When should charities say no to donations?

A couple of stories in the news caught my eye recently because they brought to the foreground one of the thorniest recurring questions for philanthropy: are there some donations that charities should not accept?

 

Oxford_University,_Radcliffe_Camera,_a_Reading_room_of_Bodleian_libraryThe first story concerned the mounting criticism faced by Oxford University for accepting a huge donation from a Russian Oligarch accused of being a “crony” of Vladimir Putin and involved in questionable political and business activities in Russia. The oligarch in question, Leonard Blavatnik, gave a donation of £75m to Oxford back in 2010 – one of the largest gifts in the university’s history – to support the founding of the Blavatnik School of Government.

 

The second story was about a donation of $100,000 received by the Girl Scouts of Western Washington, from a donor who subsequently tried to dictate that none of the money was spent on supporting the involvement of transgender girls. The Girl Scouts chapter took the bold decision to return the gift, despite the fact that it represented a significant sum of money for them, on the grounds that the restrictions placed on it ran counter to their ethos and mission.

 

The question of how to treat donations from potentially dubious sources is far from a new one. In fact, I even wrote about it on this blog back in 2011. In that post I suggested three criteria that could be applied to determine whether a charity could justifiably accept a problematic donation:

  1. The charity can demonstrate that some social good is actually being done with the money
  2. No strings are attached to the donation that would compromise the charity’s mission or integrity.
  3. Acceptance of the donation is not seen as an endorsement of the donor’s current or future practices.

I’m not claiming that these are foolproof, but it is instructive to apply them to the two examples in the stories highlighted above.

 

The Girl Scouts case is probably the clearer of the two, as it is fairly apparent that the donation in question would fail the second test. The donor tried to introduce restrictions on the use of the gift that ran counter to the organisations ethos and mission, so by my criteria they were right to refuse the donation.

 

It is worth mentioning that there is a happy corollary to this particular story. Having returned the donation, the Girl Scouts of Western 380px-Plast_-_Scout_SaluteWashington were able to turn a negative situation into an extremely positive one by following the suggestion of a member of staff who had the idea of launching a crowdfunding campaign to replace the donation they had refused. They put a page up on a crowdfunding website with a message that read “help us raise back the $100,000 a donor asked us to return because we welcome transgender girls”, along with a video about the Girl Scouts commitment to inclusivity. As a result, they raised the $100K within 5 hours, and by the end of the campaign had raised $356K.

 

The Oxford case is less clear-cut. Running through my three criteria, one assumes that the University would argue that the construction of the school of government has produced some social good, so the first test is passed. Furthermore, no obvious restrictions appear to have been placed on the gift which would run counter to the University’s ethos, so in this case the second test is passed too.

 

The question then, is whether the third criterion is satisfied. And there are really two parts to this question:

  1. Are the claims made about the donor’s unsuitability valid, and
  2. Does acceptance of the donation constitute endorsement or validation of the donor’s legitimacy?

If the answer to both questions is ‘yes’, then there is a problem.

 

I am certainly not going to get embroiled in a debate about whether Leonard Blavatnik’s past business practices in Russia are questionable. It is a question on which I am spectacularly unqualified to pass judgment. Suffice it to say that Oxford University, in their response to the criticism they have received, made it clear that they had gone through a process of due diligence:

“Oxford University has a thorough and robust scrutiny process in place with regard to philanthropic giving. The Committee to Review Donations conducts appropriate due diligence based on publicly available information. The University is confident in this process and in its outcomes.”

 

Let’s assume for a moment, however, for the purposes of exploring this issue, that there is a case to answer. Thus the question is whether acceptance of the donation can be construed as broader endorsement of the donor?

 

It can certainly be argued that taking the donation does not imply anything more than that according to the publicly available information that Oxford considered as part of its due diligence, there is no reason to doubt Blavatnik’s propriety and suitability as a donor. However, in this case, the fact that his name is emblazoned on an institution dedicated to research and learning about what constitutes good government may well be seen as carrying the deeper implication that Blavatnik himself is an exemplar of good practice when it comes to politics and business.

 

On the hypothetical supposition that there is some substance to the criticisms of Blavatnik, this scenario would seem to be problematic for the University. It would put them in the awkward position of complicity in an attempt to “reputation launder”, and thereby potentially damage the university’s own standing. This is precisely what critics claim is the happening in reality.

 

Again, I’m not taking sides on whether these criticisms are justified. But one interesting question is whether there would there be a way of justifiably accepting the donation even if the allegations about the donor’s questionable background turned out to be well-founded?

 

There are definitely those who would argue that it is better to take the money and put it to good use, rather than refuse it merely in order to retain your own moral superiority. Dublin_Portobello_33_Synge_Street_George_Bernard_Shaw_Birthplace_PlaquePerhaps most famously, George Bernard Shaw vigorously defended this standpoint. His play Major Barbara is about a young female Salvation Army officer who becomes disillusioned when the organisation accepts donations from an arms manufacturer (who happens to be her father) and a whisky distiller.

 

Many critics thought this represented a blistering attack by Shaw on the hypocrisy of charities which accept donations from questionable sources. However, in a preface to later versions of the play, he made it clear that he actually thought it was eminently sensible for charities to take money from any source, because at least that way some good would be done with it.

 

In Shaw’s view, it was pointless getting hung up on the idea of “dirty money” because all money was to some degree “dirty” as:

“Practically all the spare money in the country consists of a mass of rent, interest, and profit, every penny of which is bound up with crime, drink, prostitution, disease, and all the evil fruits of poverty, as inextricably as with enterprise, wealth, commercial probity, and national prosperity.”

 

 

Some modern critics of philanthropy such as Peter Buffett, share Bernard Shaw’s view about the moral status of most money. Buffett himself concludes that the idea of trying to do good through philanthropy is fundamentally flawed because the way in which wealth is created almost inevitably does more damage than giving it away can ever rectify.

 

 

Bernard Shaw, however, drew a more pragmatic (some might say even cynical) conclusion. Since all money was dirty money, charities should simply accept all donations and not bother tying themselves in knots over this issue. dirty moneyThe Salvation Army, for example, could justifiably take donations from anywhere according to Shaw, as they would then at least be certain the money was being put to good use. They could even, “take money from the devil himself and be only too glad to get it out of his hands and into God’s.”

 

 

It is unlikely that you would hear many people nowadays voicing quite such a laissez-faire attitude towards the provenance of donations. However, there are still those who would definitely argue that it is better for the money to be in the hands of charities than any of the alternatives. Any charity which adopts this attitude, though, must also take steps to minimise the danger of conferring unwarranted legitimacy on the donor.

 

In the Oxford case, if the criticisms of Blavatnik were to be proven true and the University still wished to keep hold of the donation, then doing so would seem to involve at the very least the removal of his name from the institution, and perhaps further distancing measures.

 

What all this demonstrates is that accepting donations is not always a straightforward matter for charities. The extent to which they should be expected to pass judgment on the legitimacy of donors, when the arguments on both sides are often extremely complex, is far from clear. And even when a donor is obviously morally dubious (but still not overtly criminal) there is still an open question about whether the charity can still take the donation without damaging their own reputation and their relationship with supporters.

 

These stories highlight the fact that charities often having to take difficult decisions when it comes to fundraising. This has been the case throughout history, and continues to be true today. What is important is that these decisions are transparent to the charity’s supporters, so that they can continue to place their faith in the organisation and its activities.

 

Rhodri Davies

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