November 5, 2019; WABE-FM (Atlanta NPR)
NPQ has long written about tainted donations and the challenges they pose for nonprofits. From Atlanta comes a seemingly small case that nonetheless highlights some of these everyday balancing challenges facing nonprofits, precisely because these challenges are so ubiquitous.
In this case, Wellspring Living, an Atlanta nonprofit that houses and provides employment and other services to human trafficking victims, accepted $200,000 from Wells Fargo in partnership with the US Conference of Mayors.
Getting $200,000 from Wells Fargo is not news, but what is notable was not just the modest amount of money the nonprofit accepted, but the language the nonprofit used in accepting the gift. In a ceremony on November 5th featuring Atlanta Mayor Keisha Lance Bottoms, Wellspring Living’s executive director, Mary Frances Bowley, touted the bank as “a great friend for lots of years, and now we are really good friends.” This is the same Wells Fargo, of course, that has found itself compelled to pay more than $15 billion in settlements over the last decade for unethical practices, including overcharging customers as recently as August 2019.
One of those settlements, for $1.2 billion, was according to then-US Housing and Urban Development (HUD) secretary Julian Castro “the most money ever recovered by taxpayers for shady loan violations in the history of FHA [Federal Housing Administration] program.” Castro added that, even at $1.2 billion, “this monetary figure can never truly make up for the countless families that lost homes as a result of poor lending practices.” In 2018, the Federal Reserve took the extraordinary step of ordering Wells Fargo to cap its assets at $2 trillion—basically a restriction on the bank’s growth—while the bank overhauls its governance practices to regulators’ satisfaction.
Now Wells Fargo is touting that it has increased its giving “from $280 million to over $440 million” since 2018. Given net income of approximately $22.7 billion, on revenue of approximately $101 billion in 2018, $440 million is about two percent of net profits. (Wellspring Living had a total revenue of approximately $5.4 million in 2018.)
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Nonprofits can and do sometimes turn down funding from sources whose actions run counter to their values. NPQ reported on a Canadian indigenous climate nonprofit rejecting a $150,000 award from Aviva, a British insurance conglomerate whose associations with fossil fuel projects became a factor in the decision. Then there was a case of a school board rejecting NRA funding for a high school rifle team; subsequently, local sources more than made up for it.
The Atlanta mayor’s desire to highlight resources being donated to address the human costs of sex trafficking is understandable, as Atlanta is often cited as “a hub of sex trafficking,” even if, in the WABE article, Ouleye Ndoye, the senior human trafficking fellow for the City of Atlanta, calls this “a mischaracterization born out of its frequent placement at the top of alphabetical lists.”
This may be a case in which the need for an “image makeover” for both Wells Fargo and the city of Atlanta—as the indirect recipient of the funding action—met over a nonprofit that was a willing direct beneficiary.
Of course, nonprofits such as Wellspring face a dilemma. The need for resources is great, but while it is not easy to forgo funding, a nonprofit that rejects funding from morally questionable sources does gain the power to tell wealthy and powerful institutions that they cannot buy their loyalty on literally pennies on the dollar of the givers’ net revenue. Such calculus requires nonprofits to clarify their organizational values, and, in this case, an attendant honor that may be of greater benefit.
As corporate behavior comes under greater scrutiny, and serious social issues like human trafficking require community-level responses, questions regarding funding acceptance may be raised more frequently, especially in cases where the balance of power between the funder and grantee appears lopsided.—Kori Kanayama