Update: Spelman College Returns Gift from Bill Cosby

Seven months ago, I first reported that Spelman College announced the suspension of an endowed professorship in humanities that was funded by Bill and Camille Cosby. At that time, I called on the College to either renegotiate the gift or return it to the Cosby family.

Post No Bills by Jon Mannion via FlickrOn July 26, 2015, the College revealed its decision to terminate The William and Camille Olivia Hanks Cosby Endowed Professorship and to return the donation to the Clara Elizabeth Jackson Carter Foundation, established by Camille Cosby.

Last December, Spelman issued this one-paragraph statement:

December 14, 2014 — The William and Camille Olivia Hanks Cosby Endowed Professorship was established to bring positive attention and accomplished visiting scholars to Spelman College in order to enhance our intellectual, cultural and creative life; however, the current context prevents us from continuing to meet these objectives fully. Consequently, we will suspend the program until such time that the original goals can again be met.”

Amid mounting accusations of sexual assault involving Bill Cosby, the College decided to terminate the endowed professorship. As of this publication date, Cosby has not been charged with any related crime.

As I stated in my December post, nonprofit organizations are ethically required to use a donor’s contribution in the way in which the donor intended. The applicable portions of the Donor Bill of Rights “declares that all donors have these rights”:

IV. To be assured their gifts will be used for the purposes for which they were given….

V. To receive appropriate acknowledgement and recognition….

VI. To be assured that information about their donations is handled with respect and with confidentiality to the extent provided by law.”

The relevant passages from the Association of Fundraising Professionals Code of Ethical Principles state:

14. Members shall take care to ensure that contributions are used in accordance with donors’ intentions….

16. Members shall obtain explicit consent by donors before altering the conditions of financial transactions.”

By returning the gift after deciding not to use it for the intended purpose, the College acted ethically. However, a number of other ethical questions remain unanswered:

  • Did the gift agreement between the Cosbys and the College allow for the termination of the endowed professorship? If not, did the College obtain consent from the Cosbys to do so?
  • Did the College attempt to renegotiate the terms of the gift (i.e.: the name of the endowed professorship) since the money came from Camille Cosby’s foundation rather than directly from Bill Cosby?
  • Why did the College choose to go public with this news rather than handle the matter “confidentially” as required by the Donor Bill of Rights?

Other than issuing a brief statement, a spokeswoman for the College refused to answer any questions on the subject.

The answers to the questions might show that Spelman College acted well within its rights and completely ethically. Unfortunately, we simply don’t have a complete picture of the situation at this point.

In my December post, I wrote:

If [Spelman College] is not going to use all or part of the Cosby donation as the family intended, it should return an appropriate portion of the funds to the family.”

So, while we do not have a full picture of the situation, I’m nevertheless pleased that the College has at least taken the important step of returning the gift.

For more information about the complex subject of returning a supporter’s donation, read my post: “Can a Nonprofit Return a Donor’s Gift?”

That’s what Michael Rosen says… What do you say?

 

UPDATE (Dec. 29, 2015): Bill Cosby has been charged for sexual assault in Pennsylvania. While approximately 40 women have accused Cosby of sex crimes, this is the first time he has been officially charged with a crime. Cosby is free on bail. You can read more by clicking here.

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21 Responses to “Update: Spelman College Returns Gift from Bill Cosby”

  1. I am confused. I read two newspaper articles recently that stated that Spelman indefinitely suspended the Professorship, not that the college had returned the funds. Please share the source you used for the statement. Thanks.

    • Diane, thank you for your inquiry. Like you, I was also a bit confused by the news reports I read. So, seeking clarification, I contacted Audrey Arthur, Senior Media Specialist in the Spelman College Office of Communications. Here is what Arthur stated to me:

      The William and Camille Olivia Hanks Cosby Endowed Professorship at Spelman College has been discontinued and funds related to the professorship have been returned to the Clara Elizabeth Jackson Carter Foundation.”

      Having “discontinued” the endowed professorship, Spelman College has done the right thing by returning the related funds.

  2. Thanks for writing about this topic. I appreciated your discussion of the various ethical issues involved. I do have to wonder if they tried to renegotiate the terms of the agreement in any way or what happened.

    As a general matter, though, I’m not sure how I feel about Spelman’s decisions regarding this matter. As you say, returning the gift is a better resolution than simply suspending the professorship. I worry, though, about the implications of this move as a precedent. Yes, I understand that in the present environment it looks bad for a historically black women’s college to appear to be honoring Cosby by having a chair in his name, but in the absence of either a criminal charge or a conviction, the implication seems to be that only the blameless are fit to be philanthropists.

