A week ago, it got out that an 80-year-old white guy made some racist comments. Considering that such an even was unprecedented in American history, the Internet blew up and the People called for blood. A few days later, LA Clippers owner Donald Sterling was banned for life from the NBA and fined $2.5 million. Furthermore, NBA commissioner Adam Silver made it perfectly clear that he was going to press NBA franchise owners to force Sterling to sell the Clippers.
All in all, I have no problem with the actions taken so far by Silver, or with his intended pursuit of Sterling’s ousting. I’ve seen a few people cry about “freedom of speech,” but this is all related to private contracts, so I don’t have any ethical qualms from a libertarian perspective. In fact, my only comment to date on the issue is sardonic chagrin at the notable lack of Sterling-Silver puns.
But in all the ensuing hubbub there’s one result that I really don’t understand. As initially reported by that bastion of journalism known as TMZ, at least some charities are looking to give back money that Sterling. In particular, UCLA is giving back $425,000 and refusing to accept the balance of a $3 million (total) donation targeted toward cancer research.
In short, this is idiotic.
Let me step back. Of course, this is not the first time a charity has given back money. One needs look only as far back as last fall recall that a breast cancer charity returned $2,000 to a group who “motorboated” female strangers (with consent) to raise donations. Stacy Palmer, editor of the Chronicle of Philanthropy told NPR, “Usually when nonprofits give the money back, it’s because somebody has gone to jail for insider trading or something like that, so they’ve been convicted of a crime.”
In such cases, I can understand the impetus and ethical decision of nonprofit institutions to return funds that are antithetical to their mission. While I don’t have a problem with consenting adults motorboating or being motorboated, it’s perfectly fine for a private organization to officially disagree with such behavior. The case of financial crime is somewhat different — if the donation is being returned to the perpetrator of the crime, then I don’t see how that is better than the non profit keeping the money; however, if it will find its way back to the victims of the crime, then it makes ethical sense to give the money back.
This case is different, however. While Sterling’s comments obviously are antithetical to at least some of the organizations he’s reportedly supported — such as the NAACP and the Simon Wiesenthal Center’s Museum of Tolerance — it’s not clear that the money he gave was tied to those comments, or the beliefs he expressed in them. In fact, it’s quite probable that much of his money was made in spite of such beliefs and expressions. As Palmer notes, this is an unusual situation.
Understandably, charities are concerned about their reputations. However, accepting money does not affect reputation — it’s all the other stuff that tends to go along with accepting large donations that affects reputation. This includes things like naming buildings, giving out awards and recognitions, or adding donors to lists of high-level givers. The funny thing is that these are all things that institutions, not donors, have control over. As E. P. Clapp at The Huffington Post suggests:
UCLA should have been more strategic. It should have taken the money, but stipulated that it would not name a building, research center, or anything else after Sterling, nor give him an honorary degree or any other award.
By doing so, UCLA would have put the ball in the Clippers owner’s court. If Sterling accepted those terms, his money might contribute to research that could save lives. But if he rejected those terms, it would expose the kind of phony philanthropist he really is — donating the money only to wash his dirty reputation and burnish his ego.
The problem with this suggestion may be that UCLA already made an agreement to do those (or similar) things by accepting Sterling’s money. If so, the only way to get out of such an agreement, and avoid reputational risk, would be to return the money — in which case, UCLA and other nonprofit organizations may not be so sterling in their own motives as they would have everyone believe.
To be sure, I don’t know what agreements may or may not have been made between Sterling and any particular nonprofit institution related to donations. And as I stated above, private organizations are perfectly within their right to accept or reject money given to them on whatever basis they determine.
But for my own part, I have much more respect for organizations who are keeping Sterling’s money, such as the L.A. Union Rescue Mission, which stated, “We take money from all kinds of bad people all the time.” Not only is this a more pragmatic view, but it is a more ethical one. Because let’s face it, nobody is perfect. If nonprofits refused to accept money from everyone who ever did something hateful or unethical or “wrong” under whatever definition you choose, then they would never accept any money at all. That Sterling has a higher profile and more money than everyone else doesn’t change the paradigm; it only shows that some nonprofit organizations are hypocrites, too.
If I were the CEO of a nonprofit to which Sterling had donated, this would be my response to the question of whether my organization was keeping Mr. Sterling’s donation:
That’s the dumbest question I’ve ever heard. Of course we’re keeping the money! Not only are we keeping it, but we are going to use it to better fulfill our organization’s mission. After this statement, we will no longer acknowledge the existence of Mr. Sterling, recognize his donation in any way, nor offer any incentives for future donations. However, we do hope that Mr. Sterling goes to hell soon, and when he leaves, we hope he donates the remainder of his estate to us.
And now you probably understand why I am not, nor likely ever will be, the CEO of a nonprofit organization.