Forewarned is forearmed
Some gifts come with unknown strings attached
- A university accepts a $15 million donation from a company fined for violating US trade sanctions about doing business in Iran and Sudan.
- An aquarium receives a $6 million donation from a company with a record of environmental disasters.
- The name of a $3.5 million donor to a university turns up in the Panama Papers and he is thereafter charged with corruption and the bribing of foreign officials in both the US and UK.
- A family foundation makes a $2 million pledge to a museum and it’s revealed that the source of the foundation’s wealth was the use of slave labor in World War Two.
- A charity with a reputation for progressive social activism accepts a $1 million donation from a philanthropist who’s also bankrolling conservative causes.
- The donor pledging $1 million for a new wing at a hospital pleads guilty to playing a role in a more than $30 million fraud.
- A major donor is involved in a bitter divorce, and his wife subsequently sues the university saying the donations came from secret offshore accounts.
Institutions may decide to keep “tainted” money, return it, or come up with a compromise response. But whatever the decision, understanding the potential risks helps get ahead of negative internal and external reactions.
And the best way to achieve that understanding is to commission a thorough investigation of the company, foundation, or individual making the donation.
The OpenSource Agency, staffed by professional investigators experienced in conducting due diligence reports for Fortune 500 companies, specializes in reports on donors to nonprofit institutions.
Links to information on controversial donations
- Koch brothers' donation stirs protests
- Mystery of university's Chinese benefactors
- Billionaire named in Panama Papers a top donor
- University in oil donor controversy
- Bogus donor continues to dog foundation
- Universities warned on "pressure" from Chinese donors
- Top donor embroiled in controversy
Links to information on how nonprofits should respond to crises
- What to do when donors become tainted
- Responding to a crisis
- Developing a crisis response plan
- How two nonprofits handled crisis
- When a respected school's name is tarnished, non alumni cut giving while alumni stay loyal
- Three steps for CEOs of embattled companies
- Risk management and crisis response planning