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.