Lifeline's uncharitable act

The charity sector must be furious with Lifeline Australia.

Lifeline's heavy-handed campaign to force Telstra to continue to funding it, rather than other charities, undermines not only Lifeline's future but corporate giving generally.

Telstra has supported Lifeline -- a phone counselling service -- for the past 12 years by providing free calls valued to the tune of $10 million.  Telstra's management decided to redirect its support to other charities and gave notice to Lifeline three years ago.  That's right, three years notice!

Of course, this was a blow to Lifeline, which does provide a very worthy service.  However, so do many of the 2000 not-for-profit organisations currently supported by Telstra.

Instead of working to get an alternative sponsor or source of funding, Lifeline decided to wage a campaign to embarrass Telstra through the media and in federal parliament.

In short it conducted a classic reputation ambush.  First it ensured that stories about its loss of funding and its good services surfaced shortly after Telstra's profit announcement.  It briefed Federal Politicians in time for them to grill and embarrass senior Telstra executives appearing before the Senate Estimates Committees.  And it got federal politicians to promote legislation which would force Telstra to fund it.

Though charities frequently wage such campaigns against governments when their funding is threatened, it is difficult to recall a single case of when such a campaign has been waged against a corporate sponsor.

This is a dangerous precedent for the charity sector as a whole.

In recent years, governments and the not-for-profit sector have been encouraging corporate philanthropy;  where companies are encouraged to give more money to the not-for-sector.  Telstra's Lifeline PR nightmare will serve to make companies far more hesitant in the future about getting involved in such sponsorships.

Lifeline Australia's behaviour is threatens all charities.  It violates a bedrock principle of receiving corporate money -- that is, not to attack a corporate donor who chooses to either decrease or cut your funding.

Aside from reeking of ingratitude it's an important principle for two reasons.  First, this sort of behaviour is unethical.  No matter how valuable you think your work is, "the ends does not justify the means".  Lifeline is clearly a worthy cause and has done much good work throughout its history.  The problem is that you can say that about many good charities out there and Telstra is perfectly entitled to seek those other charities out.

Second, it is counterproductive because right now, the problems being faced by Telstra is experiencing courtesy of Lifeline are being noticed by every corporate affairs person in Australia;  they are usually the person in a company who hands out sponsorship dollars.

So while Lifeline may be able to claim a victory, it will be a hollow victory because having seen the trouble that Lifeline has caused Telstra, what business in their right mind would commit to any sponsorship with the current management of Lifeline?

In all of this furore, politicians at both federal and state levels and all sides of politics have been quick to indulge in a bit of Telstra-bashing.  They have been only to pleased to bash Telstra in defence of Lifeline which some argue provides an "essential service".  That may be so.

But that does bring us to an important issue.  If Lifeline is an essential service as these politicians argue it is, why aren't they funding the service adequately?  It is true that both the Federal Government has recently given Lifeline a $10 million grant to upgrade systems and the Victorian Government has announced an increase in its contribution.  But the question still remains why is such an "essential service" dependent on corporate generosity to make up any shortfall in government funding?

Just like corporations, charities have to worry about their reputations.  Lifeline Australia's behaviour in this episode has not done its reputation any good.

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