What is Your Litmus Test
for Accepting a Gift?
Ann C. Fitzgerald, President
It’s clearly a no-brainer to reject a gift from the likes of Jeffrey Epstein, right? What if his tainted money could be redeemed by being put to good use for medical research? What if it could save lives?
In the history of philanthropy, there are myriad examples of wealthy individuals who gave generously from profits accrued through business dealings that might be considered unethical by today’s standards. Andrew Carnegie, for example, accumulated vast wealth from his steel empire at a time when few workplace protections existed. But then he used these profits to build over 2,500 public library buildings. By the end of his life, he had donated ninety percent of his fortune to charity. His largesse—that some would deem “tainted”—has touched and transformed millions of lives.
Today, there is often great scrutiny—and condemnation – of gifts from certain philanthropists whose politics don’t align with the staff, board or other stakeholders at nonprofits. For instance, the late David Koch’s $100 million gift to a hospital several years ago was controversial enough to spark street protests.
And now, many nonprofits are facing serious fiscal challenges brought on by the pandemic, at a time when “cancel culture” seems to be taking over. Should there be a push to adopt broader gift acceptance policies to keep the doors open? Or should nonprofits worry about and consider funding sources that align with their values? Is there really a problem, as long as the money is acquired legally?
Some nonprofit boards establish gift acceptance policies as a way to ensure due diligence with charitable contributions, and that’s a reasonable course of action. But here are some thoughts to consider when deciding how tight, or lenient, that acceptance policy should be:
Avoid unnecessary litmus tests designed to please those outside your organization. You can be clear-eyed and honest about the source of funds, and know you may deal with some negative press, but ultimately consider the greater good the gift will be able to do at your organization.
Do ensure the gift restrictions align with your mission. When finances are tight, it is tempting to accept money and worry about programmatic implications later, but this path is always more costly in the end.
If board members reject a gift, they need to be part of the solution to replace the funds. There are consequences for turning down gifts from legal sources, and more will be required of board members to fill the financial gap.
And finally, believe in redemption. Sometimes people use philanthropy to atone for earlier actions and to make a positive difference in the final years of their lives. Julius Rosenwald, the philanthropist who donated his fortune to improve the lives of black Americans in the early 1900s, was not an exemplary employer. But his generosity in building schools and fighting against segregation is a lasting legacy.
Ann C. Fitzgerald is Founder and President of AC Fitzgerald, using her decades of experience in fundraising, management, leadership, and sales to help nonprofits build their capacity and achieve success. She is a sought-after speaker, writer, and advisor.