Saving a Nonprofit From a Watery Grave
from
January/February 2006
by Colin Leinster
When
Bruce Wigo realized he needed help in the boardroom, he reached back
nearly half a century to his New Jersey childhood and a former swimming
rival, Dennis Carey. The two met when they were 8-year-olds at the Sea
Isle City Swim Club on the Jersey Shore, competed in many races,
including the 50-yard breaststroke for those under age 10 at the John
B. Kelly Pool in Philadelphia (see the group photo at far left to find
out who did better), and as teenagers shared lifeguard duties in Ocean
City, New Jersey.
They’ve been in sporadic contact ever since, often through swimming events, and have followed each other’s careers in and out of the water. Carey, who swam the daunting English Channel in 1980, became an executive recruiter. As a consultant for the Spencer Stuart search firm, he helped put together a spanking-new board for scandal-ridden Tyco International a couple of years ago, something he described in a book he co-authored with management guru Marie-Caroline von Weichs, How to Run a Company. Wigo’s career has included three years as coach of the Virgin Islands swimming team, a decade of practicing law, 12 years as head of U.S.A. Water Polo, then a year as an entrepreneur. Last spring he was offered the chief executive’s post at the International Swimming Hall of Fame in Fort Lauderdale, Florida.
All this goes to explain a phone call Wigo made to Carey soon after he decided to take the Hall of Fame job. He had read How to Run a Company and was particularly intrigued by the chapter that described how Carey and Edward D. Breen—whom Carey had recruited to succeed the disgraced (now jailed) Dennis Kozlowski as Tyco’s chairman and CEO—had managed to persuade all of Tyco’s directors to step down. The exodus left Breen free to work with a new board untainted by past events. This was exactly what Wigo wanted to do at the Hall of Fame. (Well, almost—he intended to keep a couple of its 24 directors.)
Not unlike Tyco, in Wigo’s view, the organization was drowning in a mess of its management’s own making while its board dozed on.
At the most basic level, the Hall of Fame was running out of money. Revenues from sponsorship and fundraisers were drying up, membership was shrinking, and the customers at the pro shop were down to a trickle. To stay afloat, the organization had siphoned cash from its endowment, draining it to about $140,000, Wigo says, from more than $1.8 million at its peak. The goodwill the Hall of Fame had enjoyed with the city of Fort Lauderdale had soured too—not surprising, since management and board were openly looking around for a new home. The Hall of Fame’s museum, meanwhile, once a hot draw, was reflecting all this gloom and doom and looking ever frumpier. By the time Wigo was hired, visitors averaged just four a day.
While the woes of this particular nonprofit might seem ho-hum to America at large, they were very disturbing to the country’s tightly knit swimming community. Founded in 1964 by a group of swim coaches, the Swimming Hall of Fame—it added “International” in 1968—served as a shrine to this proud sport, and the exhibits contained all kinds of memorabilia, including films and ephemera, that celebrated some of its greatest practitioners. One of these was Johnny Weissmuller, recognized by much of the world as Tarzan but revered by swimmers as the winner of five gold medals in the Olympics of 1924 and 1928. Before he died, Weissmuller gave those five medals to the Hall of Fame, which put them on permanent display along with sundry loincloths, safari garb, and other costumes he’d worn in his movies. More recently, an even greater attraction than Weissmuller was Mark Spitz, who won seven gold medals at the 1972 Olympics—a record to this day. He kept the medals—“They’re in a bank vault,” he says—but loaned the museum a lot of other personal effects, such as signed photographs, his Olympic blazer and swimsuits, and even the starting block he used at the Games. A statue of Spitz, which he once joked made him look like Robert Goulet, stood in the pro shop, placed so that visitors could have their photos taken next to him. Not that many had been posing in recent years.
The Hall of Fame’s decline finally led Spitz to write to the board in early 2004 and tell them that he had no confidence in then-CEO Sam Freas. “If there is no change in leadership in 60 days, I hereby direct the board to terminate my status as an honoree. Additionally, I request the return of all of my personal effects,” he wrote. More than 20 of the Hall of Fame’s best-known honorees sent similar letters, including Donna de Varona, who won two Olympic gold medals in 1964. “I deeply regret having to write this letter,” she said. “I want to let the board know that my decision is based on a sincere hope that the board will find a way to make ISHOF [the International Swimming Hall of Fame] the inspirational organization [it used to be].” Like Spitz and others who wrote, de Varona asked that her memorabilia be returned to her.
Sam Freas moved on after the arrival of all these letters, and the memorabilia stayed put. At least most of it did. In December 2004, it was discovered that de Varona’s items were missing. So were Weissmuller’s gold medals, which had been replaced with cheap imitations.
The Hall of Fame was leaderless for several months while directors argued over who should get the job. Even though Wigo had proved to be an adept money-raiser while at U.S.A. Water Polo, he says he was a long-shot candidate to be the next CEO.
Dennis Carey had read about the problems at the Hall of Fame, but only after Wigo called to say he’d been picked for the job did Carey understand the depth of the institution’s plight. Not the least of it was that the board had agreed to give Freas a severance payment that would have all but wiped out what was left of the endowment.
