Wednesday, April 30, 2014

Morality Clauses: Do You Have One?

Yesterday, UCLA gave $425,000 back to a donor. Some of you may be surprised; I applaud them. Here is the story: http://www.latimes.com/local/lanow/la-me-ln-donald-sterling-foundation-ucla-cancels-gift-20140429,0,2760188.story#axzz30MlTPx5I 


This is the best of us. This is the other side of stewardship. It is protecting our organization from donors who do not have the best intentions. In this light, I ask you, does your organization have a morality clause in its gift agreements? If you don’t I worry for you. Take it from the “Olivia Pope” of fundraising; I’m often called in by organizations to help them fix the messes. One simple clause would have helped them avoid this. Having a gift acceptance committee can also help avoid accepting gifts from those with questionable funding sources or backgrounds.

Did you know that at some universities there once was a Kenneth Lay Chair of Ethical Business?

Would you accept a gift from someone who made their money from blood diamonds? From international slavery? From illegitimate business practices? It’s no longer safe to think this won’t happen to you. The names Madoff, Petters, Lay and others have become common embarrassments for organizations and there are other names you probably have never heard of.

Yes, this is important to us and should be. We’re not the morality police, but we must protect our organizations from undue risk. Most nonprofits depend on public goodwill to attract donors. Close association with someone whose name has been badly tarnished can taint the nonprofit’s reputation and harm its ability to attract support.
Here is some sample language to have reviewed by your general counsel and then have in place in your gift agreements:
“If at any time the donor or his or her name may compromise the public trust or the reputation of the institution, including acts of moral turpitude, the institution with the approval of the board of trustees has the right to remove the name or return the gift.”

Please heed my advice; it is much easier to do something up front, than take retroactive action. What are your thoughts on the issue of morality and donations? I look forward to a debate on the topic, not a debate on the person or persons involved in the stories, please.

Cheers,

Lynne

5 comments:

  1. Also as important is to look at where your endowment dollars are being invested. Your organization wants to make sure you're not investing with a company that has holdings in areas that go against your beliefs/mission.

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  2. I agree with both the OP and the Anonymous above. If you're going to judge where the money comes from, you shouldn't allow hypocrisy to creep in. This being said, whose morality do you use. To me the OP's examples like Lay and the "asshat of the moment" are pretty well a given. But who decides where that line is drawn?

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  3. Pecunia non olet

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  4. Pecunia non olet refers to the phrase "money does not stink" in our business it can and does. I would never jeopardize my organizations reputation by accepting money of questionable origins.

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  5. Good question. Where do we draw the line? How many of us would turn down $25mm from Apple, Inc? Yet, reports have questioned the morality of practices employed in the manufacture of iPhones in China (see: http://www.theguardian.com/technology/2013/sep/05/workers-rights-flouted-apple-iphone-plant AND http://www.csrwire.com/press_releases/36988-Are-You-Listening-Tim-Cook-Major-Protest-at-Apple-s-Flagship-Manhattan-Cube-Store-Calls-on-Apple-to-Stop-Poisoning-Chinese-Workers). How critical should we be of our most generous supporters knowing that if we don't take their gift, someone else will?

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