David Allyn is vice president at Graham-Pelton, a fundraising and management consulting firm for nonprofit organizations, and a visiting scholar at the New School for Social Research.
The allegations by Healey and other attorneys general are serious, and the impulse of these institutions to say no to Sackler money is noble. Or, at the very least, savvy public relations.
These days, brands are expected to be pure, and any hint of corruption or moral compromise can easily trigger protests and harsh online backlash. The threat is as real for nonprofits as it is for celebrities and cosmetics companies.
But as a former nonprofit chief executive, and someone who now counsels nonprofits on fundraising, I believe that the rush to reject funds from tainted donors is often shortsighted. Nonprofit organizations serve the public interest and should not readily cave in to pressure to return gifts from controversial sources.
The pressure on organizations to say no to contributions from tainted donors is enormous. Well-meaning activists can quickly marshal vast opposition to an institution. And no organization wants to be accused of taking “blood money” — as the University of Southern California was in 2017 in a Change.org petition , when the university announced a pledge of $5 million from Harvey Weinstein to support female filmmakers.
Not surprisingly, USC leaders quickly reversed course and said they would not take Weinstein’s pledged funds. But was it better that Weinstein got to keep his $5 million? Or would that money have done more for the world by nurturing the careers of young female filmmakers?
U.S. charities receive more than $400 billion in donations annually, much of it coming from the ultrawealthy. How many of the ultrawealthy have truly clean hands? And how many of their donations could withstand scrutiny by the online “cancel culture” as it grows in fervor and power? Nonprofits themselves are increasingly likely to come under inspection and subject to cancellation.
Given these factors, the question of ethical gift acceptance will only become more and more urgent. It is critical to recognize that there are distinct types of challenges facing nonprofits.
Without a doubt, institutions should return money if it was not the donor’s to give away — taking stolen property is unacceptable. Accordingly, in 2001, the University of Oregon returned an $850,000 donation from financier Jeff Grayson after a court ruled that the money wasn’t even his.
What about taking money when a gift seems to be a mere public-relations move by a known wrongdoer? Even the most notorious individuals may have complex motives for contributing to certain causes, and institutions may have complex rationales for accepting the money, but they should balk at slapping a tainted donor’s name on a building or program in a quid pro quo for funds.
What about anonymous gifts from donors who may have done as much good as they have done evil? It seems inevitable that activists will soon want organizations to reject all money from tainted donors, even gifts that would be publicly designated as anonymous. Already some have argued that anonymity itself is dangerous.
But a more moderate approach is warranted. First, remember that any money given to a nonprofit ultimately is good for society as a whole. That’s why nonprofit organizations are deemed by the Internal Revenue Service to be “public benefit corporations.”
We live in a society that provides limited public funding for social welfare programs. Most arts organizations and social service agencies rely on charitable giving. When nonprofits reject funds from donors — tainted or otherwise — we all pay a price. The nonprofit may ultimately be forced to cut back programming, sell property, spend more of its endowment or invest more of its resources in fundraising.
Would you rather visit a new Sackler-funded wing at a museum or see the Sacklers buy another private home?
Some have argued that cultural institutions, instead of returning funds to the Sacklers, should re-donate the money to drug-rehabilitation programs. The idea seems appealing at first, but imagine if the owners of Purdue Pharma had donated directly to a drug-rehabilitation program. The program’s directors would no doubt face extraordinary pressure to return the donation amid cries of hypocrisy and reputation-laundering.
Let’s not put the goal of shaming wrongdoers above the goal of furthering the common good. Despite activist anger and social media self-righteousness, until governments step up their funding, we would do well to support nonprofits in taking a nuanced, thoughtful approach to the ethics of gift acceptance.