Was it right for various museums and galleries to cease taking funding from the Sackler trust due to the Sackler family’s ownership of Purdue Pharma, a company selling the prescription painkiller OxyContin? Was the Sackler Trust right to respond by ceasing its giving? How and where do we draw lines with regards to the sources of money that we accept through philanthropy? How do we protect the reputation of our institutions, whilst also generating the maximum philanthropic income to deliver our mission?
These questions are hard. They always have been.
I once experienced a discussion which went along the lines of, “We are happy to accept the gift from X, but we do not want the building named after X.” To which I responded by asking whether it could ever really be okay to accept a gift from someone who, for whatever reason, you would not want a public association with? Just because the name isn’t on the building doesn’t mean that it won’t be reported and damage the reputation of the institution.
The reality is that fundraising, like all activities, involves risk. Reputational, legal, financial and ethical risk. Navigating what is acceptable risk and what is not is complex and challenging. Sometimes we seem to find ourselves taking potentially contradictory positions as we explore the risks – for example I have often wondered why trustees feel it is okay to accept money from drinks companies but not tobacco companies. Or why the arms industry is on the no-no list and mining companies aren’t. At one end of the spectrum we have the view that all money is ultimately dirty in some way and it is impossible to draw lines; “The good with which the money does washes it clean”. At the other end we have the view that by accepting money that has been made in ways which cause environmental or social harm we collude with those who cause the harm and ‘let them get away with it’, and we are therefore responsible for ‘laundering their reputations’.
We must find an effective, professional and rational way to manage the risks associated with fundraising and put in place a robust, consistent, transparent approach to their governance.
The first step is to understand what our values are and what our appetite for risk is. This should be discussed at the governing body/board of trustees. This group should agree guiding principles.
Charity trustees must balance their duty to maximise income to the organisation with their duty of care to the institution and its beneficiaries.
Personal views must be put aside. Just because one might personally disagree with smoking but is happy with drinking alcohol, it does not automatically mean that the institution you are a governor of should not take tobacco company money but can take drink company money.
We must be clear as to how far we go in the supply chain as we consider the source of the money. In the past, trustees often felt that as long as the funds came from a charitable trust then the source of the money into that trust was less important. The case of the Sackler Trust challenges this view.
These discussions can excite passionate views. Sometimes it can appear to be so hard to reach an agreed position that it’s tempting to take the view that the matter should be discussed on a case-by-case basis. However, this is a recipe for disaster for fundraising governance.
To be empowered to go out and help an institution to secure extraordinary gifts, leaders and their fundraisers must be protected by a strong policy and robust processes which, in effect, formalise the institution’s appetite for risk. They should not be put in a position where a gift has been asked for and must then be turned down.
It should always be remembered that there is as much potential reputational risk in turning down a gift as there is in accepting it. Indeed, many headlines occur when this has happened. This can damage more than one donor relationship. Were the story to go public other donors might lose confidence and trust in the organisation.
The key to avoiding this is to have checked at the outset of the process of cultivation whether there were sensitivities around X, and then have the solicitation approved.
Okay you say, it’s not that simple. Maybe X’s reputation will change over time. Indeed it may, but that gives us even more reason to have a policy in place to deal with that, should it happen. Check out X before talking about giving, accept the gift, celebrate it with pride and have a process whereby you could take down the name should X ever fail to fulfil your policy requirements.
For a fascinating insight into how a gift can ‘go wrong’, read Lord Woolf’s report on the Gaddaffi gift to LSE.
We would encourage you to do the following:
- Be clear on your institution’s core values and appetite for risk and bring these together in a ‘gift acceptance’ policy. Engage your organisation with this – risk can be amplified if your governing body thinks one thing and your stakeholders another.
- Review regularly and particularly when leadership changes.
- Gather the due diligence information on very big potential gifts before the donor is approached, and certainly before they are asked.
- Put in place an ethics committee that meets regularly, not just ad-hoc and make sure this is representative of the different parts of your organisation.
- Give that committee all the information it needs to make a decision, and be clear what you would recommend.
- Ensure everything is documented and recorded. You need to be able to show that you fully considered the options if something goes wrong in the future.
- Pay attention to related communications and have a very clear communications plan which references your gift acceptance policy.
Fundraising always carries a risk, and big gift fundraising even more so. Be sure your approach aligns with your values and that you and your organisation are on the same page when you are asking.
Susie Hills is Joint CEO for Halpin, a management consultancy designed specifically for the higher education sector. We are the home of experts in fundraising, governance, strategy and marketing.
Are you a fundraiser looking to take your career to the next level? Susie offers tailored mentoring drawing on 20+ years as a leading fundraiser. Download the flyer here.