By: Melissa Bank Stepno, Vice President of Data Insight
Last year, there was a story in The New York Times about Bard College’s decision to accept a gift from Jeffrey Epstein. To quote Leon Botstein, Bard’s president: “you cannot pick and choose, because among the very rich is a higher percentage of unpleasant and not very attractive people.”
Later in the same NYT article, while Botstein concedes that Bard would not accept money from Jeffrey Epstein today (if he were still alive, of course), since the college has specific programming for convicted felons and believes in second chances, Botstein noted that at the time of the gift, it passed the sniff test.
Of all the news stories in 2023, it might strike some as a bit odd that this is one of the stories that has been like an earwig in my brain.
However, the conversation of due diligence has been on the rise within nonprofit organizations. This is for good reason, and this is why the story has stuck with me. It is only through the proper due diligence process that a nonprofit will be able to “pick and choose.”
This post is not about supporting, nor about criticizing, specific decisions that organizations, including Bard, have made regarding specific circumstances that they have been presented with. Rather, Bard serves as an illustrative example.
Here are a few more to consider:
- A children’s hospital decided to return an unsolicited gift from a major firearms manufacturer.
- A university determined that it would not pursue a fundraising-based relationship a new international parent who was suspected of having ties to a terrorist organization.
- Another university accepted a gift from a donor who was accused of child abuse, choosing to ignore the allegations under the basis that they knew the donor well enough to trust his denial of the incident.
- An advocacy organization continues to evaluate a relationship with someone who sits on the board of a public company whose business practices go against what the nonprofit is advocating for.
- Even just last week, a situation came up within the HBG team where one of our consultants was researching a couple and learned that their son had been arrested on some very serious charges. It is not known if he will be convicted. Nor is it known if the couple – the prospects for our client’s organization – knew anything about their son’s actions.
In each of these examples, leaders at these nonprofits needed – or will need – to decide whether the potential money – the gift – is worth the potential risk – or exposure – to the organization. We may see some of these scenarios as black-and-white decisions. But they tend to be shaded in a lot of gray and take careful contemplation.
At this point, you may be thinking that this is an instructional post on how to conduct due diligence. It is not. There are other resources that already cover the “how,” including Heather Willis’s excellent Intelligent Edge post from September 2023, The Good, the Bad, and the Ugly: Comprehensive Due Diligence Research. I also encourage you to check out Apra’s Due Diligence Toolkit and AFP’s Due Diligence Playbook.
Rather this post is about advocating for a systematic approach that will allow your organization’s leaders to “pick and choose” the appropriate shade of gray for your specific circumstances. Just like when you pick a paint color for your wall (did you know that Benjamin Moore has 193 shades of gray?), one shade does not fit all.
Of course, due diligence research should be part of this framework, but so should a solid gift acceptance policy, as should be considering the broader role of the prospect researcher beyond simple information gathering.
Gift Acceptance Policies
Every nonprofit organization should have a gift acceptance policy that is formally approved through both staff leadership and the board of directors. The best policies address what considerations the organization will want to take when presented with questionable gifts or prospects. This includes character and industry assessments of potential donors, as well as the types of gifts the organization will (or won’t) accept and whether or not there are any conditions under which a gift would be turned down.
Offering specific examples, while also underscoring that no set of examples will be exhaustive, is the best course of action.
Once in place, this policy serves as an initial framework for evaluating an organization’s shades of gray – in other words, how an organization will “pick and choose.”
Many organizations, such as The Chronicle of Philanthropy, Dartmouth College and the American Orthopaedic Association (just to name a few), share their Gift Acceptance Policy directly on their website, assuring that there is full transparency around their decision making approach.
The Association of Donor Relations Professionals and aasp both offer best practice guides for those looking to craft a gift acceptance policy (note that the assp document is more recent but requires a membership to access).
The National Council of Nonprofits and the Markkula Center for Applied Ethics at Santa Clara University’s Controversial Donors: A Guide to Ethical Gift Acceptance for Nonprofit Organizations also offer good advice.
The Role of Prospect Research
It goes without saying that a major portion of a prospect researcher’s job is finding information. However, in some instances, finding information is the easiest part. And, over time, as both technology and AI continue to improve, it is also the part that is most likely to be replaced by automation.
Prospect researchers have a unique skill set beyond being just information gathers. This skill is to interpret, synthesize and draw conclusions from the information. While taking a “just the facts” approach is critical so that implicit bias does not get in the way, the true value of the prospect research industry is to provide analytical guidance.
Note that in this instance “analytical” is not referring to the type of data analytics that might require a sophisticated process, algorithm, code or procedure. Rather, Merriam Webster also defines “analytic” as “skilled in or using analysis especially in thinking or reasoning.”
As strategic partners in the fundraising process, after information has been collected, prospect researchers should also be called upon to “think and reason.” In other words, we must be part of the systematic approach to assess the grays that may present themselves to an organization. Ultimately, while the final decision likely won’t sit in the hands of a researcher, we’ve come far enough to expect that we firmly have a voice in the decision-making process.
Contact Melissa Bank Stepno at: firstname.lastname@example.org.