Freas had no comment. “I’m in litigation and it’s not in my best interest,” he said. He referred questions to Atlanta attorney John Ebert, 54, whom he’d invited to serve as the Hall of Fame chairman some years back. Like Carey and Wigo, the two are old friends with a common aquatic background on the Jersey Shore—in their case a beach patrol in Wildwood. Ebert would not discuss the suit but laid the tiff with Fort Lauderdale at the door of fundraising, a perennial challenge for the institution. Discussions about moving had always depended on the readiness of a developer to include a new Hall of Fame in a new project. “It was just one thing we looked at as a possible way of securing cash flow,” Ebert said. “We were looking at other things too.”
Ebert was still chairman when Wigo was offered, and accepted, the CEO job. Not that Wigo wanted it that way. He talks fast and enthusiastically whenever swimming is the subject at hand—and with him it usually is—and the phone call to Carey was no exception. Wigo quickly got to the point. He wanted a replay of what Carey had pulled off at Tyco, an ousting of the current board, including Ebert, and he was in a hurry to get started. Carey told him to slow down. For one thing, Wigo hadn’t yet officially taken over as CEO, so it might be premature to ask the directors to resign. As Carey reminded him, these were the guys who were hiring him, after all.
Carey did agree to help Wigo persuade the board members to resign and to find new ones to take their place, and said he’d do so on a pro bono basis. (As it turned out, the “pro bono” was to cost Carey $15,000 of his own money.) He also consented to serve on the new board, but disagreed when Wigo floated the idea that one or the other of them should be chairman. “I told him we needed a magnet for that role,” Carey recalls. “Somebody very special, with the gravitas and reputation that would enable us to recruit whatever other board members we needed.” It was obvious to Carey who that magnet was. His next words to Wigo were, “Where’s Mark Spitz right now?”
Wigo recognized Spitz’s pulling power, but would he do it? Spitz was “clearly totally disenchanted with the Hall of Fame, and threatening to remove his memorabilia might mean he’d essentially pulled the plug on it,” Wigo recalls telling Carey. Carey—who rarely takes no for an answer when he has one empty job to fill, let alone a lot of them—was less sure. Besides, he was thinking about restoring the Hall of Fame to its past glory. “I knew if we could get Mark back, it would change the tide,” he says.
Wigo did bide his time before telling the directors he wanted them out. Well, he bided a wee. The night before the special board meeting last May at which he was officially appointed CEO, he gave the directors a copy of his favorite chapter from How to Run a Company. He’d also told a select few what he was going to ask for, he says. Moments after his appointment, Wigo informed the 21 board members present that if he were to do the job they were hiring him to do, he needed them all to resign.
This went down like a belly flop with half of them, according to Wigo, who says a straw poll gave his proposal a slim lead of 11 to 10. At this point he placed a conference call from the Hall of Fame auditorium, where the board was meeting, to Dennis Carey, who was at Spencer Stuart’s offices in New York City. Wigo also brought in Kenneth L. Blanchard, author of the bestseller The One Minute Manager and an associate of Carey’s who they both thought would help their pitch.
Ebert’s account of this meeting is somewhat different. In particular, he doesn’t remember the straw vote at all. But it’s clear that he was ready to move along himself. He describes a long period of divisive politics, critical media attention, and unpleasant e-mails that, he says, “was all too much for me.”
During the conference call, Carey spoke to the directors first, followed by Blanchard, who was in his San Diego office. Carey drew parallels to Tyco, saying that if the whole Hall of Fame board resigned it would help the organization rebuild trust among its stakeholders, who included fans of the sport and disenchanted honorees. He said that a mass resignation would indeed mean good people had to step aside, but that Wigo needed the clean slate. Blanchard compared the situation at the Hall of Fame to a house with termites. Sometimes, he told the board, you have to pull a structure down and rebuild it from scratch. After an hour of debate, the issue came up for a formal vote. The directors were unanimous; they would all step down.
Now it was time to call Mark Spitz, the magnet Carey needed to put a new board together. Spitz was at his home in Los Angeles. The star athlete has led a varied life since 1972. After his Olympic triumph, he yanked his plan to go to dental school, signing on instead as a corporate spokesman for a number of companies (including Schick, for which he shaved off his moustache). A short Hollywood career fizzled. He dabbled
in real estate. Now he’s a licensed stockbroker and financial adviser and delivers motivational speeches. He has completed the voiceover for an upcoming documentary about Moscow’s brutal treatment of the Hungarian swimming team after their country rose against the Soviet Union in 1956. He’s involved in marketing a new line of expensive Italian-made in-ground swimming pools. In other words, Spitz was keeping busy and probably not looking to revive old headaches.
He listened to Carey’s pitch, asked for a weekend to think it over, and the following Monday, with his lawyer on the line, was back on the phone for a conference call with Carey and Wigo. They talked for an hour, and Spitz brought up several concerns, noting that he’d lost all respect for the quality of the institution and that it needed a total overhaul. “I told him, ‘You’re preaching to the choir,’” says Carey. He remembers the negotiations as tough, and it took three or four calls before Spitz said yes, he’d sign on as chairman.
