Ethics and tainted money: Part 2

Posted on August 3, 2018 by Abby Rolland

Dr. Gene Tempel presenting about ethics for a course by The Fund Raising School.

On Wednesday, you heard from Dr. Leslie Lenkowsky, professor emeritus of public affairs and philanthropic studies, discuss the issues with John Schnatter, the former CEO and board chairman of Papa John’s Pizza. You may have made a personal decision about whether or not you would accept or return the donation. Now, learn how another ethics expert approaches decision-making about tainted money.

Dr. Gene Tempel, professor of philanthropic studies and founding dean emeritus, shared his thoughts with me about how nonprofit organizations can proactively decide how to handle situations with tainted money.

He first explained that institutions need to have gift acceptance policies and procedures in place before a tainted money issue arises.

“Tainted money situations are complicated,” Dr. Tempel said. “Organizations that are not adequately prepared for these issues when they occur are caught off-guard and unprepared to carefully decide how to handle the money.

“For example, if a donor commits a naming gift, an organization needs to have a policy in place for accepting gifts and a clause in the gift agreement that explains in detail the situations when the name might be removed.”

Dr. Tempel suggested implementing and training an ethics committee to handle these situations. “If there is an ethics committee in place, no organization will have to make a decision by just one or two people (the executive director and director of development, for example),” he said.

With that committee, the organization should then assess the situation.

“The first consideration is whether the individual who is donating or has donated the money committed an illegal act,” Dr. Tempel said. “If so, the money is automatically tainted and should be refused or returned.

“In the John Schnatter situation, he did not break the law. In this case, it’s a values conflict. His values are in opposition to the values of the institutions (e.g. University of Louisville, Purdue University, city of Jeffersonville, etc.) he donated money to. By using the word he did, he assaulted institutional integrity and the values these organizations have.”

In addition to identifying their own values and whether the donated money violates those values, Dr. Tempel advises organizations to consider the totality of the organization and the effects of accepting the money on its reputation.

“In this situation, Purdue University, for example, may have the reputation to bear the brunt of the public relations assault that could occur if they accept they money,” he said. “They may believe that since the money is being put to use for a good cause, that is the most important aspect in this case and they can and should continue to use it.”

He also suggested ways Schnatter might “make amends” with organizations that do decide to keep the money.

“He can offer to take his name off of the facility and/or donate money that can go to help groups he offended, such as scholarships for minority students, support groups, offering sensitivity trainings, etc.,” Dr. Tempel said.

While some organizations have already made a decision about Schnatter’s donations, others, such as Purdue University, have not. Whatever decision Purdue University specifically chooses, Dr. Tempel stressed that its message to its stakeholders and constituents is vital.

“If the organization doesn’t keep the money because it cannot be associated with Schnatter’s values, then it is clean and no one can fault them for following their values,” he said.

“However, if an organization does decide to keep the donation, the ethics committee and leadership need to explain to its constituents why they kept it and what good it is doing. There needs to be a carefully crafted communication plan in place, no matter what the final decision is.”

Regardless of the respective decisions made by organizations who received donations from Schnatter, Dr. Tempel believes that they will emerge stronger in the long run.

“After carefully communicating the reasoning behind their decision-making, organizations need to actively listen for feedback among their constituents,” he said. “If they receive criticism, they may need to reconsider and modify the current policies in place. As (former law professor and attorney who founded the nonprofit Joseph and Edna Josephson Institute of Ethics) Michael Josephson said, organizations need to monitor and modify policies and actions, depending on reactions and consequences of their stakeholders and constituents.

“If they’re able to do that, they’ll emerge stronger in the long run and able to provide robust reasons for the actions they undertook.”

Part 1: The ‘tainted money’ problem returns »

The ‘tainted money’ problem returns

Posted on August 1, 2018 by Les Lenkowsky

Cardinal Stadium. *Photo Credit: Card Chronicle*

Last month, the University of Louisville announced it was changing the name of its football stadium from “Papa John’s Cardinal Stadium” to simply “Cardinal Stadium.” How come? Papa John’s founder and board chairman, John Schnatter, confirmed a report in a Forbes magazine article (it’s long and contains material that may offend some) that he used a racial slur in a conference call with the company’s marketing agency. In her statement, University of Louisville president Neeli Bendapudi underscored the school’s commitment to “diversity,” “equity,” and “inclusion” as the reason for making the change.

