Ethics

When a donation meets a jail term

Having a lifelong fascination with human behaviour and how /why people make certain decisions, I have always found ethics to be a subject matter that interests me a lot. I present on this at conferences around the globe and enjoy reading about its different theories and applications.

Recently, a colleague wrote to me with an ethics question and I found it to be a very interesting case study. Here goes …

A donor makes a gift of a paid-up life insurance policy to a charity. Years later, the donor is jailed for some funny business involving a fake charity – ouch!

The million dollar question is: should the charity keep the gift?

A few considerations to keep in mind:

  • The donor is still alive and the gift has not been realized yet (it may be years before it does)
  • Should the donor be given public recognition?
  • Is this tainted money?
  • Is this gift going to breach the trust the organization has with other donors?
  • Will this impact the charity’s standing in the community?

In this instance, it is acceptable for the charity to keep the donation. Why? Simply put, this is not tainted money because of the nature of the gift: a paid-up life insurance policy. Meaning, the gift was not the product of the donor’s illegal activities. The policy would have been purchased when he was younger and he no longer needed it therefore he gifted it to the charity. Basically, this transaction is not related to the illegal activities that landed him in jail.

To ensure that the charity does not breach the donors’ and the community’s trust, it’s best that the board passes a motion indicating that no recognition will be given for this gift. This will then have to be communicated to the donor. If this isn’t acceptable to him, he may wish to withdraw his gift – and that is fine as well.

However, let’s not forget that the board has a responsibility to the community. If they are uneasy with the gift, they may opt to decline the gift. If this is an option they are considering, they must also think about the impact the charity’s mission will miss out on by returning the donation. Will less kids have breakfast, will women have less access to family planning services, will there be less after-school activities for underprivileged kids, etc.?

These situations are never easy. That is why we call them the grey areas of ethics – I’ll write more on that in future posts. We mustn’t forget that this is an acceptable outcome for this particular community. It may not be an option in a different community or culture where the is a different “social code”. Basically, this is not written in stone and we have a responsibility to our community. If you think your community would not be happy with this outcome, then do something different.

What are your thoughts? Would you return the gift or proceed as suggested? How would your donors react in this instance? Your board members? What does your gut say?

I encourage you to write a comment below with your thoughts, questions.

If you want to read more about ethics, read anything from Marilyn Fischer, Janice How Pettey and of course, Ian MacQuillin at Rogare. He’s doing research to put the science behind the experiential approach to ethics. Super interesting stuff (nerd alert!).

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