Nonprofits Become Beneficiaries of Politically Questionable Donations
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This article was reported in the Wall Street Journal by Elizabeth Williamson.
Charities once refused donations carrying even a hint of scandal, but many now find themselves the unwitting beneficiaries of the nation’s financial scandals and, with the substantial drops in giving in 2008, feel they aren’t in a position to be so selective, the Wall Street Journal reports.
Today, nonprofits often accept — and in some cases, seek out — campaign contributions from disgraced Wall Street firms and financiers that have been unloaded by politicians eager to escape public outrage, including President Obama and several members of Congress. In February, Senator Bill Nelson (D-FL) gave Dignity U Wear, a charity in Jacksonville that distributes new clothing to needy families, all of the $45,900 campaign money he received from disgraced Ponzi scheme financier R. Allen Stanford. And a former campaign aide said the president gave theChicago Coalition for the Homeless $4,600 that he had received from Stanford.
Ellen Roman, executive director of the Boys and Girls Clubs of Southeastern Connecticut, said her organization got $4,000 from Senate Banking Committee chairman Christopher Dodd (D-CT), who received the funds as a donation from fallen mortgage giant Countrywide Financial Corporation. Roman said if she had known where the contribution originated she might have asked her charity’s national office to review it, but added that “it’s very challenging times right now [and] I do have to look at what kind of resources I have.”
Public figures in Washington also have been wary of accepting fees from companies that later received federal bailout funds. For instance, White House economic adviser Larry Summers listed among the honoraria he gave to charity a $45,000 speaking fee he received from Merrill Lynch, which last year was acquired by Bank of America, a high-profile recipient of billions from the government’s Troubled Asset Relief Program.
Deciding which donations to accept, especially at a time when public sensitivities about financial improprieties are running high, can be a complicated calculus for charities and nonprofit organizations. “Organizations weigh how much of an assault on their integrity this is, and whether they have the credibility to withstand that assault,” said Gene Tempel, president of the Indiana University Foundation. “You either damage your integrity a little bit, or you don’t serve some people.”
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