John Schnatter is just the latest—and will undoubtedly not be the last—donor to cause an organization to wrestle with what fundraisers and students of philanthropy call the “tainted money” problem: whether to accept or keep gifts from people whose personal or business conduct was disreputable. The question first emerged in modern philanthropy over a century ago, when a Congregationalist minister in Columbus, Ohio—Washington Gladden—urged his denomination to refuse a grant from John D. Rockefeller because the oilman used unscrupulous methods to build his fortune. It took the money.

The tainted-money problem also figures in a variety of literary works, including George Bernard Shaw’s play, Major Barbara, which premiered in London the same year that Pastor Gladden delivered his sermon and centered around the dilemma of a Salvation Army officer over accepting a donation from her father, a notorious weapons manufacturer. She took the money too.

Since then, gifts large and small have prompted similar agonizing in all sorts of organizations. Last year, for example, the University of Southern California rejected a $5 million gift from Harvey Weinstein to help women filmmakers after accusations of sexual assaults were made against him. With limited success so far, protesters have also been urging art museums to shun donations from the Sackler family, long-time cultural patrons, who own the company that manufactures oxycontin, a drug implicated in the opioid crisis.

Fundraisers and other organizational leaders have sometimes taken the position that the real problem with tainted money is that “it ain’t enough.” Gifts from disreputable sources, this suggests, should be judged by what they accomplish, not the character of their donors. Such a view is not only one of convenience, but it can also claim Biblical support. As translated by J. B. Phillips, chapter 16 of the Gospel of Luke goes as follows:

“Now my advice to you is to use `money,’ tainted as it is, to make yourselves friends, so that when it comes to an end, they may welcome you into the houses of eternity. The man who is faithful in the little things will be faithful in the big things. So that if you are not fit to be trusted to deal with the wicked wealth of this world, who will trust you with true riches?”

Rather than providing justification for turning back a gift, as Pastor Gladden thought, the fact that a fortune may have been made through dubious means might be why churches and other charities should take it, for in doing so, they will not only enable society to benefit, but also help the giver show his or her true worth.

To be sure, every organization has its limits. Although a variety of rules exist to ensure that charities are not self-serving, the directors and staffs of nonprofits usually have considerable latitude to operate within them, including determining whose and what kind of support to accept. Such judgments are often more matters of prudence than principle, no different in many ways than other decisions organizations face on a variety of issues. A charity would be unwise to take contributions from supporters whose backing raised questions about what it really stood for, but exactly which supporters they are is ultimately the responsibility of those entrusted with the organization’s mission and values.

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Did the University of Louisville make the right call? And what should Purdue do with the John H. Schnatter Center for Economic Research? (The Trustees are currently trying to decide.) Let’s see what you think. Post your replies below.

If you want to know more about the controversy, view this story from USA Today, which includes a response from Mr. Schnatter.

Leslie Lenkowsky is Professor Emeritus in Public Affairs and Philanthropy at Indiana University.

‘If you want to help people, this is the best place to be’

Posted on July 30, 2018 by Abby Rolland

Originally, Kayla Plummer, B.A. ’18, did not want to attend college.

However, her parents insisted that she attend, and so Plummer decided to major in elementary education at IUPUI. “I knew that I wanted to work with and help youth in some capacity. However, I learned that elementary education was not the right path for me,” Plummer said.

It was a meeting with an advisor that changed Plummer’s path.

“She told me that all of my classes had fallen on the path of philanthropy. My first response was ‘what’s that?’ And she said, ‘voluntary action for the public good. You can help people.’ A field that at first had me questioning what it was turned out to be very impactful and important to me. It’s the direction that I was supposed to be on,” she said.

