Editors’ note: This article, first published in print during April-2000, has been republished for Nonprofit Quarterly with minor updates.

I have received several phone calls and emails recently asking about a problem that surfaces at some point in the life of almost every organization. The problem was nicely laid out in the following email:

Dear Kim:

My group is struggling with what I understand to be a perennial problem: dirty money. The questions are, Should we take dirty money and how do we decide? A corporation has offered us a large grant for operating expenses, but several people in our group have problems with this corporation because of the way they treat their workers (badly). On the other hand, we need the money and not many places give you money for operating expenses. What shall we do?

I thought Journal readers might be interested in my answer, which follows.

Dear Reader,

Your group has indeed stumbled upon the subject that has probably taken up more time in progressive groups than almost any other topic you could name. In fact, had some groups held a “dirty money discussion-a-thon” and sought pledges for each minute they spent discussing the very questions you raise, they would be handsomely endowed by now and could change their discussion to dirty and clean investment policies. However, you raise serious questions that are not easy to answer, which is why this debate is perennial.

I would like to divide your question into two parts and look at them both. The first part deals with the definitions of clean and dirty money; the second part deals with perceptions about the donor.

I don’t subscribe to the idea that there is dirty money and clean money. Money is a tool. Similarly, a hammer is a tool. A hammer can be used to help build a house or to bludgeon someone to death, but we never talk about dirty and clean hammers. Because we don’t credit hammers with power they don’t have, we are able to see just what a hammer is and to separate the hammer itself from what it might be used to do. We need to get that kind of perspective on money. Money can be used wisely or squandered. It can be raised honestly or dishonestly. It can be earned, inherited, stolen, given, received, lost, found, and many combinations of all of these. It is not in itself dirty or clean.

If you let go of the idea of dirty and clean money, you can focus on the real questions in accepting money: How does it make you feel to accept money from a corporation whose labor practices you find appalling? And how does it make you look to others to accept this money? What will be the cost in goodwill, faith in your organization, or even actual money given to your organization, if you accept this money?

I have seen organizations answer these questions in various ways. The most sensible one was adopted by San Francisco’s Coalition for the Medical Rights of Women in 1980 during a marathon discussion about accepting an offer of free printing from the Playboy Corporation. As many readers will remember, the Playboy Corporation has always been a strong supporter of civil liberties and reproductive rights groups, and used to offer to print stationery, envelopes, invitations, newsletters, and the like for nonprofit groups working for those causes. The group simply had to put “Printing donated by the Playboy Corporation” somewhere on the printed piece.

The Coalition (the first place I worked as a development director) had occasionally used Playboy for some of its printing, which was a big help financially, but many in the group had always felt greatly uneasy with the practice. Because of this, and because we operated as a collective, we scheduled a discussion of whether to continue taking the free printing. We argued back and forth, with those in favor saying, “Playboy made their money off of women and we should get some.” Those against argued that Playboy exploited women and promoted sexism and we would help them in their sex-for-money pursuit by taking their free printing. Late that night, after we had made and remade every argument several times, one person finally said, “I don’t know whether it is right or wrong to take this money. All I know is that the idea of taking Playboy’s money or their free printing makes me want to vomit.” That was enough to end the discussion.

From then on, in questions about taking money, we applied the Vomit Test. If a person who was important to the organization — staff, board, volunteer, longtime friend — said, “Taking money from such-and-such place makes me want to vomit,” then we wouldn’t take it because that person and her continuing contributions to our group were more important than any money.

I have never found a more rational answer to the question, “How does it make us feel to accept money from a source whose practices we do not condone?”

The second question, “How does it make us look to the outside world to take this money?” is a more practical one. Sometimes a source of money will pass the Vomit Test, but fail this second test. For example, a board member of a tiny health center in rural New Mexico had a fraternity brother who was the vice-president of a large uranium mining operation. The mine is polluting the entire area around it with radioactive uranium tailings. Through his contact, the board member secured a grant from this mining corporation, which so outraged several major donors to this group that they stopped giving. The ensuing bad publicity and loss of donations was a major factor in the demise of that group the following year.

When an organization accepts money from a source that is controversial, it needs to think about how its other sources of money might react. Of course, others’ reactions are sometimes hard to judge, but generally, people will be shocked or offended if an organization accepts money from a place or person whose work or reputation is perceived to be in conflict with the goals of the organization. So when a mining corporation whose irresponsible practices are causing serious health problems donates to a health center, it can be predicted to cause outrage. Had the donation gone to the public library, there might have been less outcry.

The other factor in accepting money from a controversial source is the amount of money relative to the budget of the organization, and what kind of recognition the source wants for their gift. Though this may have happened, I have never heard of an organization spending hours debating whether to accept a $25 donation from even the most foul corporation or from one of that corporation’s employees, because that amount of money cannot buy any influence. Similarly, I rarely hear of an organization refusing to accept even a large gift from an individual who may have made their money from a horrible corporation, because the corporation will not receive any glory for that gift.

Sometimes an organization will accept money from a corporation if they do not have to publicize that gift, but refuse to accept it if they do. The hypocrisy of that position can be helpful to groups sorting out whether to take money or not. Ask yourself, “If this gift from this source were to be headline news in our local paper tomorrow, would we be happy or would we be nervous about the consequences?” If happy, take the money. If you would rather people didn’t know about the gift, then don’t.

The issue of clean and dirty money generally comes up in relation to corporations. Since corporations are only responsible for about 5% of all the money given away in the private sector, and only 11% of corporations give away any money at all, I think organizations are better off focusing their fundraising efforts on building a broad base of individual donors. Seeking corporate funds may not be a winning prospect, no matter how you look at it.