Perimeander [CC BY-SA 4.0], via Wikimedia Commons

October 30, 2019; Chronicle of Philanthropy

Not all donors are equal. That’s the lesson the nonprofit community has learned from the public struggles of respected organizations like the Whitney Museum, the University of Connecticut, MIT, Harvard University and others, large and small, that have made headlines. Honoring and taking money from those whose ethics and wealth draw on unsavory sources is embarrassing and harms reputations. Many organizations have revisited their policies and procedures, looking to them as safeguards against future harm.

The Chronicle of Higher Education recently dug into this question, examining whether gift acceptance policies as they exist provide the guidance necessary to keep organizations from taking tainted money from tainted donors. From the small sample of colleges and universities they examined, the Chronicle concluded that all met the best-practice standard set by the Association of Fundraising Professionals by having a written policy.

Robbe Healey, chair of the ethics committee for the Association of Fundraising Professionals, told the Chronicle, “It is advantageous to the nonprofit to clearly state where the lines are, so you give your development team a structure for knowing when a gift may not be one you want to accept. That protects the donor and the institution and the individual staff people.”

The Chronicle found that universities were able to state very clearly that donors do not get to dictate who will teach or be granted tenure. Nor can donors set conditions that violate the academic freedom of the university. Clear rules are designed to prevent situations like those that plagued George Mason University over its relationship with their relationship with the Koch Family.

The Chronicle also found that the policies they reviewed did make “some gesture at the morality of donations’ origins in a broad way” but did not get specific enough to do much good. Brown University faced protests from students and faculty over acceptance of gifts from Warren Kanders, whose business produces riot control equipment and tear gas that has been used against asylum seekers on the US-Mexico border. (The source of Kanders’ wealth had also caused controversy at for the Whitney Museum, resulting in his resignation from the board this past July.)

The controversy at Brown was painful enough for the University to issue a policy revision: Gifts should will not be accepted “if the funds or property were not acquired legally, or if the intended purpose or association with the donor could inflict damage on the University’s standing or integrity or runs counter to University values. While donors may request anonymity in making gifts, the policy conveys that Brown will not accept gifts anonymously for the purpose of protecting the University’s reputation or disguising a gift.” Is that clear enough to override the allure of large gifts and powerful donors?

The difficulty is in balancing need with values. The Chronicle posed that dilemma to Randa S. Safady, vice chancellor for external relations for the University of Texas system. She indicated that decisions must be guided by three words: legal, ethical, and moral. However, when the Chronicle asked her to consider a real-life example using her approach, rather than provide the clear decision one hope clear policies and principles could provide, her response was more equivocal:

Q: “Some students and professors have pushed their universities not to take money from fossil-fuel companies, seeing those profits as immoral because they contribute to climate change. Would the University of Texas, in one of the nation’s top oil-producing states, consider fossil-fuel money to be immoral, too?”

A: “The moral issue is always an interesting issue because what is morally appropriate for some may not be for others. You raised one good example. You have to look at: What is the benefit to the institution? What’s in the best interest of the institution?”

As NPQ has covered donor controversies, it has been asking, “Is it possible to avoid errors in the future without changing the overall economic structure that makes philanthropy essential to personal and institutional success?” It seems the answer is no—the perceived need for large donations remains too strong.—Martin Levine