It was in her first class that Plummer saw what a major in philanthropic studies meant. “We read Understanding Philanthropy by Robert Payton and Michael Moody and I remember crying because it was everything I needed,” she explained.

And it didn’t end there. Plummer recalls many classes and professors that engaged her. “Dr. (Catherine) Herrold taught a course called Civic Engagement and how we can be engaged within our society. I really enjoyed that course. I also appreciated Dr. (Julie) Hatcher’s class on Contemporary Approaches to Philanthropy. I learned the most about philanthropy from that class, how we use it now, and how it can be used in the future,” she said.

Plummer also utilizes information from her fund development courses in her current position as development associate at the Center for Leadership Development (CLD). The CLD fosters the advancement of minority youth in Central Indiana and encourages them to become future business and community leaders.

“We provide programming from grades 4-12 and focus on character development and helping them become better people as whole before they go to college,” Plummer said. “When they get to college, they’re in a better position to thrive.”

In her role, Plummer specifically focuses on donor management, grant research and analysis, establishing community partnerships, and data entry.

While her classes contributed to her understanding of philanthropy, Plummer also credits her four (yes, four!) internships with various organizations throughout Indianapolis.

“I interned with the Indianapolis Urban League in a program internship, with Keep Indianapolis Beautiful (KIB) in a nonprofit management internship, with Midwest Academy in a fund development internship, and with the Marion County Democratic Party in a civic engagement internship,” she said.

Those experiences gave her the opportunity to see mission-driven work at the ground level: “To be a part of mission-driven work was really cool. For the first time, I was able to see what my future career would look like.”

In addition to those organizations, Plummer also started her own group, Evolve. “It really focuses on spiritual and personal development and helps us think about our purpose and passion for life,” she said.

In addition to all of that, she also worked full-time as a receptionist. As a result, graduation came as a welcome reward for all of Plummer’s hard work: “There was a time when I wondered whether the day would really come. I’m so glad I made it and graduated. It’s a big accomplishment.”

But she isn’t finished yet. “I really am passionate about youth, especially minority youth, and helping them be the best they can be,” Plummer explained.

Therefore, the young woman who did not even envision earning an undergraduate degree is making plans to earn her master’s in urban education. Her experiences at the Lilly Family School of Philanthropy helped her get to that point. “I wanted to build skills for myself and put myself in positions to grow professionally, mentally, and spiritually,” she said.

Those skills have brought Plummer success in her current career.

“Kayla has brought a real spirit of learning and inquisitiveness to our team,” said April Ervin, senior manager of development and Plummer’s supervisor. “As an alumna of the Center for Leadership Development, she has a personal understanding of the impact we are seeking to have on the young people we serve. Her personal passion for making a difference in the lives of others and the broader Indianapolis community is truly evident on a daily basis. We are grateful to have her as a valued member of our development team at CLD.”

Plummer added words of voice for future philanthropy students: “If you know that you want to help people, this is the best place for you to be. There are really great professors, other students, and staff members who have the same passion and purpose. They’ll help align you with the right places and plant seeds in your mind of what you may be interested in.

“Through my experiences here, I’ve been very blessed.”

Interested in our bachelor’s degree program and know someone who would be a good fit? Leave a comment below or learn more about our academic programs.

How does retirement affect charitable giving?

Posted on July 26, 2018 by Andrea Pactor

How does retirement affect charitable giving?

Throughout their lives, the Baby Boomer generation has had an outsized impact on society – from culture to politics and from work to leisure.

Much has been written about how the unprecedented number of Boomers turning 65 daily through 2030 is stressing Social Security and Medicare, and how Boomers are reimagining retirement. However, little has been written about the role of charitable giving at this stage of their lives.

The Women’s Philanthropy Institute (WPI)’s newest study, How Women & Men Give Around Retirement, is the first known research to examine how retirement affects charitable giving. It looks at whether gender differences in giving and volunteering occur in retirement.

Backdrop for the study

Philanthropy is a journey; people approach the giving of time, talent, and treasure differently at different points in their lives. With the volume of people approaching or in retirement, understanding how they think about charitable giving at this transition may help fundraisers engage this important population more effectively in their work. As we began the research, we knew three key points about retirement, gender, and charitable giving.

