Returned Gifts Speak Volumes about a Nonprofit’s Culture

September 13, 2016; Plain Dealer (Cleveland, OH)

Ohio University (OU) delivered another blow to the once-sterling reputation of Roger Ailes by becoming the second nonprofit to sever ties with the beleaguered former CEO of Fox News. Last month, Putnam County, New York delivered the first by turning down a $500,000 donation for a senior center after 400 residents signed a petition against naming the center after Ailes.

OU’s announcement said it, too, is returning a $500,000 donation to the university’s Scripps College of Communications and removing Ailes name from the newsroom. Ailes, Fox News’s founder, former CEO, and board chair, left Fox this July amid allegations of sexual harassment. (The network ended up paying $20 million in an out-of-court settlement to former Fox News host Gretchen Carlson. Ailes steadfastly denies any improper conduct on his part against Carlson or any other woman, including two women with whom Fox also settled harassment lawsuits.)

What’s remarkable is that Ailes, an OU alumnus, made the donation in 2007 to help fund a technologically advanced newsroom. That a beneficiary would take such action nine years afterwards demonstrates the strong ethics of the school. “Given the allegations against Mr. Ailes, the circumstances surrounding his departure from Fox News, I’ve decided to return his gift and remove his name,” announced OU President Roderick McDavis.

How many nonprofits today would take similar action nearly a decade after receiving such a gift? How many would be able to afford to do so? And how many would not feel compromised at all?

Just last month, the NPQ nonprofit newswire reported on why Vanderbilt University returned an 83-year-old gift. The rationale for their action was because a residence hall had been named Confederate Memorial Hall at the time of the donation back in 1935. Chancellor Nicholas S. Zeppos explained, “The name is discordant with our own work under the founding charge of Cornelius Vanderbilt, to find union and healing after the bloodshed of the Civil War.”

This spring, NPQ wrote about the conundrum that faced the faculty senate at the George Mason University School of Law. The issue was over two major donors who wanted the law school named after the late Supreme Court Justice Antonin Scalia. In this case, their $30 million gift won the battle of naming rights over faculty senate objections that Scalia had made “numerous public offensive comments about various groups” and that “the memorializing of a Supreme Court Justice who was a significant contributor to the polarized climate in this country that runs counter to the values of a university that celebrates civil discourse.”

These recent decisions should resurrect the issue of nonprofits and gift acceptance policies. Would a policy have helped OU, Vanderbilt, or George Mason avoid this situation? Probably not. But gift acceptance policies are important and the IRS considers it a best practice. Nearly hidden on line 31 of Schedule M on their 990 form, the IRS asks nonprofits if they have a gift acceptance policy. However, what the IRS is particularly interested in are noncash donations.

For some nonprofits, crafting a gift acceptance policy is easy. The American Lung Association would be hard pressed if it had to explain why they accepted a gift from a tobacco company or Alcoholics Anonymous taking funds from a beer company. Nonetheless, it is prudent for nonprofits to have gift acceptance policies in place to address issues that aren’t as obvious. A 1979 supplement to the Harvard University Gazette discussed at length the ethical problems of accepting gifts:

Deans and presidents are well aware of the contrasting attitudes (students and faculty versus donors) just described. Yet the nature of their responsibilities also forces them to recognize the need for principled, consistent policies that they can defend in public and apply to future cases without intolerable difficulty.

Equally important is that a nonprofit’s board of directors be driven by a moral compass that causes potential and past donors to have not only a sense of fulfillment, but also pride in being associated with an organization that mirrors their values.—Scott Shirai