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Reflections on "Dirty Money": March Question of the Month Results

The March Question of the Month originated from a Newsletter reader's response to Bob Ottenhoff's February article on politicians' donating funds they had received from Jack Abramoff to charity. She wrote, "I think a GuideStar poll asking how many organizations were offered this money and how many kept or returned it could give us some very interesting perspectives. I would have asked my Board not to accept it. I honestly don't know if they would have granted my request or not."

We agreed that Newsletter readers would have interesting things to say on the issue and decided to expand the question beyond the Abramoff moneys. Thus the March Question of the Month asked, "Should charities accept contributions from controversial sources?" The results were fairly close:

No 39%
Not sure 32%
Yes 29%

We then asked participants to define "controversial sources." Across the board, they most often mentioned the five categories discussed below.

1. Sources That Conflict with an Organization's Mission or Values (37 percent)

Although this was the category named most often, several respondents pointed out that it was not necessarily cut-and-dried. Teresa Christin of Hospice House and Support Care of Williamsburg noted, "The nonprofit might need to take into account the nature of the charity and the business of the donor. For instance, I know of a children's advocacy group [that] would not accept donations from companies manufacturing tobacco, handguns or alcohol. On the other hand, it might be considered fine and appropriate for a men's drug recovery program to accept sponsorship from these same companies."

Along the same lines, Robin Gifford of Mosaic commented, "'Controversial' is different for different charities. We are a faith-based charity that supports people with developmental disabilities, so we must be even more careful in our affiliations. For example, many of our clients have been affected by fetal alcohol syndrome so we would have to think long and hard before partnering with an alcohol company!"

An anonymous participant who defined "controversial sources" as "a donor with political positions or opinions that don't agree with the stated mission of the organization" observed, "They don't have to agree philosophically with everything you stand for to be able to do some good for your cause." This participant continued, "As a faith-based, human services organization we have struggled with the issue of accepting assistance from vocal atheist/agnostic groups. We have decided that they don't have to agree with our faith to be allowed to help provide food for the hungry. Some people don't agree with that position."

2. Sources Detrimental to Health or Safety/Sources That Produce or Serve Products or Services Not Considered within the Mainstream (27 percent)

Participants listed tobacco, alcohol, and firearms manufacturers, hate groups, gambling, the adult entertainment industry, companies with bad environmental records, and nuclear energy or chemical plants in this category. An anonymous participant, however, stated, "Even though these companies are making money by questionable means, I somehow feel that they should give back to their communities. However, if you do accept money from them, people somehow feel you agree with what they do."

3. Unethical/Immoral Sources (10 percent)

Although several participants agreed with the respondent who defined "controversial source" as "a company, organization, or individual that appears unethical or immoral," a couple of others went further. "A donor who has ... a bad reputation for honesty/actions counter to the interests of the organization," specified one anonymous reader. "Any person or entity which we feel has a reputation that our members may find morally repugnant," wrote Terri Weitze of NAAFA, Inc.

4. Illegal Sources (8 percent)

In addition to "money obtained in illegal ways," one anonymous participant listed "sources under investigation by government or accrediting agencies" in this category.

5. Sources That Expect Special Treatment in Return for Their Contributions (7 percent)

"I think that charities have an obligation to their missions and shouldn't compromise them for donors (sources) who want them to, in exchange for a gift," stated Adriana Ramirez. For Laura Morris of the Sea Island Development Funds board, "My primary concern would be whether there are strings attached to the contribution that would require my organization to do something outside its mission or that violate its moral principles, not where the money comes from." An anonymous participant agreed: "Yes, we would accept a donation from what we would consider to be 'a controversial source' ONLY IF there were no strings attached that would go against our mission and values."

"Some Donations Can Come Back to Haunt You"

Several people commented on the impact accepting contributions from controversial sources can have. "Be careful—some donations can come back to haunt you and throw a ringer in your cause," warned Sylvia Deters of Rocky Road Sisterhood. Kathleen Buescher of Provident Counseling agreed: "Charities need to be careful about the negative reflection that certain contributions could have on their organization. The type of questionable donations might be different in different communities, though. Here in St. Louis, we think nothing of pursuing and accepting contributions from the brewing industry."

NAAFA's Terri Weitze commented, "For the most part I take the position that as long as there are no strings attached to how the money is used, take the money and use it to move forward with our own purpose; but your article this month ["Branding Myths"] makes me wonder how accepting this money might affect the organization's branding." An anonymous participant, however, had no such reservations: "I believe that money is money and that if you can actually GET money from a controversial source (NOT from an 'illegal' source) then you are converting that money into something positive."

"It is a question that can be truly divisive," another anonymous respondent wrote, "especially for development staff who must maintain ongoing relations with funders while protecting credibility and board members entrusted with the overall financial health of the charity." Yet another anonymous participant noted, "This issue is not clear-cut, and decisions about whether to apply for or accept funds from certain sources are probably best made on a case-by-case basis."

Chrissy Schultz of Marian Manor Corporation emphasized the importance of communication in such cases: "This is a touchy situation but I think each organization is different and the funding source, if controversial, should be discussed with other employees, volunteers and Board members to come to a decision together." An anonymous reader expressed a similar view: "I think the question to ask is 'controversial to WHOM?' If it's our members/constituents, then I hope the organization's leaders think long and hard before making a decision either way. The same is true if it's controversial to 'the public at large' but fits reasonably within the organization's mission. The leaders need to have a meaningful conversation, seek input from members/constituents, and be prepared to articulate the reasons why they decided one way or another."

Finally, another anonymous participant suggested a nonmonetary benefit of such contributions: "It depends a lot on the specific controversy, and whether or not educational opportunities can be tied to the acceptance of the support."

Suzanne E. Coffman, April 2006
© 2006, Philanthropic Research, Inc. (GuideStar)

Suzanne Coffman is GuideStar's director of communications and editor of the Newsletter.
Topics: Trends