Over the past few days I’ve been called upon by a couple members of the media to comment on the evolving story surrounding Tom Petters, specifically about charitable contributions and the ethics of “tainted” money. With the Minnesota Council on Foundations’ work on public trust and our Principles for Minnesota Grantmakers, my approach on these issues is to examine them from an ethical point of view. Of course, I’m an association executive, not an ethicist, so I call upon my experience and background related to ethics and philanthropy.
In the Nick Coleman column in the Star Tribune, it is clear that he had a point of view that he wanted to express, and he made his opinion on these issues known. My point of view was about sustaining public trust as it relates to charitable giving. My basis for that is the work our association has done on Public Trust and Accountability.
As a result of that column, Dan Barreiro of KFAN called to interview me about these same issues. Barreiro was exploring whether nonprofits who receive “tainted” money should return that money. (Listen to the interview 
here.) It was an interesting exchange and a question that is not easily answered.
I maintain that each circumstance must be viewed separately and that there are tough decisions to be made by the boards of directors and staffs most closely involved: How much did they know about the donor when they received the contribution? Was there anything suspect that would suggest they should not accept the gift? Are there any policies that the acceptance of the gift would violate? And many more questions.
The tough part is deciding what to do when you are a worthwhile nonprofit organization or university that has received a gift, and at a much later date the reputation of the donor is called into question. Timing of when these things come to light is a big factor related to whether the gift should be returned by the nonprofit organization. Often this kind of situation doesn’t arise until well after the contribution has already been utilized for the charitable purpose it was intended to address; the money is spent and the community benefited from using the funds for their charitable purpose. The nature of these situations is that if we had known then what we know now, we may have made different decisions. Clearly, to me, these are ethical and values issues. Take a look at the Coleman article and listen to the Barreiro podcast and then let us know what you think.
Join the conversation: Should nonprofit organizations give money back if later there is a question based on the character or legal standing of the donor? On what do you weigh your decision? Who benefits and who loses?
- Bill King, MCF president
Posted by billking 
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