Ethical Educator

A Dubious Donation
School Administrator, December 2017

Scenario: The education foundation in a school district is raising funds to renovate art and technology classrooms badly in need of updating in several schools. A local businessman with known connections to organized crime offers the district’s education foundation a substantial gift. Should the district’s leadership recommend the foundation board turn down the donation?

Sarah Jerome: 
One might read this scenario and immediately think it’s a simple solution. Just decline the money. Why take the risk? But after conversations with several heads of foundations and agencies dependent on donations, I believe greater complexities are evident. These are the questions that arose:

» What are the foundation guidelines/criteria for accepting donations?

» Are specific ethical standards spelled out?

» Is the donor suspected of "known connections" to organized crime or has a court found him guilty of wrong doing?  Is there proof of wrong doing or just a rumor?

» If one decides not to take the money, what does one say to the donor as a reason his money is unacceptable?

» Has the foundation ever accepted an anonymous donation?  If so, was there a background check to determine the acceptability of the donor?

» Is every donor's background checked?

» Can the police or other judicial authorities endorse the acceptance of these funds?

» Will other donors be discouraged from future donations if this donation is accepted?

» Will they view it as an unsavory entanglement or an embarrassment for the foundation?

» Will the foundation be assisting the laundering of dirty money?

In addition, foundations must establish standards and guidelines for donations and donors. The foundation board will need to wrestle with this opportunity weighing carefully the good the money could do for children who need it versus the ethical dilemma of accepting a donation that some will view as tainted.

It is a thorny issue — and one further complicated by how money is earned even if it is earned legally, but questionable ethically. No doubt, the foundation board will be in for a healthy debate on these issues.
Maggie Lopez:
The education foundation is affiliated with the school district. Its fundraising for this project connects directly to students and classrooms. It is not acceptable to take this donation from an individual that is connected in any way to organized crime. The district leadership should recommend that the foundation turn down the gift. If the foundation ignores the district’s recommendation, the district needs to reconsider the partnership and discuss expectations as these donated funds will create a problem for a continued partnership or any district affiliation with the foundation. 

We are role models for our students and need to be able to defend the decisions we make when we partner with community members. It would be difficult to accept this gift no matter how badly needed knowing the background of its donor. There is no way to justify its acceptance in all good conscience.
Shelley Berman:
Education foundations should have policies and standards for making judgments about gifts. In the private school and university world, most have adopted fundraising policies such as those modeled on the website of the National Association of Independent Schools. Its standards include this: “The school accepts only gifts that support its mission, character, integrity, and independence.” This standard would enable a foundation to reject a gift from an individual or corporation associated with crime, pornography, alcohol, tobacco, guns, gambling or other activities that may not be aligned with the character or mission of the foundation.

In this case, the foundation could and should unambiguously reject the gift if there is a clear and publicly documented connection to organized crime through a criminal record or public scandal. However, often there isn’t such clarity and the stakes may be substantial.

On the one hand, the gift may be of such significance that it could make major improvements in the district's classrooms. If the businessman's association with organized crime is only a rumor, it may not be true. Acting without a factual basis could alienate a valuable donor as well as others in the community.

On the other hand, if there is some credibility to the donor's association with organized crime, the foundation’s reputation, its status in the community and its good work could be compromised by accepting a gift from a socially unacceptable source or, worse, by having to return the funds at a later point if the individual is tainted by scandal or it is determined that the funds were obtained illegally.

“Connection” is an ambiguous term. Organized crime boss James “Whitey” Bulger’s brother was William “Billy” Bulger, the longest serving president of the Massachusetts Senate and president of the University of Massachusetts. While it would have been an easy decision to reject a donation from Whitey, it would have been much more difficult for Boston’s public education foundation to reject a gift from Billy while he was in the Senate, simply based on his family connection. Therefore, the foundation will need to do the research necessary to assess the validity and degree of connection between the individual and organized crime, as well as the legitimacy of the gift.

Public education foundations don’t have the luxury of keeping this kind of decision secret. If the foundation doesn’t currently have a policy that sets standards, now is a good time to develop one. As superintendent, I would urge the foundation to conduct thorough background research and act with caution, even to the extent of opening a conversation with the donor about the implications of his reputation for the foundation's decision and its future. The best gift he could give to the foundation may be to withdraw the offer.

Meira Levinson:

This decision should be made independent of financial need. If the educational foundation would not take the money when flush, then it should not take the money when budgets are tight because that simply means the district is willing to sell its integrity under the right conditions and for the right price. Public integrity should not be for sale.

Happily for the district, however, its leadership can recommend in good conscience that the foundation board accept the donation (assuming it has conducted appropriate due diligence and there is no indication of civil or criminal malfeasance). When school districts (and their education foundations) accept money — whether as tax dollars or donations — they do not thereby affirm the honor or good name of the donors. They accept money to educate children, not to offer indulgences.

This is lucky because many donors have morally sketchy sources of money. A quick Google search shows that school and district education foundations, early childhood centers and after-school programs currently accept donations from gun and cigarette manufacturers, companies that provide mercenaries for foreign wars and numerous corporations that have had to pay fines for fraud or other forms of misbehavior.

Frankly, it would be most ethical if we simply fully funded our schools through reasonable taxation and redistribution policies and did not rely on (or even allow) private donations to public school districts. We do not expect corporate dollars or private donations to pay to upgrade firefighters’ equipment or police tactical command centers.  Why should art and technology classrooms be different?  But as long as they are and as long as districts have education foundations that accept money from individual and corporate donors, then the local businessman with unsavory organized crime affiliations should be welcome to donate, too.

Each month, School Administrator draws on actual circumstances to raise an ethical decision-making dilemma in K-12 education. Our distinguished panelists provide their own resolutions to each dilemma. Do you have a suggestion for a dilemma to be considered? Send it to:

The Ethical Educator panel consists of Shelley Berman, superintendent, Andover, Mass.; Sarah Jerome, a retired superintendent in Arlington Heights, Ill., and an AASA past president; Meira Levinson, professor of education, Harvard University, and author of Dilemmas of Educational Ethics: Cases and Commentaries; and Maggie Lopez, interim superintendent, Eagle County, Colo.