| |
|
•
NEWS
• SEARCH
|
|
|
When
Donors Go Bad
Have you been following the story of Alberto Vilar, the "super-patron
of the arts," as the New York Times dubbed him? Ranked 327th on Forbes'
list of wealthiest Americans, Vilar, founder of New York-based Amerindo
Investment Advisors, is renowned for the huge gifts that he has made to,
among others, New York's Metropolitan Opera and Metropolitan Museum of
Art, Berlin's American Academy in Berlin, the Royal Opera House in London,
the Kennedy Center in Washington, DC, and his alma mater, Washington and
Jefferson College.
A tech investor and advisor, Vilar was charged recently with defrauding
investors of millions of dollars. Among other charges, Vilar is said to
have pocketed a $5 million investment for personal use. As this goes to
press, Vilar is being held in lieu of bail at the Metropolitan Correctional
Center in Manhattan.
What, you may well ask, does such high-stakes chicanery have to do with
me? While your nonprofit may not run in such august-or notorious-circles,
the Vilar case begs an important question of concern to all nonprofits.
If a donor to your organization - be it an individual, corporation or
foundation - is in the newspapers for all the wrong reasons, should you
ignore the bad press and take it in stride? Should you somehow distance
yourself from the donor? Should you return the gift?
A large foundation in northern California was in the news a few years
ago when word leaked out about the huge salary and perks awarded to the
President. While we are reasonably confident that no grantee returned
a grant from that foundation due to the bad press, we're also certain
that new grantees did not go out of their way to trumpet news of the foundation's
grants in press releases and e-mail blasts.
It seems to us that the issue of malfeasance is more pressing in the realm
of individual gifts. Let's imagine that you've just completed a $10 million
capital campaign. The lead gift of $2 million was made by a gentleman
who was only too happy to have the building named after him. Two months
after his generous gift, said gentleman is brought up on charges of unseemly
activities with underage girls. The case goes to trial and he's found
not guilty.
Do you remove his name from the building? After all, he was found not
guilty. Do you strike him from the list of honorees at your event celebrating
the successful conclusion of the capital campaign? Do you pretend that
nothing has happened?
And what if he had been found guilty? What is your responsibility in dealing
with donors who have a long-standing and heartfelt interest in your organization
but who engage in unsavory or illegal practices? The knee-jerk reaction
is to sever all ties with them, but are we hurting ourselves in the process?
We encourage ZimNotes readers to respond by e-mail to this conundrum.
One size manifestly does not fit all when it comes to such difficult ethical
dilemmas. While we see no reason, for example, to excise the name of a
malefactor from your list of major donors, it is an entirely different
matter if your building is named after someone who is doing hard time.
One suggestion: If this issue does arise for you (and we fervently hope
it does not!), convene a small focus group of board members and major
donors to solicit their opinions and recommendations. It is better to
share the responsibility for such difficult decisions than to put everything
on the shoulders of the beleaguered executive director.
As we note in Boards That Love Fundraising, people make financial
contributions to strong organizations, not to organizations in crisis.
Crises or weaknesses, however-particularly if they reach the press-cannot
be ignored. If you are confronting the issue of a notorious donor, you-and
here we mean everyone in your organization speaking in one voice--must
explain how you are taking steps to avoid such problems in the future.
You must also emphasize your determination to act in an accountable manner.
With nonprofit accountability so prominent in the press of late, the determination
of your organization to act in a straightforward and transparent manner
will impress donors, even when you are saddled with one donor's unsavory
practices.
Copyright
2007 Zimmerman Lehman.
This information
is the property of Zimmerman
Lehman. If you would like to reprint this information,
please see our reprint
and copyright policy.
| |
|
