Vetting your donor

Protect your organization’s reputation by shining a light on your funding source

A massive ripple swept across the art community this year. Famous for donating extraordinary amounts of money to museums, hospitals, and even universities, a wealthy family was poised to give millions to a set of museums in London. For the first time, that generous donation was refused.

The donating family was the Sacklers, which had earned billions by selling OxyContin through their company, Purdue Pharma.

The Whitney Museum of American Art faced a similar uprising. Dozens of artists connected to the museum demanded that board member Warren Kanders step down because his company, Safariland, produces the same teargas used against asylum seekers at the border of the United States and Mexico.

This led to multiple protests in the museum and the lobby, and a second letter signed by 120 art industry members demanding that Kandor step down.
So, what happened? Organizations are being held accountable for their benefactors.

In the case of the Sackler family, after two brutal articles blaming the family for profiting–and even contributing to–the opioid epidemic, and a slew of lawsuits alleging that the family mislead the public about the drug, leaders at these museums decided that it was morally wrong and reputationally harmful to take those donations.

But for the museums and universities and clinics with the Sackler name already on their buildings, who had subsisted on the family’s donations for years, the pain was just beginning. Activists began asking leaders at these institutions to refuse or return donations, and even take the Sackler name off their buildings.

Suddenly, these institutions were on the offensive.

At the intersection of art and activism, these organizations were being held accountable for the people who wrote the checks. And despite the high-profile nature of this scenario, this can easily happen to any funding-based business, from museum to tech company.

How can you protect your company or organization from the PR fallout of taking money from the wrong source? Much can be learned by studying your benefactor. And you can also learn a lot by researching other companies that have received donations from your benefactor.

Treating the donor like a prospective business partner or investor, organizations can conduct background research to get confidence that the money ultimately comes from the right sources.

Seek past controversies in the media
Look for controversies surrounding your benefactor. Guilt by association can soil the reputation of your funding source, and by extension, your organization.

Vet other donations
If your benefactor is a foundation, find out who else has received money. Have any of these organizations receiving donations earned negative? There are countless stories about well-meaning foundations donating to organizations or companies that harm their cause.

Examine the reputations of board members
Go through top leadership and examine the reputations of the people in charge. This should include claimed accomplishments, educational background, and current and past lawsuits. Have past board members or executives had legal disputes with current members? This is a red flag that should be given a deeper look.

Look for boycott information
Is your benefactor organization on the radar of boycotting groups? What about the organizations that received donations from your potential donors? If they are facing boycotts, find out if the two are related.

Review social media accounts
Is your benefactor on Facebook or Twitter or Instagram? Give this a closer look. Warning signs include inflammatory political or racist statements, the sharing of offensive memes, or even just your garden-variety set of questionable videos or photos. If a benefactor or foundation talks about responsibly managing their money, and the top board member is posting selfies while doing shots on a yacht, it’s possible your benefactor could face problems.

Dig into employee statements
Through social media, are employees complaining about sexual harassment in the workplace, labor law violations, or shady moves by management? It’s true that one or two employees may just have an axe to grind and what they’re writing is fiction, but if you see a pattern, you must give things a deeper look.

Some funding sources carry reputational damage that can easily harm your organization. By conducting reputational due diligence before officially entering your partnership, you’ll stand a much better chance of avoiding pitfalls that can come with accepting your funding.