Would You Have Accepted Money from Jeffrey Epstein?

A reporter for The Miami Herald interviewed me recently about whether charities should have rejected charitable contributions from Jeffrey Epstein, an admitted child sex trafficker who faced new accusations prior to his suicide earlier this month.

Now, I’ll ask you, would you have accepted a donation from Epstein?

Your knee-jerk response might be, “No!” Or, you might have a more emphatic and colorful response. It’s even possible that you would have accepted a charitable contribution from Epstein. You certainly wouldn’t be alone. Many nonprofit organizations have accepted substantial gifts from Epstein including Harvard University, the Ohio State University, the Palm Beach Police Scholarship Fund, Verse Video Inc. (a nonprofit that funds the PBS series Poetry in America), Ballet Florida, and other nonprofit organizations. Some nonprofits accepted Epstein’s money before his legal troubles, some after his initial plea deal on prostitution charges, and some around the time of the swirling accusations of child sex trafficking this year.

So, once again, would you have accepted a donation from Epstein?

As I told the reporter from the Herald, it’s not a simple question. It’s complex. It’s nuanced.

One factor is timing. Some might consider donations made before Epstein’s legal troubles to be completely problem-free. On the other hand, some charities might have more of an issue with an Epstein contribution made after his 2008 plea deal. However, after Epstein served his sentence, some charities would have been willing to accept an Epstein contribution once again.

Another timing issue involves whether a nonprofit had already spent Epstein’s donation prior to his legal difficulties. For example, Harvard says it spent Epstein’s donation by that time. In other words, there was nothing left to return.

Another factor to consider is the type of recipient charity. For example, a university might have been more willing to accept an Epstein donation than a child welfare charity would be.

Consideration of Epstein’s philanthropy gets even more complicated when we consider broader cultural issues. For example, in our society, we believe that ex-felons have paid their debt to society and, therefore, should be free to live life as full citizens including having the right to be philanthropic. Furthermore, we believe in a presumption of innocence. Epstein was not convicted of any new charges prior to his death.

More broadly, we must consider whether charities are supposed to investigate and pass judgment on donors before deciding whether to accept a gift. Many major donors, I dare say, have done something that they probably would prefer you didn’t know about, even if not rising to a criminal level. When does due diligence turn into snooping? Do you want your organization to have a reputation of hyper-scrutinizing prospective donors? Would major donors want to submit to that kind of treatment or would they simply take their money elsewhere?

When doing your due diligence, keep in mind that some of this nation’s greatest philanthropists were also troubling figures such as Andrew Carnegie, John Rockefeller, Henry Ford, and others. Charities are not in business to turn away contributions. They exist to take donations and use the funds to enhance communities and the world.

For example, I know of an order of nuns who accepts donations from known Mafia figures. They believe that they can take the funds and do more good with it than would be done if the money were left in the hands of the mobsters.

Having said that, the issues surrounding Epstein are certainly complex. I’ve only touched on some of the issues. The Miami Herald did a great job exploring some of the complications. You can read the article by clicking here.

To navigate a complex ethical dilemma, charities should consider all possible courses of action from multiple perspectives. In my article in the International Journal of Nonprofit and Voluntary Sector Marketing, I wrote:

What is the Most Important Thing You Can Learn from Recent Nonprofit Scandals?

Recent incidents at Michigan State University, The Ohio State University, Oxfam Great Britain, The Presidents Club Charitable Trust, Silicon Valley Community Foundation, and elsewhere remind us that the nonprofit sector is not immune to wrongdoing and scandal.

If you’ve never worked for a charity reeling from scandal, there’s a good chance you will one day. Even if you don’t work directly for a scandalized charity, you could still be affected by a loss of public trust if a similar nonprofit finds itself under the spotlight for misdeeds.

For those reasons, it is essential that you learn the most important thing about how to survive a scandal.

Three broad types of scandals can affect a nonprofit organization negatively:

1. Self-inflicted scandals beyond your control. Here’s an example of a situation that was beyond the control of fundraising staff. Oxfam Great Britain was banned from operating in Haiti and the organization’s country director was forced to resign following allegations of inappropriate sexual behavior. Four other employees were fired for “gross misconduct.” While the frontline fundraising staff was not at all involved in the scandal itself, they nevertheless had to deal with the aftermath.