    • Dean, thank you for raising an interesting point. Many of America’s leading philanthropists through history were robber-barons, bootleggers, drug dealers, murderers, and other assorted scoundrels. Charities must walk a fine line when it comes to evaluating the source of a donation and whether or not to accept or refuse it. Having a solid gift-acceptance policy in place can certainly be helpful. Knowing how to use an effective ethical decision-making model is also very helpful. For those interested in learning more about ethical decision making, checkout a related article I wrote by clicking here.

      • Hi Michael, Thanks for your response. Yes I was going to make a similar point about some famous 19th century philanthropists and all of that, but I figured I was going on too long already and that it might be a subject for me to write about at my own blog.

      • Dean, go for it. I think exploring the subject of when a charity should or should not accept or return a gift would make an interesting post, especially when looking at the historic view. I look forward to reading it.

  3. Thanks for the insight. Until now, I was unfamiliar with the Donor Bill of Rights, and the Fundraising Professionals Code of Ethical Principles…. On another note, I totally disagree with Spelman’s decision to return the donation, as there is no basis to do so absent a conviction.

    • Blacks4Bill, thank you for sharing your thoughts. I understand your point. Bill Cosby is not likely to face criminal charges since the statute of limitations has expired for his accusers at this point. However, he is still likely to face civil lawsuits. For example, a judge recently ordered Cosby to give a sworn deposition in a lawsuit involving an accusation of misconduct dating back to 1974. So, while we may never have a criminal verdict concerning Cosby, we may eventually have a civil verdict. Time will tell.

  4. Hi Michael J. Rosen, CFRE! Since 60% of the $20 million donation was for the Camille Olivia Hanks Cosby, EdD Academic Center, has that $12 million been fully spent since 1988? As the remaining $8 million was for endowing chairs in the Fine Arts, Social Sciences and the Humanities, how much of those funds (if any) have been returned? As you know, Johnetta B. Cole was the President of Spelman College at the time of Cosby’s donation, she was President of Bennett College where Cosby then made an $800,000 donation, and she is the director of the Smithsonian Institution National Museum of African American Art where Cosby currently has a showing of his private collection and he has made a $750,000 donation, so his professional association with Cole is extensive. I suspect there is something rotten in Denmark about this Spelman College Cosby donation, unless you have verification about how much money has actually been returned. Thank you for your time!

    • Brad, thank you for the additional information. Unfortunately, despite my efforts, the staff at Spelman College has not been willing to provide additional information. It would be appropriate and helpful for Spelman to be more transparent. During times of controversy and/or crisis, organizations tend to develop a circle-the-wagons mentality rather than cultivating a transparent, open posture.

      • Thank you for your quick reply, Michael J. Rosen, CFRE! To your knowledge, is there a 25 year “chilling period” on donations to educational institutions that neither the donor or the recipient can renege on without substantial fines or penalties? That type of legal restriction can explain the long (and otherwise inexplicable) delay for Spelman College (or the remaining “no comment” education institutions) to take a negative public posture on the Bill Cosby allegations. {Also, it would surely shed light on the timing of the Smithsonian exhibition of Cosby’s private art collection being opened just as the scandal began to get traction.} The $20 million given to Spelman College is almost 7 times greater an amount than Cosby has given to any other institution, and if it was given for reasons other than what was explicitly declared at the time (a donation is essentially a contract, so a contract containing false information would be void under the law), would Cosby’s donation constitute a unique-yet-criminal fraud on his part? Are we looking at a Bernie Madoff situation, where a trusted public figure (Madoff was head of the SEC) uses their access to high finance; Cosby is worth over $400 million; to commit high crimes? As there is no statute of limitations on fraud, could Cosby be charged for that high crime? If Al Capone was convicted for tax evasion, why not go after Cosby for defrauding the donation system at educational institutions such as Spelman College? If the crisis is that Spelman College only received a sliver of the promised $20 million donation from Cosby, then that would certainly explain their reluctance to be more transparent.

      • Brad, you have raised some interesting questions that could be easily answered if Spelman College would be transparent regarding the Cosby donation. As I’m not a representative of Spelman and do not have access to the details of the situation, I cannot really answer your questions. However, I will indulge in some speculation.

        I suspect that Spelman was reluctant to return the gift for the reasons any charitable organization would be. Nonprofits are not in business to return donations. Such gifts are needed, and charities work hard to secure them. Furthermore, there are limitations placed on charities by government regulators. (Please see my post “Can a Nonprofit Return a Donor’s Gift?”) Finally, Bill Cosby has never been charged with a crime let alone found guilty of one. In the USA, people are entitled to a presumption of innocence. It’s enormously problematic for charities to make decisions on rumor alone.

