News out of Columbus, Ohio, provides organizations with a helpful playbook to thoughtfully and ethically handle a gift from a “toxic donor.”
After an internal Ohio State University (OSU) investigation revealed that accused sex trafficker Jeffrey Epstein gave or pledged more than $335,000 to the school, officials announced plans to make a contribution of the same amount to the Ohio Attorney General’s Human Trafficking Initiative.
At first glance, OSU’s response looks like a cut-and-dried example of an organization returning a toxic donation with minimal fuss. As a rule, every organization should provide an equivalent sum of the donation to a charity linked to the donor’s offense, right? Not so fast. If organizations’ well-intentioned, middling and frequently illogical responses to gifts from donors like Epstein, the Sacklers and Bill Cosby tell us anything, it’s that returning a toxic gift is easier said than done.
Here are 11 reasons why some organizations are reluctant to return toxic donations.
1. It’s complicated. Spelman College’s efforts to return a $20 million gift from Bill Cosby and his wife Camila provides an illuminating look into how a seemingly simple process can be stymied by an agreement’s arcane language, state charitable giving laws, and the effects of compounded interest. Revoking naming rights is especially tricky, as we’ve explored in the past, since they are typically enshrined in legal gift agreements.
2. The organization lacks a formal revocation policy. Many organizations simply don’t have established guidelines around returning a gift. Without an “escape hatch,” says University of South Florida’s Deni Elliott, “the only way to take donors’ names down is often by repaying them or their heirs. Adjusted for inflation, these repayments can be quite expensive.” Of course, this escape hatch is harder to access if donors or their heirs decide to put up a legal fight.
3. The policy isn’t airtight. Former University of Virginia President Robert O’Neil said an organization’s guiding principle in crafting a policy should be the extent to which the recipient’s alleged actions come into “significant conflict” with the university’s ideas. While that sounds practical when it comes to cases like that of Epstein’s, other examples of questionable donor behavior, like dressing as a Nazi character from a television sitcom at a Halloween party 40 years ago, aren’t as irrefutably egregious.
4. The organization does not return gifts or rescind honorary degrees. Juilliard School in New York gave an honorary doctorate to actor Kevin Spacey in 2000. After individuals accused Spacey of sexual misconduct, the school said, as policy, it does not rescind such honors.
5. The punishment doesn’t fit the crime. David Koch serves as a good example here. “Though his politics were opposed by many,” said Jeffrey S. Flier, M.D., Harvard University Distinguished Service Professor, Koch’s “substantial philanthropy was accepted by diverse New York arts institutions and several leading cancer centers, presumably following internal debate about balancing potential adverse effects on image and reputation against the benefits to mission.”
Meanwhile, in February, GOP mega-donor Rebekah Mercer stepped down from the board of the American Museum of Natural History after staffers called attention to her family’s anti-science philanthropy over the years. (The Mercer Family Foundation had donated at least $1.6 million to the museum.)
6. The donation was small; what’s the point of returning it? In defending her employer’s decision to hang on to funding from Saudi Arabia after the murder of journalist Jamal Khashoggi, University of California, Berkeley spokesperson Roqua Montez said that the kingdom’s support represents only a small fraction of the contracts and grants that go to researchers.
7. The donation is linked to a noble cause. In the aftermath of Khashoggi’s death, Tufts University spokesman Patrick Collins said school officials were closely following the “deeply concerning news,” but would remain “committed to global engagement,” as if the school couldn’t pursue that goal without the $42 million in Saudi cash it had received over the years. In contrast, the University of Southern California rejected Harvey Weinstein’s $5 million pledge to endow grant scholarships for women filmmakers, even though women remain woefully underrepresented in the cinematic arts world.
8. The donation occurred before the donor’s misdeeds came to light. One of the more repellent revelations concerning gifts from Epstein and the Sacklers is the fact that organizations happily accepted checks even after each funder’s crimes and alleged misdeeds became public knowledge. While Epstein gave Harvard close to $9 million in combined donations, a September 2019 statement from the school noted that it had not taken any money from Epstein following his 2008 conviction on charges of sex trafficking.