2. Self-inflicted scandals you could have avoided. We saw this when the Ohio Attorney General’s Office accused the charity Cops for Kids of defrauding donors of $4.2 million. Of all the money it raised over a 10-year-period, the charity spent less than two percent on charitable programming. This scandal allegedly involved fundraising staff as well as senior staff engaging in fraudulent behavior. The solution to this type of scandal is simple: Do not misbehave. Obey the law and adhere to the Association of Fundraising Professionals Code of Ethical Standards, the International Statement of Ethical Principles in Fundraising, and/or your nation’s own fundraising code of ethics.

3. Guilt-by-similarity scandal. People in Scotland experienced this several years ago. A cancer charity was embroiled in a well-publicized scandal. As expected, that charity saw a sharp decline in contributions. However, there was also an unpleasant, broad side effect. Completely unaffiliated cancer charities in Scotland also experienced a deep drop in donations resulting from broad public mistrust of all cancer charities. It took the innocent charities nearly a year to recover even with a coordinated campaign to restore public confidence.

Other than avoiding problems in the first place, always a good idea, what can you and your organization do to ensure it can survive a crisis or scandal?

The answer is simple, though the execution is not: Build strong relationships with donors. It takes effort, financial resources, and time. However, it’s an investment well worth making.

Recently, a reporter for The Columbus Dispatch contacted me. Rob Oller sought my commentary about the scandal involving Urban Meyer, The Ohio State University football coach. You can read about the situation on your own since there’s no need for me to get into the details here. Suffice to say that the coach has received a three-game suspension, but not before Bob Evans Restaurants withdrew its corporate sponsorship of Ohio State football.

Oller asked me about how scandal affects charitable giving. I told him, “It depends on the institution and quality of the relationships with its donors over time. The stronger the relationships the more likely the institution is able to weather the controversy.”

When Should You Refuse a Gift?

From opposite sides of the Atlantic Ocean, I learned of two stories that both raise an important question:

When should a charity refuse to accept a donation?

The first story concerns Lucy the Elephant,  an historic six-story tourist attraction in the US. Built in 1881, the wood and tin structure is in need of major repairs. The nonprofit organization that operates Lucy the Elephant is raising money for the project.

Hearing about the repair effort, the nonprofit People for the Ethical Treatment of Animals offered to make a significant, though not huge, donation. However, the gift would come with major strings attached.

PETA wanted to use the attraction for anti-circus messaging. “PETA wanted to decorate Lucy ‘in a way that would educate visitors about the grim lives facing elephants in circuses.’ That would have included shackling one of her feet and affixing a teardrop below one eye,” according to the Associated Press.

However, the board of trustees for Lucy the Elephant rejected the PETA offer. Richard Helfant, the CEO of Lucy’s board of trustees, said that accepting PETA’s terms would risk scaring or upsetting children who visit the site. “Lucy is a happy place,” he said. “We must always ensure that children who visit Lucy have a happy experience and leave with smiles on their faces. Anything that could sadden a child is not acceptable here at Lucy.”

In other words, the board of Lucy the Elephant found that the conditions of the PETA gift offer were not in alignment with the organization’s own mission and, therefore, it could not accept the donation.

Meanwhile, on the other side of the Atlantic, a children’s charity in the UK was offered a gift from the Jimmy Savile Trust. Under normal circumstances, this would be considered great news. Jimmy Savile  was a huge celebrity in the UK. He worked as a DJ, radio and television personality, dance hall manager, and a major charity fundraiser. He was sort of the Dick Clark of the UK.

Unfortunately, Savile also had a very dark side. Following his death in 2011, hundreds of people came forward to accuse the media star of sexual abuse. His alleged victims were eight to 47 years old at the time of the abuse. A Scotland Yard investigation and an ITV documentary looked into the allegations and the alleged cover up of the crimes.

In 2014, UK Secretary of State for Health Jeremy Hunt delivered a public apology in the House of Commons:

Savile was a callous, opportunistic, wicked predator who abused and raped individuals, many of them patients and young people, who expected and had a right to expect to be safe. His actions span five decades — from the 1960s to 2010. … As a nation at that time, we held Savile in our affection as a somewhat eccentric national treasure with a strong commitment to charitable causes. Today’s reports show that in reality he was a sickening and prolific sexual abuser who repeatedly exploited the trust of a nation for his own vile purposes.”

So, why would a charity, particularly a children’s charity, even consider accepting a gift from the Jimmy Savile Trust?

Raising the issue in the Institute of Fundraising Discussion Group on LinkedIn, the Fundraising Manager for the charity and participants provided some insights: