Can turning down money from a tainted donor do more harm than good?
When Donald Sterling’s racist rant hit the news last week, you could practically hear the jostling at the microphone by those eager to denounce the Los Angeles Clippers owner.
For the beneficiaries of Sterling’s largesse, the denunciations took on a special imperative as a means of distancing themselves from his views.
Several Jewish organizations have taken Sterling’s money, including the Simon Wiesenthal Center’s Museum of Tolerance and the Jewish Federation of Greater Los Angeles. The L.A. Jewish Journal listed 11 Jewish groups that have received money in recent years from the Donald T. Sterling Foundation.
“Last year we took the $10,000 from him,” Jay Sanderson, president of the Jewish Federation of Greater Los Angeles, said. “We’re not going to take it anymore.”
Rabbi Marvin Hier of the Simon Wiesenthal Center made a similar remark to the Jewish Journal.
The strongest statement came from the NBA, which banned Sterling for life, fined him $2.5 million and now is seeking to force him to sell the Clippers.
Sterling’s foundation has given relatively modest amounts to Jewish groups in recent years given his great wealth. According to the Jewish Journal, 10 of the Jewish groups received gifts of $10,000, some for several years running. Sterling, who is Jewish, also gave $50,000 to Yeshiva Gedolah of Los Angeles in 2010.
Whatever the sums, the ethical dilemmas facing nonprofits when confronted with donations from benefactors of ill repute are hardly clear-cut.
Associating with troubled donors can harm an organization’s reputation, and accepting the money may raise questions about its values and priorities.
Conversely, nonprofits are strapped for cash, and if the money is going to a good cause, does turning down money from troubled sources do more harm than good?
“It’s a very complicated question that really does not have a straightforward answer,” said Michael Siegal, board chairman of the Jewish Federations of North America. “What’s the line of determination of what a bad person is? I think the question becomes like pornography — you know it when you see it. The line on a lot of issues changes all the time. Political correctness and what is bad behavior or good behavior is always a moving target.”
Even when the donor is a public scoundrel, that should not automatically disqualify him, several leaders of Jewish charity groups said.
“We are obliged to help others with the resources we have,” said Mark Charendoff, head of the Maimonides Fund. “I don’t think accepting tzedakah from someone leads to an obligation.”
The key question, Charendoff said, is whether the donor asks for something in return. If the donor wants some kind of endorsement — a gala dinner honor, the naming of a building or, as in Sterling’s case, the right to trumpet donations in newspaper advertisements — then the organization essentially has traded money for an endorsement. That makes the donor a partner rather than merely a supporter.
“If it appears that a requirement of the gift is an endorsement of his character, then I think that’s problematic,” Charendoff said.
Even in such cases, however, there could be compelling ethical reasons to take the money. Let’s say the donor offers $3 million to an organization that buys cancer drugs for children in Africa who otherwise would not have access to medicine. If the money is rejected, taking a moral stand comes at the price of kids’ lives.
The rules are different if the source of the donor’s money is ill-gotten gains, many say.
“There’s a difference between being a public jerk and being a criminal,” said Andres Spokoiny, CEO of the Jewish Funders Network. “There’s a clear-cut line when it comes to monies that are fueled by criminal or non-ethical activities. I think the line there is pretty clear and everybody sort of accepts that as a red line.”
According to this view, if a charity gets a check from William Rapfogel — the disgraced former CEO of the Metropolitan Council on Jewish Poverty who recently pleaded guilty to helping bilk $7 million from the agency he ran for two decades — it should be returned.
But not everyone agrees that criminality automatically disqualifies a donor.
Years before he became the head of L.A.’s Jewish federation, Sanderson worked at a drug rehab program where every Friday, he said, he would find a paper bag on his desk with cash, sometimes in the thousands of dollars. Sanderson never knew who left the cash until he caught the person leaving the money; it immediately became clear that its source was the sale of illegal drugs.
“I made a decision at the time that I was going to keep the money because otherwise he was going to spend the money on something else,” Sanderson said. “This way it went to a good cause.”
Charendoff suggested that even those guilty of financial malfeasance should not automatically be precluded from the donor pool.
“People’s holdings are so complex these days that isolating specific dollars and saying those are ill gotten is very difficult. People’s businesses are complicated,” Charendoff said. “Even identifying someone where you’re going to say that half of the money is ill gotten is really difficult. The theoretical is one thing and the practical is another.”
What if the donor’s crime had nothing to do with money? Surely a murderer is worse than a thief, but is a murderer’s money automatically tainted? If a killer wants to do some good and sends a check from behind bars to help feed elderly Holocaust survivors in Ukraine, is it better to turn down the money or accept it?
“Tzedakah is a major way of doing teshuvah,” said Rabbi David Teutsch, director of the Center for Jewish Ethics at the Reconstructionist Rabbinical College, using the Hebrew word for repentance. “If the giver has done something wrong and realized something is wrong and is giving tzedakah as part of the teshuvah process, you would be fine to accept it. If it’s an ongoing evildoer, you don’t want to be cleaning up his reputation or have his reputation associated with yours.”
There’s a lot of gray area, said Spokoiny, who noted that even the responses to the Sterling case have made him uneasy.
“What I don’t like about this whole controversy is that the ones that are under pressure now all of a sudden are nonprofits that are desperate for every dollar they can get,” Spokoiny said. “We take this righteous approach: You shouldn’t take that money. Well, you’re not giving me any money. I would caution against being unfair to nonprofits. You must understand the predicament they’re in. It’s a very delicate thing.”