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by GK Strategy 16th February, 2018

Oxfam and the anatomy of a crisis

“It’s not the crime, it’s the cover up” goes the old adage about the Watergate scandal which brought down Richard Nixon. In just five days, we have witnessed a blisteringly fast loss of reputation and moral authority from Oxfam, previously one of the UK’s most trusted charities.

For an organisation known for helping others in crisis situations, the aid agency has struggled to manage and contain its own reputational crisis which erupted last Friday. The highly negative media coverage it received in the press serves as a reminder of the severe damage these situations can inflict on credibility, or even a brand or business’ chances of survival. This is a real threat for Oxfam, for whom small donations make up 28% of its income. Huge levels of negative publicity has caused a giving revolt, which could have a catastrophic impact on the charity’s cash flow. Instead of building trust with the public, Oxfam has focused its response on reassuring their political backers.

The Times article which initially broke the story went online at 12:01am on Friday 9th September. The leaked internal report explained how Oxfam staff had been involved in sexual abuse, bullying and intimidation while working for the charity in Haiti.

Three employees were allowed to resign, while four were sacked for gross misconduct according to the statement, which also assured those concerned that the Department for International Development (DfID) and the Charity Commission had been informed at the time.

Quickly, that statement became irrelevant after the Charity Commission and DfID denied they had been informed. This is the nightmare situation for any communications chief or business leader. During any crisis situation, there is a serious threat of a second revelation pushing the subject organisation deeper into crisis, causing further reputational harm. Oxfam were immediately on back foot and never regained the initiative.

Saturday brought this reality into sharp focus for Oxfam. In addition to the cover up, the Times also ran a follow up story at midday detailing how the charity had failed to warn other agencies who went on to employ the disgraced aid workers about their previous activities. It took Oxfam three hours to issue another defensive statement.

The story continued to roll on throughout Saturday. Matt Hancock, the government minister in charge of charities policy, also issued a statement criticising Oxfam.

By Sunday the damage had spiralled out of control. The Development Secretary Penny Mordaunt issued a damning rebuke and questioned whether Oxfam could lose a massive £32 million of public funding. The charity released a third statement at 2:14pm on Sunday detailing how it would make changes to prevent such activities happening in the future.

Despite this, Monday saw the first real consequences of the crisis. Penny Lawrence, the deputy chief executive resigned and took full responsibility for the cover up, as the charity held urgent talks with the Government.

Defending a brand involved in a cover-up is always going to be difficult. After all, why should anyone believe what you say? Oxfam’s tone was initially defensive, yet they ended up assigning definitive blame to one of their senior management team.

As negative stories continue to pour out, it’s unclear if Oxfam will survive and keep its government funding. Whether it can retain adequate small donor confidence in the hard times ahead will be of critical importance to its survival. It’s likely that it will – after all it can draw on the reservoir of public goodwill built up through its positive PR during the good times.

Nevertheless, it will have suffered significant, and potentially irreparable reputational damage. It is unlikely to be seen as one of the UK’s most trusted charities ever again. The lessons to all businesses and brands are clear; if you are not responsive, transparent with your message and take ownership of the issue, the reputational damage incurred can quickly turn that issue into a crisis.

Tim Swabey and Johnny Munro are reputation management specialists in GK Strategy’s Issue, Crisis and Reputation practice. For more information contact tim@gkstrategy.com or johnny@gkstrategy.com

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