Men and women approach retirement differently. Women are generally less confident than men about their financial security during retirement. Four factors affecting women’s concerns about their financial viability that WPI reported in Women Give 2012 are: risk aversion in financial decision-making, longer life expectancy, being single as they age, and less money available in retirement.
In general, households reduce their spending in retirement, about an average of 16 percent decline in consumption.
Men and women approach charitable giving differently. They have different motivations for giving and practice their philanthropy in different ways.

The findings

Generally, both men and women maintain their charitable giving after retirement, especially compared to other types of spending. Gender differences do emerge as this infographic illustrates.

Single women and married couples are more likely to give and give more than single men around retirement.
Giving by single women and married couples is more stable than giving by single men around retirement.
Single women and married couples are more likely to volunteer, and their likelihood of volunteering is more stable, compared to single men around retirement.

Strength of the study

Retirement is an increasingly fluid period today. To better understand the impact of this moment, the study refers to giving “around retirement.” Analysis examined five years prior to and five years after retirement, reflecting that while retirement may be one point in time, household spending and giving patterns may change in the years leading up to and following retirement. Researchers checked results by using various windows of time to be sure results were consistent. The longitudinal analysis ensures that the findings are robust.

Implications for the field

Some of a nonprofit’s most loyal donors may be those approaching retirement who have supported the organization for decades. This study suggests that nonprofits should continue to engage them and steward them in meaningful ways.

Our LinkedIn post suggests seven ways for donors to be philanthropic during retirement. Nonprofits may wish to build on these ideas to provide new, creative, and enriching opportunities for donors to remain active and involved with their organization.

The gender differences illuminated in this study highlight the importance of reaching men and women donors in strategic ways. As women tend to be more loyal and consistent donors, stewarding them well throughout their lives and planting seeds for planned gifts and bequests may generate short- and long-term results.

The report also sparks discussion about how fundraisers can better generate more consistent giving from retired men. Creating new opportunities for their engagement may expand the donor base. Knowing that men more than women are influenced by tax benefits for their giving provides opportunities to engage this demographic in conversations about augmenting their charitable giving through donor-advised funds and the IRA minimum distribution requirement.

Baby Boomers will continue to influence all aspects of retirement for the foreseeable future. Women are more likely than men to want to use their wealth for the common good or a greater purpose; as younger women close the gender gap in financial literacy, they may accelerate women’s philanthropy in untold ways. At the same time, when nonprofits and fundraisers find creative ways to engage more men around charitable giving in and around retirement, we may experience a powerful boost in giving by all.

Want to learn more? Next Avenue, an online site developed by PBS for the 50+ community, offered their perspective on the report.

Andrea Pactor is the associate director of the Women’s Philanthropy Institute.

‘Find your passion, work hard, and set high goals’: How a master’s alum is making her passion her profession

Posted on July 24, 2018 by Abby Rolland

An East Coast native, Melynne Klaus, M.A./M.P.A. ’03, attended Franklin & Marshall College (F&M) and earned a bachelor’s degree in Business Administration and Art History. During her time there, Klaus interned in the development office at F&M. She enjoyed working in fundraising, and after graduating, continued to work in the office with corporate and foundation partners. Then, a summer opportunity in Indiana changed not only her location, but her life as well.

“I had the opportunity to attend a summer program called the Summer Institute on Philanthropy and Voluntary Service for American Studies, directed by Dr. Leslie Lenkowsky,” Klaus said. “While attending, I became interested in graduate school. I knew I wanted a profession in the philanthropic sector, so I looked into various programs focused on it. I made the decision that IUPUI was the best for me because of its emphasis on the liberal arts and its diverse ways of approaching problems.

“I applied to the dual degree of a master’s of arts in philanthropic studies and a master’s of public affairs with a concentration in nonprofit management. I was accepted, and then had the wonderful opportunity to accept a graduate assistantship with Dr. Lenkowsky.”

