Sterling had been a prominent donor to the NAACP chapter for more than a decade. He ran newspaper ads touting his charity's generosity to L.A. organizations that help the poor communities.
But the real estate magnate had just paid $2.73 million to settle U.S. government claims that he refused to rent his apartments to Latinos and blacks in Koreatown.
"The NAACP airbrushed this away and simply said that Sterling has been a gem in giving oodles of tickets away to needy inner city kids and ladling out some cash to charities and sports camps for them," community activist Earl Ofari Hutchinson wrote at the time on his website.
The organization decided to go ahead give him the award. And in May, it was set to hand him a second honor as part of a gala marking the NAACP's 100th anniversary.
Then recordings emerged in which a man said to be Sterling asked a female friend not to publicly associate with African Americans.
This time, the NAACP withdrew the award. But as the scandal unfolds, some have questioned why it had associated itself with Sterling for all these years.
Leon Jenkins, president of the NAACP branch, declined to say how much Sterling had given the organization recently.
He said he didn't cut ties with Sterling until now because the group was reluctant to make decisions based on "rumors."
"We deal with the actual character of the person as we see it and as it is displayed," he said.
Jenkins said NAACP officials spoke with Sterling in 2009 about the housing discrimination case as well as a suit that NBA great Elgin Baylor filed accusing Sterling of racism when he ousted Baylor as general manager.
Baylor claimed that the organization had a "plantation mentality" in a deposition, and that Sterling rejected a coaching candidate, Jim Brewer, because he was black.
Jenkins said the NAACP officials told Sterling: "If any of the allegations in those lawsuits are true, you need to pay those people, you need to make amends."
In 2011, Baylor dropped the race allegations from the suit, and Sterling hired an African American coach, Doc Rivers, last year.
The NAACP tried to build partnerships with other sports franchises in Southern California, Jenkins added, but "his organization was the only one that really came to the front."
The chapter had recently been talking to Sterling about giving an endowment to Los Angeles Southwest College and donating more money to African American students at UCLA.
"That is something that shows — I don't want to get into the good or bad — but it shows there's a consciousness about the plight of African Americans and Hispanics," Jenkins said.
On Monday, Jenkins said the organization would refund the money that Sterling donated. He did not say how much that would be.
But he rejected a call by the national leader of the NAACP, Lorraine C. Miller, to rescind the 2009 award.
"This is not a Heisman Trophy, dude," Jenkins told a reporter.
Some black civic leaders said Sterling's actions in the community trump the views he purportedly expressed in a private conversation
"He's free to march around in a grand wizard outfit at night as far as I'm concerned," said Connie Rice, a civil rights attorney. "But if he treats all of his players well, if he has African Americans on his coaching staff and he treats them with respect and they're well compensated..... Those views are his own to hold."
But Jasmyne Cannick, a South L.A. activist and political consultant, questioned why the NAACP was doing business with Sterling, who she said has done little for the African American community "other than writing a check."
"I don't want to see the organization marginalized or discredited over an issue like Donald Sterling," Cannick said. "I hope it's a wake-up call that it's time to do some things differently from how they communicate to what they advocate to who they decide to lift up in the community."
Hutchinson, president of the Los Angeles Urban Policy Roundtable, suggested that the NAACP do a better job of screening donors.
"Is this a payoff to your organization from Donald Sterling to essentially buy goodwill, to buy a civil rights imprimatur, to buy credentials as a humanitarian," he said. "Are these credentials for sale?"
The L.A. chapter has long lived in the shadow of the NAACP's Hollywood bureau, which has a history of activism in the entertainment industry. It's the Hollywood chapter that runs the star-studded NAACP Image Awards.
The L.A. chapter in the past has been a leading voice on topics including the L.A. riots, police brutality and discrimination. But some activists say the chapter has been less active in recent years.
The chapter was prepared to honor Sterling at a gala in May. Newspaper ads for the event recently ran featuring photos of Sterling and Jenkins with the headline: "Two leaders. One unprecedented event."
Asked Monday if the comments attributed to Sterling could be forgiven, Jenkins said the Clippers' owner would have to prove that those words don't reflect his true feelings.
"I think there's room for forgiveness," he said. "I wouldn't be a Christian if I said there wasn't."
Times staff writer Paul Pringle contributed to this report.