Lance Armstrong, founder of the LIVESTRONG foundation. The group that helps cancer survivors is watching its donations tumble along with the bicycling great’s reputation. (Lucas Jackson / Reuters)

The big idea: With the completion of the 100th Tour de France, memories resurface about the doping controversy surrounding the famed race and the most famous cyclist of all, Lance Armstrong. The innocent bystander in all of this is Livestrong, the cyclist’s foundation. The nonprofit group’s goal is to improve the lives of people with cancer. Fulfilling this mission has been a struggle as Livestrong battles its own malignancy following Armstrong’s admission to doping. What’s an organization to do when the celebrity founder impedes the mission?

The scenario: Doug Ulman, chief executive of the nonprofit organization Livestrong, contemplated his next steps in the midst of the doping controversy that surrounded the organization’s founder, biggest advocate and visibility maker, Armstrong. Facing potential threats to their funding from benefactors such as Nike, Ulman was concerned for the future and sustainability of Livestrong. A cancer survivor, Ulman and his team were committed to the organization’s mission to support cancer survivors, yet Livestrong’s own ability to survive was in question.

Founded in 1997, Livestrong focused on survivorship: programs and services aimed at easing the personal and practical hardships that come with cancer. The organization was an early success, with revenue of $9 million in 2001, peaking in 2005 at $52.5 million after Armstrong’s seventh Tour de France win. At that time, there was a deliberate shift to focus on the organization’s name and motto “Live Strong” and to rely less on the celebrity of Armstrong himself.

By 2013, Livestrong had grown to be one of the largest and most respected nonprofits in the United States. However, when the doping allegations surfaced in 2010, donations to Livestrong fell 27 percent. Ulman feared that with Armstrong’s 2013 admission to doping, donations might fall to such a level that it would be difficult to recover.

To minimize the damage to Livestrong, Armstrong resigned as board chairman and eventually from the board altogether in 2012. On the day he resigned his chairmanship, Armstrong was dropped by two sponsors, Nike and Anheuser-Busch, and five others soon followed suit. The controversy had been a distraction for Livestrong and its leadership — the affiliation with Armstrong had become a major liability. Ulman needed to separate the man from the cause in the eyes of the public and address a variety of challenges: bad publicity, media scrutiny and the erosion of financial support.

The resolution: Ulman made a concerted effort to get out in front of the media and attempt to manage the message. Unlike many organizations that make the mistake of hiding from the negative press or being defensive, Ulman and his team were responsive to the media and candid with key stakeholders about their disappointment with Armstrong but commitment to the Livestrong cause and its beneficiaries.

The lesson: Livestrong’s challenge is not uncommon. All organizations are subject to negative publicity and scandal, and increasingly so because of the proliferation of social media. What makes the Livestrong situation particularly disruptive is that in the minds of the public, Livestrong is closely tied to its founder and thus rides the reputational waves of Lance Armstrong. Other organizations that align themselves with celebrities, such as Nike and Tiger Woods, or are founded by a celebrity, such as Martha Stewart and Martha Stewart Omnimedia, run the risk associated with the fallibility of their leaders. To lessen the potential damage, organizations need to consider a marketing and communication strategy to address the nature of the alignment between the celebrity and the organization. In addition, a business continuity plan can ease the burden of sustaining an organization in crisis.

Erika Hayes James

James is senior associate dean for executive education and professor of business at the University of Virginia Darden School of Business.