Is your organization sponsored by or receiving funding from Wells Fargo?
As you’re likely aware, earlier this month the Consumer Financial Protection Bureau ordered Wells Fargo to pay $185 million in fines and penalties to settle "the widespread illegal practice of secretly opening unauthorized deposit and credit card accounts."
Allegedly, 5300 employees, pressured to sell a minimum of 8 services or financial products to customers, opened more than 2 million fake accounts, even creating false email addresses and passwords, so they could hit sales targets and earn bonuses.
Wells Fargo has terminated the employees and returned $2.6 million in fees, apologizing to customers.
As the news plays out and repercussions before the Senate Banking Committee and in the media unfold, you have a decision to make. Will you keep those dollars or return them?
The implications for your organization are numerous and far reaching, and you’ll want to have heart-to-heart discussions internally and with your board. Here are 5 points to get you started.
- Brand alignment. A bank’s brand, foremost, is about trust. So is yours. What Wells Fargo’s employees reportedly did is not just scandalous; it’s flat out illegal. Do you want your organization affiliated with an institution with such widespread behavior, especially if criminal charges are pursued?
- Endorsement. While nonprofit sponsorship practices usually stop short of endorsement of a company or its products and services, there is certainly an implication. After all, even if a company invests in a generic package (which I don’t recommend) and you simply stick their logo on your event invitation (also don’t recommend), aren’t you saying something about your relationship with the sponsor? Isn’t there a subtext that says you and the sponsor have an agreement, a formalized business relationship, and to whatever degree, you’re in an alliance with each other?
- Policies. While not every revenue strategy project I work on with clients is about corporate sponsorship, every sponsorship project does include the development of policies with my clients. One of those policies is about industries and companies that would be a good fit. I’ve engaged in such discussions with environmental, education, cultural, hospital, healthcare, and many other sectors. I’m preparing for this same discussion with an organization that helps prevent obesity.
As you can imagine, with this client, we’re going to talk about soft drinks and fast food and candy manufacturers, categories likely to raise red flags in the context of their work.
So what’s different with Wells Fargo?
- Crisis communications. What’s your communications plan? What will you tell your employees? What will you tell constituents? What if this blows up even further? You and your communications team and board need to figure out how you’re going to address potential backlash from your clientele.
- Relationship. What is the future of your relationship with your contact at Wells Fargo? The employees who allegedly scammed customers have been fired, and hopefully the company has contained the crisis. Your contacts at Wells Fargo are probably as concerned as you are about what’s happened. This is the time to be a great partner and talk to them. Hopefully, they lived up to their role as a partner and have already reached out to you.
Organizations, particularly in sensitive sectors like education, the environment, and government, agonize over involving the corporate sector in their organizations. (See a previous post on sponsor apocalypse for detail.) It’s easy to point fingers at the obvious targets.
The same holds true here. Wells Fargo violated trust, plain and simple. It needs to earn our trust back and not on the backs of nonprofit organizations.
I'd love to hear your thoughts. What will your organization do next?
If your organization is struggling to sort out your position on this and other sponsorship issues, let's talk.