Before starting classes the next fall, she assisted Dr. Lenkowsky with the Summer Institute, helping manage student placements at nonprofits throughout Indianapolis. The role gave her the chance to learn about Indianapolis nonprofits and their various missions.

When classes started and Klaus had some flexibility in her schedule, she began volunteering with Christel House International, an organization started by Christel DeHaan that focuses on education for the most impoverished children in Indianapolis and around the world.

“I worked first as a volunteer, then as an unpaid intern, then as a paid intern for them,” Klaus said. “For my second year of school, they hired me as a graduate assistant and development associate.”

While Klaus could have worked in multiple organizations, she decided to stay with Christel House International throughout her time at the then-Center on Philanthropy: “It was a really good fit mission-wise for me, and gave me many great opportunities to learn and develop my skill set.”

As she began contemplating and preparing for graduation, Klaus searched for opportunities within Indianapolis. She applied for and accepted a position working with the Women’s Fund of Central Indiana, a major fund that is part of the Central Indiana Community Foundation (CICF).

“The role focused on fundraising and the campaign to increase the endowment of the Women’s Fund,” she said. “I was and still am particularly interested in family philanthropy and that dynamic of giving, especially how families use philanthropy both as a tool to make the world a better place and as a way to talk about values and generosity within the family.”

After several years at CICF, Klaus received a chance she could not pass up – the opportunity to work with the DeHaan family as the executive director of the Christel DeHaan Family Foundation.

Klaus has been with the Christel DeHaan Family Foundation ever since. She works intimately with the DeHaan family to pursue their goals for the foundation.

“They set the parameters of how to support the community and I work to help them achieve their goals,” she said. “A large part of my role is communicating the mission of the foundation and its focus on the arts and if that matches with various nonprofits’ missions.”

Through its grants, the foundation seeks to predominately provide unrestricted general operating support to professional arts organizations.

“We want to encourage and support good practice behind-the-scenes and in the public-facing programs,” Klaus explained.

Overall, Klaus and the foundation focus on being a good partner, seeking to ask good questions and understand the organization’s perspective, as well as their limitations and opportunities.

“We bring an important outside perspective, but you have to understand an organization’s perspective and what and where they need assistance as well,” she said.

To this day, Klaus still uses lessons learned in class in her work. She has learned that it’s important to take a deep and broad look at issues as well as understand the history along with current events to understand the state of the sector.

“Both the understanding of a deep, narrow topic and a holistic, broad, and global perspective is important,” she said. “I analyze those narrow and broad environments in my daily role at the foundation.”

Lessons from the school not only inform her thinking, but have encouraged Klaus to give back to the school.

“I think as an alumna, it’s a responsibility to help when I can and to have engagement with students that will help them in their career paths,” she said.

As part of that role, Klaus and the Christel DeHaan Family Foundation host and support a graduate internship every year. Klaus works to show the intern the full scope of the foundation’s activities.

“I try to include them as much as possible in all aspects of the foundation’s work. I also welcome their involvement in asking questions and sharing diverse viewpoints,” she said. “Overall, I want to understand the student’s goals for his or her position in order to match him or her with what he or she is most interested in.”

Melynne Klaus stands with Dean Amir Pasic at a Board of Visitors meeting

In addition to her role as a mentor to current students, Klaus also volunteered for years on the school’s alumni board and Board of Visitors, completing a term as the chair of the Board of Visitors as well during the hiring process of Eugene R. Tempel Dean Amir Pasic.

“To know and understand all that was happening and be impressed by the cumulative impact of all the Lilly Family School of Philanthropy does was a great opportunity,” she said. “To see, to hear, to understand, and to learn, especially of and from the students and their work, was a wonderful experience.”

And for current students, Klaus has advice that she’s taken to heart through her years of learning and experience: “Ask good questions. Find your passion. Work hard, and set high goals. Finding your passion and the problems you want to solve will sustain you through the non-glamorous times. Approaching each task with the knowledge that it’s important and contributes to the overall mission is important.

“Finally, get involved, stay involved, and help future students as they start their careers.”