Should institutions accept money from bad people? – study


A few months ago, as a result of widespread criticism and legal consequences for pushing addictive painkillers on the public, the name of the Sackler family – who donated to museums and educational and medical institutions around the world – was removed from the name of Tel Aviv University’s Medical Faculty.

After he was declared a convicted sex offender, the Massachusetts Institute of Technology continued for some time to accept money from American financier Jeffrey Epstein. 

And huge tobacco companies have tried to donate large sums of money for conducting medical research and establishing charitable programs, pouring hundreds of millions of dollars into myriad cultural, health, educational and community organizations – unaware or even aware that they were helping the industry sell more cigarettes and causing deadly but preventable diseases and suffering. 

Philanthropy is essential to public goods such as education and research, arts, culture, and the provision of services to those in need. Should institutions accept donations from bad people? Ethicists are often split on whether organizations should take money from morally tainted donors. The money can support good outcomes in the world, but the reputation of the organization may suffer and the public may be outraged. 

Ethics researcher Zoe Rahwan and Dr. Christina Leuker, a risk and science communicator and experimental psychologist at Germany’s Max Planck Institute for Human Development investigated the question by surveying over 4,500 laypeople and 700 professional fundraisers from the end of 2019 to March 2021. The authors investigated several factors that might influence judgments on whether donations should be accepted, including donation size, anonymity, institution type, and the nature of the moral transgression. 

Jeffrey Epstein appears in a photo taken for the NY Division of Criminal Justice Services’ sex offender registry (credit: REUTERS)

They published their findings in PNAS Nexus under the title “When tainted money should fund public goods: fundraising professional and public moral preferences.” 

Should universities and other institutions take “tainted” money?

The nature of the ethical transgression turned out to be the most predictive of donation acceptability; both the public and professionals broadly agreed that organizations should reject donations from criminals and accept donations from morally ambiguous individuals.

Professionals were hesitant to accept particularly large donations from morally compromised individuals, a pattern not seen in laypeople. Anonymity was not a major factor in the judgements of either of the surveyed samples. In general, respondents expected universities and museums to be more stringent in their standards than charities.

Ethicists also disagree on how to manage tainted donations. Forgoing such donations reduces opportunities for societal well-being and advancement; however, accepting them can damage institutional and individual reputations. Half of professional fundraisers have faced tainted donors, but only around a third of their institutions had relevant policies. 

The team found “interesting patterns of convergence (rejecting criminal donations), divergence (professionals’ aversion to large tainted donations), and indifference (marginal role of anonymity) across the samples. Laypeople also applied slightly higher standards to universities and museums than to charities. They said their results “provide evidence of how complex moral trade-offs are resolved differentially and can thus motivate and inform policy development for institutions dealing with controversial donors.”