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Life After Lance

By The NonProfit Times - November 1, 2012

Livestrong had been planning for life after Lance at some point – perhaps just not this soon.

Renowned, and sometimes reviled, world-class cyclist and cancer survivor Lance Armstrong stepped down on Oct. 17 as chairman of the board of the foundation that bears his name. He will remain on the 16-member board of the Austin, Texas-based nonprofit.

Longtime sponsor Nike terminated its contract with Armstrong but will remain active in supporting the charity while Vice Chairman Jeff Garvey, the founding chairman, will take over as chairman.

The announcement came one week after a damning report was released by the United States Anti-Doping Agency (USADA) that included testimony from 11 former teammates about widespread doping in cycling competitions. The USADA has moved to erase all of Armstrong’s records during his 14-year career. “To spare the foundation any negative effects as a result of controversy surrounding my cycling career, I will conclude my chairmanship,” Armstrong said in a statement released by the foundation.

In no way can Armstrong’s resignation be perceived as good news. “It’s a negative for them,” but the foundation “did all sorts of smart things to create their brand, and make it larger than the athlete who founded it, and that’s good,” said David Hessekiel, president of the Cause Marketing Forum in Rye, N.Y.

“They’ve definitely built an organization that is far more than just a monument to Lance Armstrong, and so I believe that they should be able to persevere. The question is what will the relationships be with corporate America,” he said.

The foundation marked its 15th anniversary in October with a series of events in and around Austin, just days after Armstrong’s resignation. The 41-year-old was diagnosed with testicular cancer in 1996 but came back to win a record seven Tour de France titles from 1999 to 2005. Contributions in the early years of the foundation barely reached seven figures. It wasn’t until the ubiquitous, yellow Livestrong bracelets took off in 2004 that the money started pouring in, with contributions jumping to $20 million a year. Revenues peaked at $52 million in 2005 but still often eclipse $40 million.

“It’s kind of like the rocket we used to go to the moon. Lance gave Livestrong a huge lift-off but that part of the rocket is largely spent and needs to be jettisoned so Livestrong can continue on its journey,” said Joe Waters, a Boston, Mass.-based cause marketing consultant and blogger. “Livestrong will press on with its mission and return safely from this challenge,” he said.

The bottom line is that Livestrong will have to function without a celebrity figure, “but many organizations do and it’s not an issue,” said Waters. “It still has a strong brand and a supportive community of millions that will still make it a compelling partner for companies. But, it won’t be the iconic brand it once was,” he said.

Waters doesn’t expect the backlash from the general public to be too great. “Livestrong has a life of its own and a strong and supportive community,” he said. “Comments I’ve seen from supporters have leaned toward, ‘You may have done a bad thing, Lance…but you’ve also done a lot of good.’”

Technically, it’s still the Lance Armstrong Foundation (LAF) as far as the Internal Revenue Service (IRS) is con­cerned, but most everyone now just calls it as Livestrong. The organization re-branded several years ago, focusing less on Armstrong and more on cancer support and advocacy — as well as merchandising and licensing.

The foundation rocketed to stardom on the strength of yellow “Livestrong” bracelets that were seemingly everywhere after Nike and its ad agency, Weiden + Kennedy, produced 5 million of them in 2004. But $1 bracelets can’t pay the bills forever. In recent years, the charity has branched out, diversifying its revenue streams by licensing the Livestrong brand – including naming rights for a soccer stadium — and sponsoring the Livestrong challenge, athletic fund­raising events around the nation. In 2010, the operations of three supporting organizations (events, merchandise and endowment) were merged into the foundation. The charity generated $16 million in license fees last year, according to its federal Form 990, and total revenue of almost $49 million. It has an endowment worth about $30 million.

“Long before he became a household name, Lance Armstrong created a foundation to serve others facing the same fears and challenges he struggled to overcome as a result of his cancer diagnosis,” Livestrong President and CEO Doug Ulman, who oversees the day-to-day operations of the charity, said in the statement. “Today, thanks to Lance’s leadership, that foundation has had the privilege of raising close to $500 million to serve people affected by cancer,” he said. In its statement, Nike said it plans to continue to support Livestrong initiatives but terminated his contract “due to the seemingly insurmountable evidence that Lance Armstrong participated in doping and misled Nike for more than a decade.” NPT

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