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Donors Beware

eye on the news

Donors Beware

Universities and museums find it harder and harder to accept financial gifts that don’t set off political controversy. November 19, 2019
Economy, finance, and budgets
The Social Order

In this accusatory age, donors must approach their generosity with caution. In deference to manufactured mobs, major universities and museums now oversee extensive investigations of potential donors before accepting financial support. In a recent conversation with the New York Times’s Andrew Ross Sorkin, Bill Gates explained that it can be “tricky” to recruit billionaires to sign the “Giving Pledge,” especially overseas, because it’s important to vet them. “I feel bad,” he said. “We probably will at some point accept someone into the Giving Pledge and it will turn out that their fortune is a disreputable fortune.”

In response, universities have enacted new policies. Earlier this fall, for example, Brown University released a “gift acceptance policy.” Responding to student-group outrage over donations from the Whitney Museum’s former board cochair, Warren Kanders—whose company sold tear gas used on migrants at the Mexican border—the school’s administration explained: “The policy affirms the enduring principle that acceptance of a gift does not imply endorsement of donor views, businesses, or activities.” According to administrators’ rationale, they can accept money earned by selling tear gas while also explaining that they don’t support its use. Time will tell whether this approach placates protesters at Brown; it didn’t work at the Whitney.

The university’s policy also “re-articulates standards against accepting gifts if the funds or property were not acquired legally, or if the intended purpose or association with the donor could inflict damage on the University’s standing or integrity, or runs counter to University values.” The question of whether money is acquired legally is easy to answer, but whether a gift could affect a university’s standing or clash with its values is more fraught. In today’s climate, any gift could conceivably test university standards.

In a recent article on “toxic donors,” the Chronicle of Philanthropy describes how “many large nonprofits employ prospect researchers who uncover as much as they can about potential major donors before they make a gift [including] . . . how potential donors made their money, whether they actually have the money to contribute, and which other institutions they have given to.” But when a line is crossed could remain unclear. “An organization doesn’t often write down a list of things that they are and are not OK with, so there’s really a lot of gut and intuition that comes into vetting,” Lindsey Nadeau, director of research and relationship management at George Washington University’s development department, told the Chronicle. Sometimes nonprofit leaders understand that there’s a problem only when protesters come knocking.

According to the Chronicle, researchers “are digging into family backgrounds to understand the historic nature of a potential donor’s wealth. And they are monitoring the media more closely to identify news stories that may affect the donor.” This clearly signals a precarious future for potential donors, who will submit to FBI-level background checks before an institution can accept a large gift. And yet there seem to be fewer and fewer ways that philanthropists can make money these days without setting off one of many “woke” tripwires. Many of today’s wealthy families, no doubt, made their money by means that would now be considered disreputable, from monopolies and union-busting to selling war munitions. Numerous stock-market fortunes were made through questionable investments in big companies.

In the years ahead, whether your fortune came from manufacturing prescription drugs or mining fossil fuels, the “historic nature” of your wealth will pose a problem. If your fortune is self-made—coming from, say, e-commerce—but your company’s delivery system involves too many carbon emissions, you could be suspect. Employee dissatisfaction with wages and working conditions or contractual battles with unions could also imperil the spirit of giving. It’s hard to imagine any legitimate way to earn wealth these days and not receive some negative press coverage, which, in turn, could affect the “standing” of the institution that you’re trying to support. For certain public figures, the mere existence of wealth is evidence of a problem.

What does the future hold, then, for wealthy donors? Some will continue trying to give their money away—maybe even in the hope that it will burnish their reputations among the progressives running these institutions. Some will conclude that the effort is no longer worth it, and avoid the bad publicity involved with rejected gifts or seeing their names stripped from buildings. And some may take their largesse elsewhere. Plenty of schools and think tanks remain that won’t question the legitimacy of a gift just because it comes from the fruits of capitalism. They might even say, “Thank you.”

Photo: SergeYatunin/iStock

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