Clearly Spitz’s love of swimming tipped the scale—that and his affection for the Hall of Fame as it had been and might be again. He had gone there as a teenager and during that visit had met Johnny Weissmuller. In the flesh, too. Most visitors had to settle for an effigy—a statue of Weissmuller stood by the front door of the museum. “The place has a tremendous legacy, but it had lost its way,” he says. “I thought that if I could help bring it back to where it deserved to be, it would be one way to give something back to a sport that did so much for me.”
What was the plan if Spitz had said no? “Good question,” says Carey. Adds Wigo: “We had all our eggs in that one basket.”
With his magnet in place, Carey began to recruit the rest of the board. He got off to an easy start with the two directors that Wigo wanted to bring back in: Tod Spieker, a former UCLA All American swimmer and the owner of a vast rental-property company in the Palo Alto, California, area, and Eldon Godfrey, a Canadian who serves on the board of FINA, the international aquatic-sports federation. Wigo puts special value on Spieker’s all-round knowledge of the sport. As for Godfrey, a CPA, “he always asked the right questions at board meetings. He just didn’t get good answers.”
Carey’s next call was to Donna de Varona, after Spitz probably the best-known of the honorees. Her response? “I gulped and said yes,” she recalls. Like Spitz, she says her decision was due to her love of swimming and belief that the Hall of Fame still has a role to play.
Carey also needed some “hard-nosed business experience” among his directors. He started with Herbert M. Baum, who has a long list of corporate credentials, among them service as president of Quaker State and toymaker Hasbro. Better yet, Baum had just stepped down as chairman and CEO of Dial Corp. (now part of Henkel, a German conglomerate), and even though he already sat on a number of boards might have time to spare. Baum said yes, and for two irreproachable reasons: “I respect the man who asked me. I thought it would be fun.”
One by one, Carey assembled a mix of 13 business figures and sports celebrities. A couple of candidates said no, including a German businessman whose presence would have underscored the Hall of Fame’s international role. Carey plugged that hole by recruiting Dinesh Paliwal, an Indian-born, Greenwich, Connecticut-based executive with ABB, a Swedish-Swiss conglomerate that operates in 122 countries. Tyco’s Ed Breen also declined, saying he simply didn’t have time. That was surely true, and Carey didn’t try to persuade him. Besides, Breen had a suggestion of his own: Mike Snyder, who heads the Tyco subsidiary ADT, a security company headquartered in Boca Raton, a short drive from the Hall of Fame. Directors of nonprofits know that fundraising is a big part of the job; so is squeezing goods and services out of their companies. In this case, ADT redid the museum’s security system for free.
Most of the 12-man, two-woman board were on hand in September for their first meeting. A big event that day was the return of the Hall of Fame’s stolen memorabilia. Johnny Weissmuller’s medals had shown up on eBay a few weeks earlier, offered for sale by a local pawnbroker. Recovering them, however, had been more complicated and expensive than those unfamiliar with Florida’s legal statutes might suppose. The pawnbroker had paid the alleged thief, a maintenance worker, $15,000 for the loot. Because he had bought it in good faith, the Hall of Fame was required to give him $15,000 before it could get its stolen property back. Dennis Carey pulled out his checkbook and started writing. Thus, during the lunch break at the first board meeting, and surrounded by television cameras and photographers, Fort Lauderdale detective Gerry Machurick marched into the museum and formally handed the medals and other recovered memorabilia to the new chairman, Mark Spitz.
The future of the International Swimming Hall of Fame is still choppy. Finding the cash just to cover expenses remains a challenge, particularly given the redirection of much charitable giving that followed Hurricane Katrina and then, soon thereafter, Hurricane Wilma—which battered much of south Florida, including the Hall of Fame itself.
Wigo is an optimist. He has drawn up a formidable list of moneymaking ideas, and he plans to make significant improvements in the museum displays. New attractions are sure to include viewings of a collection of old 8-millimeter films showing long-ago swimming races; Wigo found them, along with aged scrapbooks and other miscellanea, stashed all over the museum and auditorium, often buried in dusty cardboard suitcases. He’s also thinking about an Internet museum that would open up the sport’s legacy to swimming fans around the world. He is even considering an Edgar Allan Poe Day (the writer was a powerful swimmer) pegged to Poe’s story “The Mystery of Marie Roget,” which was inspired by a true-life New York crime that turned on whether a death by drowning was an accident or homicide. The drowning case remains unsolved, and Wigo too has some plot details to iron out.
Meanwhile, that statue of Robert Goulet—sorry, Mark Spitz—has gone through a couple of changes. Instead of the original Olympic uniform of red blazer, white shirt, and blue pants, which Wigo thought looked dated, “Spitz” now wears a tracksuit. And the statue has been moved from the pro shop to the museum, where Weissmuller once stood just inside the front door, smiling and happy to welcome visitors.
