Do your Philanthropic Gifts Match Your Code of Ethics and Values?

Nonprofit organizations spend a tremendous amount of time reviewing mission, vision, and values statements. Staff and boards set high standards and create written Codes of Ethics as policy documents that drive their behavior. These documents empower decision-making for determining what is acceptable. Words frequently used in values statements include concepts of equity, respect, inclusiveness, collaboration, integrity, transparency, and authenticity.  

When it comes to fundraising, adhering to one’s values may present a slippery slope. In the 1990’s many nonprofits working with youth or in health-related fields refused to accept money from tobacco companies or alcohol distributors. Often this created difficult situations for financially starved nonprofits.  

Recent examples in the news are requiring nonprofit development staff and their boards to closely examine where money comes from and make difficult decisions to reject or return a gift if the donor’s behavior does not adhere to the nonprofit’s code of ethics. There have also been current examples of how prestigious nonprofits turned a blind eye to the source of big gifts.

Jeffrey Epstein, one of this year’s most despicable characters, was found guilty of prostitution and procurement of minors for prostitution in 2008 and yet MIT continued to solicit funds from him. Epstein was well-known in philanthropic circles for his gifts to elite universities for scientific research. According to an article by Ronan Farrow for the New Yorker Magazine, the University tried to hide the identity of the donor with some staff calling him “He Who Must Not Be Named.” After Epstein’s death, MIT acknowledged that the University received over $800,000 from Epstein in the last twenty years, including over a half a million dollars in the last year. MIT asked Epstein to solicit other donors on their behalf, including $2 million from Bill Gates and $5.5 million from a fellow investor, Leon Black. Epstein called himself “a science philanthropist” and it was reported after his death that he gave more than $20 million annually to scientific organizations. Philanthropic recipients included Harvard University, the Melanoma Research Alliance, and several of the nation’s most distinguished scientists. Additional philanthropic gifts from Epstein included millions to Jewish federations, congregations, and schools.  The National Council of Jewish Women was a frequent recipient of his giving.

Foundations can also exhibit culpability. The Sackler Family Foundation has long been a major contributor to the arts world including the Metropolitan Museum of Art, the Louvre, Harvard, the Smithsonian, and the Guggenheim Museum. Mortimer and Raymond Sackler are the founders of Purdue Pharma, manufacturers of OxyContin, a time-released opioid painkiller. OxyContin is a major contributor to the opioid crisis, responsible for more than 200,000 deaths in America. Purdue Pharma is now in bankruptcy but there are over $10 billion in lawsuits pending to offset the damage created by the drug.  Museums that accepted the Sackler Foundation funds are facing protesters demanding they return the money. The Guggenheim, National Portrait Gallery, and the Tate Museum have announced they will not accept any more money from the Foundation, however, the Sackler Family Foundation is no longer making new gifts. Many of the museums are not able to refund the gifts given over the last decade, much of which has been spent.

These are just two examples of how values and ethics come into play when accepting philanthropic gifts.  Does this demand development directors research the source of gifts before acceptance to make sure funds aren’t tainted?

John D. Rockefeller was considered one of the richest Americans of all times, and the father of philanthropy. As a good Baptist, he did not want public recognition of his largess and was often criticized for his lack of generosity. His critics felt Rockefeller engaged in unethical business practices and was the face of corporate greed when he created a monopoly in the oil industry that forced his competition out of business. Even his philanthropic giving was criticized when he started the Rockefeller Foundation. President Theodore Roosevelt famously said, “No amount of charities in spending such fortunes can compensate in any way for the misconduct in acquiring them.” Ironically, perhaps his greatest legacy continues to be his philanthropy.          

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