9. Sorry, the money’s already been spent. Let’s not let Harvard off the hook just yet. Last June, the school said it would not return any of Epstein’s donations made before his 2008 conviction. This led to predictable public outrage. Three months later, the school changed its tune, announcing it would donate the unspent portion of the roughly $9 million Epstein donated to victims’ organizations. And just how much was that unspent portion? A whopping $186,000.
I know what you’re thinking. Couldn’t Harvard, sitting on a $41 billion endowment, donate the remaining $8.8 million—or even a fraction of that amount—to victims’ organizations? After all, OSU, a state school being starved of public funding and grappling with the effects of COVID-19, certainly could have used the $335,000 in Epstein money it donated to a human trafficking initiative.
Alas, Harvard’s hands were tied, lamented President Lawrence S. Bacow. “The majority of Epstein’s gifts were designated for current use, not as endowed funds, and nearly all were spent years ago for their intended purposes in support of research and education.”
10. The donor was easy to work with. When asked whether Yale considered the source of the Sackler family’s wealth a factor in deciding whether to accept their donations and why the university ultimately did, Yale’s Dean of the School of Medicine Robert Alpern said the family had always been professional and never asked for anything in return.
We should expect more from Alpern. If the Sacklers—or any other donor—wanted nothing in return, the gift would have been made anonymously. The Sackler family’s giving was a decades-long case study in “reputation laundering.”
11. The donor is innocent. Responding to developments involving lawsuits against the Sacklers last January, Metropolitan Museum of Art (the Met) President and Chief Executive Daniel Weiss said, “The family is a large extended group, and their support of the Met began decades before the opioid crisis.”
While Weiss’ statement is accurate, Sackler heirs unconnected to the opioid crisis wouldn’t have had the millions to contribute in the first place were it not for patriarch Arthur Sackler’s aggressive marketing of pharmaceuticals that broadly fueled the abuse of prescription drugs, or the hard-charging stewardship of his sons Mortimer and Raymond, who transformed Purdue Pharma into a pharmaceutical giant. Moreover, Weiss neglected to mention if Sackler family members supported the Met after Purdue Pharma introduced Oxycontin in 1996. The opioid went on to generate $1.1 billion in sales by 2000.
Last May, the Met announced it would stop accepting gifts from the Sackler family while simultaneously rolling out its new gift acceptance policy. “On occasion, we feel it’s necessary to step away from gifts that are not in the public interest, or in our institution’s interest,” Weiss said. “That is what we’re doing here.” (The Met has no plans to remove the Sackler name from the institution.)
(Bonus reason) “Financial considerations.” Since few executives will admit to it publicly, the closest example I came up with to capture this sentiment—in an admittedly circuitous way—comes from MIT’s associate provost of international activities, Richard K. Lester.
In the wake of the Khashoggi murder, MIT president Rafael Reif commissioned an internal review to determine if the school should maintain ties to Saudi Arabia. The subsequent report did not detail the total amount of money it gets from organizations and individuals tied to the Saudi government. Its authors did, however, conclude that MIT should keep its donations and maintain ties, because terminating its engagement wouldn’t have “any meaningful ameliorative effect” on the kingdom. Then came the kicker: “The judgment I’ve reached was not driven by financial considerations,” Lester said.
Confirming Karl Marx’s contention that history repeats itself first “as tragedy, then as farce,” in January, MIT acknowledged it accepted $850,000 from Epstein from 2002 to 2017, including gifts made after his 2008 conviction on sex charges involving a minor in Florida. According to the school, two vice presidents, R. Gregory Morgan and Jeffrey Newton, had debated whether to accept Mr. Epstein’s money “in the absence of any MIT policy regarding controversial gifts.”