May 19, 2010; Source: LA Times | When corporations give money to charitable causes they typically enjoy the spotlight their gifts provide. Similarly, the recipient organizations get spillover benefits from being singled out for support by well-known companies and brands. But what happens when a major corporate benefactor gets into trouble?

That question is hardly academic for the Aquarium of the Pacific in Long Beach, Calf., which is holding a preview for the press on Thursday of its new Sea Otter Habitat, which was underwritten by a $1 million donation from the oil giant BP. Surprisingly it’s not the aquarium worried about getting tarred from its association with BP, which is now facing a public relations and environmental nightmare because of the oil spill in the Gulf of Mexico.

Rather, to avoid calling more attention to the company BP officials themselves told the aquarium they might skip the event. Jerry Schubel, aquarium president, said BP told him “they did not want to hurt the reputation of the institution” and even asked ‘Would you prefer that we not be there?’ I said ‘No. Without your support we could not have done this.'”

This is hardly the first time—nor likely the last—that accepting a donation from a corporate sponsor could turn out to be bad business, especially for the recipient organizations. There are no set rules or guidance on what recipient organizations should do when their corporate benefactors get into trouble. According to one expert, it often comes down to whether a company’s troubles conflicts with the mission of the organization.

Paul Dunn, says BP’s support for an organization that promotes sound environmental practices could cause the aquarium some discomfort. Says Dunn, “People can see a direct link there. Aquatic animals are being harmed by the disaster. Any organization that has BP’s name on it throughout the world should be saying, “We have a potential issue here.” Read Dunn’s article “When a Donor Becomes Tainted” on our website.

Despite those worries, the aquarium has no desire to put distance between itself and BP. The aquarium’s president told the LA Times he won’t close the door on future partnerships with the oil company. Clearly, this is a slippery slope.—Bruce Trachtenberg