        Regarding the issue of fraud which you have raised, I don’t see any. However, assuming there was a gift agreement, it could depend on the wording of the agreement. In the absence of any evidence to the contrary, I believe we should assume that Cosby and Spelman both acted in good faith.

  5. If money is considered speech, as in Citizens United, and charities are public institutions, then why does a charity have a right to refuse donations at all, even if they don’t like the source? I would refer to the case of the environmental nonprofit you were on the board of who received a donation from a landfill operator. Clearly the landfill operator was trying to make some sort of political statement, and by refusing this donation, was the charity (who receives Federal tax benefits) not suppressing his position-based speech?

    I also fail to see what Cosby’s legal status has to do with the above situation. Does the status of his criminal or civil proceedings have a bearing from a legal point of view regarding whether a charity may refuse a donation and not be suppressing speech?

    • Curious, thank you for your questions. While I’m not a lawyer or Constitutional scholar, I just want to point out that our “Freedom of Speech” enshrined in the First Amendment to the Constitution restricts the power of the government, not private citizens or organizations. The First Amendment ensures that the government cannot abridge freedom of speech. So, no rules or laws can sacrifice a charity’s freedom of speech in deference to a donor’s freedom of speech. When someone gives us a gift, we have the right to decline acceptance.

      Charities must consider how accepting a gift will impact the organization and its stakeholders. It’s an ethical imperative. Charities are not required to accept donations that can cause the organization harm such as making it more difficult to raise money. Furthermore, charities are not required to accept contributions in violation of the organization’s mission. In the cases I’ve described, the nonprofits have reached the conclusions that accepting or retaining the donations would be harmful.

      • Thanks for your reply. OK, I can see how accepting a gift from Cosby might make it harder to raise money in the future, since fickle public opinion is the determinant of the charity’s ability to raise money.

        Certainly private organizations have the right to decide who can contribute or be a member, with the possible exception of large groups that are considered public accommodations.

        I guess I was confused about when a public benefit charity becomes subject to the rules requiring them to allow freedom of speech from their customers or donors.

        Are there any circumstances under which a charity may refuse anonymous donations?

      • Curious, thank you for the interesting discussion.

        Regarding “public accommodation” type of pressures being placed on nonprofit organizations, I don’t know of any effort regarding the acceptance of donations. Historically, the courts and regulators have been very deferential to nonprofit organizations.

        Regarding your question about refusing anonymous donations, it depends somewhat on what you mean by “anonymous.” A charity would be foolish to turn away a completely anonymous contribution (i.e., a bag of cash left outside the office front door). However, such gifts seldom occur. With the typical anonymous gift, the donor is known at least to the head fundraiser, the CEO, and key board members. So, the gift is not completely anonymous. Furthermore, there is always the possibility that the anonymous donor will leak news of the gift; the television show Curb Your Enthusiasm did a fantastic episode based on this premise. So, I believe it’s important that charities consider acceptance of anonymous gifts in much the same way as they would standard gifts. With anonymous gifts, charities still have the power to accept or decline the gift. Ideally, the charity will have a gift acceptance policy that will help guide that decision.

        By the way, if you have not read my post “Can a Charity Return a Donor’s Gift,” you might want to check it out.

      • Michael, thanks for your comments regarding anonymous gifts. Yes, I have read your column “Can a charity return a donor’s gift.” I also found this article quite illuminating.

        https://nonprofitquarterly.org/2010/03/21/when-a-donor-becomes-tainted/

        It is actually quite easy to give anonymously through intermediaries such as Fidelity Charitable Gift Fund. I am not sure how common it is, but it is required in the New Testament anyway: Matthew 6:1-8

        The possibility that charities might refuse anonymous donations was suggested to me by the following passage from the link above:

        Bishop Ramón Godinez of Aguascalientes holds a similar view and asserted recently that while the Roman Catholic Church in Mexico does not knowingly accept donations from drug traffickers, he does not consider it the Church’s responsibility to investigate the source of its numerous anonymous donations.

      • Curious, charities are not in the business of turning away support. The default position should be to accept gifts. I see no reason for charities to automatically refuse anonymous gifts just because they are made anonymously. However, charities should reserve the right to refuse or return donations under certain circumstances (ideally identified in a formal gift acceptance policy before it ever becomes an issue).

        By the way, I want to comment on the issue you raised concerning Fidelity’s Donor-Advised Funds and the ability to make anonymous donations through DAFs. While DAFs do make it easy for donors to make anonymous contributions, the fact is that relatively few choose to do so. Consider these numbers: Vanguard Charitable reports that 95 percent of its DAF grantmakers share their name with the charities they support. Schwab Charitable, another large DAF management organization, says that 97 percent of its grantmakers share their name. Fidelity Charitable reports that 92 percent of its grantmakers provide information for nonprofit acknowledgment.

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