When should a nonprofit refuse a gift?
It’s a strange question since nonprofits usually take any money they can find. But the following thought exercise might help clarify thinking on this issue:, a “demon donor” whose money comes from morally dubious activities diametrically opposed to the mission of a given nonprofit. A demon who—despite goals that are counter to those of the nonprofit—still thinks it would be better if the organization limped along. A demon who offers a gift provided he is honored at the gala.
The nonprofit must reject the demon’s gift because it should conceive of itself as a joint project where labor and capital work together to achieve a common objective. Involving a demon who is opposed to that objective corrupts the enterprise for all concerned. It diminishes the purpose and passion on which the nonprofit ultimately depends. If the demon can't be converted to the cause, his money should be rejected.
In the real world, few donors are truly demonic though many still support organizations whose values and objectives they don't wholeheartedly embrace or may even undermine through their actions as voters, political donors and executives. So at a time when investors are more actively working to align their investments with their values, nonprofits should strive to do the same thing by aligning their donors with their values.
Nonprofits could do this by taking on a KYD obligation to help would-be donors truly understand their mission and objectives, and to accept gifts from only those donors whose actions and beliefs suggest significant alignment. Even nonprofits that ultimately accepted some misaligned gifts would still make a positive difference by educating donors and trying to change their behavior.
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