cursed both fanetand the Midwest division for wreak-ing such havoc on the company. Butshe also knew that fanet wasn't acareless person. Hers was the top-grossing division in the company.

"I know that if this gets muchworse, you'll probably ask for myresignation, " lanet continued. "Icould make a statement to the pa-pers that I did this on my own-thatheadquarters didn't know anythingabout it. After all, it's the truth."

"We should consider that," Bobcut in, surprised at the severity ofhis own response.

"No. That's not a reasonable solu-tion," Dana said. "It wouldn't solveanything. Abortion is an emotionaltopic. Some of our customers arepro-choice; some are pro-li{e. Andeven if )anet resigned, rumors wouldcirculate that we put pressure on herto do so. That could make thingseven worse."

"We're going in circles," Bob said."We're going to need to make somekind of statement to the press - un-less you think we should continue togo with'no comment."'

A knock at the door made them alllook up. It was Caroline Gelston,Dana's administrative assistant."Darra,I'm sorry to interrupt," Car-oline said, "but Steven Randall ofthe Chicago Daily Bulletin is on theline. I said you weren't available, buthe said he'd hold until you were.What should I tell him?"HBRt cases are deilved fuom theexperiences of real companies andreal people. As written, they arehypothetical, and the names usedarc fictitious.

, rt'lf r: ,.,.'"

Kids'Store FundedClinic Bombers

A $120 million retdl-clothing chainthe group tbat has claimed: reeponsibility !Monday's bombiag of a Joliet abortion elidithe Will County Mirror has learubd

Naturewise Apparel, which is basod in Sc

tle and has regional headqua*ers in Chiprovided support moncy to TermRights,pro-life group claimirg responsibility for ibombing. In January, the company conkibr*r$150,000 to CHICARE, aa umbrclla sodiBervice orgaaizatioa. TermRights is one ofgroup6 supported by CHICABE

With 2 1 2 stores oationwide, Naturewisorcntly comnands l% of the children's ca$ialclothing madcct in fre United States. Lastit enjoyed a sales increase of l2Yo.Tbcry has built a reputation as a "greed'organiition. CEO DaoaOsborne foundedthe chainter her daughter developed a Beriouscondition caused by the rynthetic fibers inclothing. Naturewiee's apparel has alwayschemical-free and made only of natural fiPerhaps because of ib roots, the compaoyconsistently supported enviror.m entaland antiviolenee/anticrime drives olr th€tional level.

Nahrewise's contribution to TermRighq iastonishing given the oompany's usual polltically correct stance. TermRights publicly cri

doaes violence in support ofits cause. Inthe group has claimed responsibilityseveral violbat acts against abortuclinics over the past two yeafs

Naturewise refused to respond tofrom the Will County Miror. .

HARVARD BUSINESS REVIEW |uly-August 1994 t9